22. General principle of Corporation’s finance.—It shall be the general principle of a Corporation
that in carrying on its undertaking it shall act on business principles.
23. Capital of the Corporation.—2
[(1) The State Government may provide to a Corporation
established by that Government any capital that may be required by the Corporation for the purpose of
carrying on its undertaking or for purposes connected therewith on such terms and conditions, not
inconsistent with the provisions of this Act, as that Government may determine.]
3
[(2) The Corporation may, whether or not any capital is provided to it under sub-section (1), raise by
the issue of shares such capital (hereafter in this section referred to as the “authorised share capital”) as
may be authorised in this behalf by the State Government:
Provided that where any capital is provided to the Corporation under sub-section (1), no capital may
be raised under this sub-section without the previous approval of the Central Government.
(2A) Any capital raised under sub-section (2) with the previous approval of the Central Government
may be,—
(a) in addition to the capital provided to the Corporation under sub-section (1);
(b) subscribed to by the Central Government or the State Government, as the case may be, by
converting the whole or any part of the capital provided [whether before or after the commencement
of the Road Transport Corporations (Amendment) Act, 1982 (63 of 1982)] to the Corporation by that
Government under sub-section (1).]
(3) The 4
[authorised share capital] of the Corporation shall be divided into such number of shares as
the State Government may determine; and the number of shares which shall be subscribed by the State
Government 5*** and other parties (including persons whose undertakings have been acquired by the
Corporation) shall also be determined by the State Government 5***.
(4) The allotment of shares to other parties mentioned in sub-section (3) shall be made by the
Corporation in such manner as may be prescribed.
(5) The shares of the Corporation shall not be transferable except in accordance with the rules made
under this Act.
(6) The Corporation may at any time, with the previous approval of the State Government, redeem the
shares issued to the other parties under sub-section (4) in such manner as may be prescribed.
24. Additional capital of the Corporation.—If, after the issue of shares under section 23 a
Corporation requires any further capital, the Corporation may, with the previous sanction of the State
Government, raise such additional capital by the issue of new shares and the provisions of sub-sections
(2),
6
[(2A)], (3), (4), (5) and (6) of the said section shall apply to the issue of such shares.
25. Guarantee by the State Government.—The shares of a Corporation shall be guaranteed by the
State Government as to the payment of the principal and the payment of the annual dividend at such
minimum rate as may be fixed by the State Government by notification published in the Official Gazette
at the time of issuing the shares.
1. Subs. by Act 71 of 1971, s. 7(a) and the First Schedule, for “the Central Government in consultation with the State
Government” (w.e.f. 13-11-1971).
2. Subs. by s. 7 (a) and the First Schedule, ibid., for sub-section (1) (w.e.f. 13-11
3. Subs. by Act 63 of 1982, s. 12, for sub-section (2) (w.e.f. 13-11-1982).
4. Subs. by s. 12, ibid., for “authorised capital” (w.e.f. 13-11-1982).
5. Omitted by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-9-1971).
6. Ins. by Act 63 of 1982, s. 16 and the Schedule (w.e.f. 13-11-1982).
13
1
[26. Borrowing powers.—A Corporation may, with the previous approval of the State Government,
borrow money for the purpose of raising its working capital or meeting any expenditure of a capital
nature in the open market or from a corresponding new bank constituted under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), a State Finance
Corporation, established under section 3 of the State Financial Corporations Act, 1951 (63 of 1951), the
Industrial Finance Corporation of India, established under section 3 of the Industrial Finance Corporation
Act, 1948 (15 of 1948), the Industrial Development Bank of India, established under section 3 of the
Industrial Development Bank of India Act, 1964 (18 of 1964), the Life Insurance Corporation of India,
established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956), or any other
financial institution providing credit which is subject to the control of the Reserve Bank of India.]
27. Fund of the Corporation.—(1) Every Corporation shall have its own fund and all receipts of the
Corporation shall be carried thereto and all payments by the Corporation shall be made therefrom.
(2) Except as otherwise directed by the State Government, all moneys belonging to that fund shall be
deposited in the Reserve Bank of India or with the agents of the Reserve Bank of India,
2
[or with the
corresponding new banks constituted under section 3 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 (5 of 1970), or section 3 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980 (40 of 1980)] or invested in such securities as may be approved by
the State Government.
28. Payment of interest and dividend.—(1) Where 3
[the whole or part of the capital of a
Corporation] is provided by the Central Government and the State Government under sub-section (1) of
section 23, the Corporation shall pay interest on such capital at such rate as may, from time to time, be
fixed by the State Government 4*** and such interest shall be deemed to be a part of the expenditure of
the Corporation.
(2) Where the Corporation 5
[raises the whole or any part of its capital] by issue of shares, it shall pay
dividend on such shares at such rate as may, from time to time, be fixed by the Corporation, subject to
any general limitations which may have been imposed by the State Government 4***, and such dividend
shall be deemed to be a part of the expenditure of the Corporation.
29. Provision for depreciation and reserve and other funds.—(1) A Corporation shall make such
provisions for depreciation and for reserve and other funds as the State Government may, from time to
time, direct.
(2) The management of the said funds, the sums to be carried from time to time to the credit thereof
and the application of the moneys comprised therein shall be determined by the Corporation:
Provided that no fund shall be utilised for any purpose other than that for which it was created
without the previous approval of the State Government.
30. Disposal of net profits.—After making provision for payment of interest and dividend under
section 28 and for depreciation, reserve and other funds under section 29, a Corporation may utilise such
percentage of its net annual profits as may be specified in this behalf by the State Government for the
provision of amenities to the passengers using the road transport services, welfare of labour employed by
the Corporation and for such other purposes as may be prescribed with the previous approval of the
Central Government, 6
[and out of the balance such amount as may, with the previous approval of the
State Government 4***, be specified in this behalf by the Corporation, may be utilised for financing the
expansion programmes of the Corporation and the remainder, if any, shall be made over to the State
Government for the purpose of road development].
1. Subs. by Act 63 of 1982, s. 13, for section 26 (we.f. 13-11-1982).
2. Ins. by s. 14, ibid. (w.e.f. 13-11-1982).
3. Subs. by s. 16 and the Schedule, ibid., for “the capital of a Corporation” (w.e.f. 13-11-1982).
4. Omitted by Act 71 of 1971, s. 7(a) and the First Schedule (w.e.f. 3-9-1971).
5. Subs. by Act 63 of 1982, s. 16 and the Schedule, for “raises its capital” (w.e.f. 13-11-1982).
6. Subs. by Act 28 of 1959, s. 6, for “and the balance shall be made over to the State Government for the purpose of road
development” (w.e.f. 1-9-1959).
14
31. Power of the Corporation to spend.—A Corporation shall have power to spend such sums as it
thinks fit on objects authorised under this Act and such sums shall be treated as expenditure payable out
of the fund of the Corporation.
32. Budget.—(1) Every Corporation shall, by such date in each year as may be prescribed, prepare
and submit to the State Government for approval a budget for next financial year showing the estimated
receipts and expenditure during that financial year in such form as may be prescribed.
(2) Subject to the provisions of sub-sections (3) and (4), no sum shall be expended by or on behalf of
a Corporation unless the expenditure of the same is covered by a current budget grant approved by the
State Government.
(3)
1
[Subject to such conditions and restrictions as may be specified in this behalf by the State
Government, a Corporation may sanction] any re-appropriation within the grant from one head of the
expenditure to another or from a provision made for one scheme to that in respect of another, subject to
the condition that the aggregate budget grant is not exceeded.
(4) A Corporation may, within such limits and subject to such conditions as may be prescribed, incur
expenditure in excess of the limit provided in the budget approved by the State Government under any
head of expenditure or in connection with any particular scheme.
2
[33. Accounts and audit.—(1) The Corporation shall maintain proper accounts and other records
and prepare an annual statement of accounts including the profit and loss account and the balance sheet in
such form as may be prescribed by the State Government in consultation with the Comptroller and
Auditor-General of India.
(2) The accounts of a Corporation shall be audited annually by the Comptroller and Auditor-General
of India or his nominee and any expenditure incurred by him in connection with such audit shall be
payable by the Corporation to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor-General of India and any person appointed by him in connection
with the audit of the accounts of a Corporation shall have the same rights, privileges and authority in
connection with such audit as the Comptroller and Auditor-General of India has in connection with the
audit of the Government accounts, and, in particular, shall have the right to demand the production of
books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of
the Corporation.
(4) The accounts of the Corporation as certified by the Comptroller and Auditor-General of India or
any person appointed by him in this behalf together with the audit report thereon shall be forwarded
annually to the State Government; and that Government shall cause the same to be laid before 3
[each
House of Parliament].]