Section 6 of The Road Transport Corporations Act, 1950
Disqualifications for being chosen as, or for being, a Director of a Corporation.
6. Disqualifications for being chosen as, or for being, a 1[Director of a Corporation].--2[(1)] A person shall be disqualified for being chosen as, or for being, a 1[Director of a Corporation[--
- (a)if he is found to be a lunatic or a person of unsound mind; or
- (b)if he has been adjudged insolvent; or
- (c)if he has been convicted of an offence involving moral turpitude; or
- (d)if he has, directly or indirectly, any interest in any subsisting contract made with, or in any work being done for, the Corporation except as a shareholder (other than a director) in an incorporated company, provided that where he is a shareholder he shall disclose to the State Government the nature and extent of shares held by him in such company; or
- (e)if he has any financial interest in any other road transport undertaking. 3[(2) Nothing in clause (d) of sub-section (1) shall be deemed to disqualify the 4[Managing Director] of a Corporation for being chosen as, or for being, a 5[Director] thereof.] 6[(3) Nothing in clause (e) of sub-section (1) shall be deemed to disqualify,--
- (a)any officer or other employee of the Government for being chosen as, or for being, a Director of a Corporation;
- (b)any officer or other employee of a Corporation for being chosen as, or for being, a Director of another Corporation.]
Summary
- This provision lists the specific reasons why a person cannot be chosen as or remain a Director of a transport corporation.
- A person is barred from being a Director if they are found to be a lunatic or have an unsound mind.
- People who have been declared insolvent, which means they are legally unable to pay their debts, are disqualified.
- Individuals convicted of crimes involving moral turpitude, which refers to wicked or dishonest behavior, cannot hold this office.
- Having a financial stake in a contract with the corporation or a separate road transport business generally stops someone from being a Director.
- There are exceptions for Managing Directors and government employees who may have roles in other corporations.
Practical examples
FAQ
1. What are the main disqualifications under Section 6 of the Road Transport Corporations Act, 1950?
Under Section 6 of the Road Transport Corporations Act, 1950, people are disqualified if they are of unsound mind, insolvent, convicted of certain crimes, or have conflicting financial interests in transport contracts or other transport businesses.
2. Can a Managing Director be disqualified for having an interest in a corporation contract under Section 6 of the Road Transport Corporations Act, 1950?
No, Section 6 of the Road Transport Corporations Act, 1950, specifically states that the Managing Director is not disqualified just because they are involved in a contract or work being done for the corporation.
3. Does having shares in a company that works with the corporation disqualify a person under Section 6 of the Road Transport Corporations Act, 1950?
Not necessarily, as Section 6 of the Road Transport Corporations Act, 1950, allows a shareholder to be a Director if they are not also a director of that other company and if they tell the State Government about their shares.
Test yourself
1.Under Section 6 of the Road Transport Corporations Act, 1950, which condition automatically disqualifies a person from being a Director?
2.How does Section 6 of the Road Transport Corporations Act, 1950, handle a Director who has an interest in a corporation contract?
3.According to Section 6 of the Road Transport Corporations Act, 1950, can a government officer be a Director of a corporation if they have a financial interest in another road transport undertaking?
4.If a person is disqualified under Section 6 of the Road Transport Corporations Act, 1950, what action is the State Government permitted to take under Section 8?