Section 67 Motor Vehicles Act: Power to State Government to control road transport

Section 67 of Motor Vehicles Act: Motor Vehicle Regulation & Claims Procedure

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

[(1) A State Government, having regard to -

(a) the advantages offered to the public, trade and industry by the development of motor transport; (b) the desirability of co-ordinating road and rail transport; (c) the desirability of preventing the deterioration of the road system, and (d) promoting effective competition among the transport service providers, may, from time to time, by notification in the Official Gazette issue directions both to the State Transport Authority and Regional Transport Authority regarding the passengers' convenience, economically competitive fares, prevention of overcrowding and road safety.] [* * *]

(2) Any direction under sub-section (1) regarding the fixing of fares and freights for stage carriages, contract carriages and goods carriages may provide that such fares or freights shall be inclusive of the tax payable by the passengers or the consignors of the goods, as the case may be, to the operators of the stage carriages, contract carriages or goods carriages under any law for the time being in force relating to tax on passengers and goods. [Provided that the State Government may subject to such conditions as it may deem fit, and with a view to achieving the objectives specified in clause (d) of sub-section (1), relax all or any of the provisions made under this Chapter.] [(3) Notwithstanding anything contained in this Act, the State Government may, by notification in the Official Gazette, modify any permit issued under this Act or make schemes for the transportation of goods and passengers and issue licences under such scheme for the promotion of development and efficiency in transportation -

(a) last mile connectivity;

(b) rural transport;

(d) improving urban transport;

(e) safety of road users;

(f) better utilisation of transportation assets;

(g) the enhancement of economic vitality of the area, through competitiveness, productivity and efficiency;

(h) the increase in the accessibility and mobility of people;

(i) the protection and enhancement of the environment;

(j) the promotion of energy conservation;

(k) improvement of the quality of life;

(l) enhance integration and connectivity of the transportation system, across and between modes of transport; and

(m) such other matters as the Central Government may deem fit.

(4) The scheme framed under sub-section (3), shall specify the fees to be charged, form of application and grant of a licence including the renewal, suspension, cancellation or modification of such licence.]

Legal Commentary & Landmark Judgments: Section 67

Section 67 of the Motor Vehicles Act, 1988 empowers the State Government to issue policy directions to the State Transport Authority and Regional Transport Authorities to regulate road transport, coordinate rail-road carriage, fix maximum and minimum passenger fares and freight charges, and implement environmental and mass-transit policies.

Statutory Scope of Policy Directions: Under Section 67(1), the State Government may issue binding general directions to the STA and RTAs regarding the fixation of maximum and minimum fares and freights for stage carriages, contract carriages, and goods carriages, long-distance coordination, and road safety.
Legislative Modernisation (2019 Amendment): Extensively amended by Act 32 of 2019 to empower the State to implement National Transport Policy directives, coordinate multi-modal transport integration, promote rural transport accessibility, and enforce urban pollution and traffic congestion mitigation measures.
Prohibition of Quasi-Judicial Interference: Policy directions under Section 67 must remain strictly confined to macro-regulatory and economic guidelines; the State Government is statutorily prohibited from directing Transport Authorities to grant, refuse, or cancel specific individual permits, preserving their quasi-judicial independence.

Key Landmark Precedents:

B.A. Linga Reddy v. Karnataka State Transport Authority (2015) 4 SCC 515: The Supreme Court held that while the State Government can issue general policy directions under Section 67, such directions cannot override express statutory provisions of the Act or compel Transport Authorities to violate approved Chapter VI nationalisation schemes.
B. Rajagopala Naidu v. State Transport Appellate Tribunal AIR 1964 SC 1573: A Constitution Bench of the Supreme Court held that administrative directions issued by the State Government under Section 67 cannot control, dictate, or fetter the quasi-judicial discretion of Regional Transport Authorities when adjudicating individual permit applications.

Courtroom Practice & Strategic Litigation Guidance:

When contesting arbitrary passenger fare revisions or freight caps, examine whether the State notification complies with Section 67's statutory consultation and publication parameters. If an RTA rejects a private operator's permit application citing an unpublished executive circular or ministerial directive, challenge the rejection under Article 226 relying on B. Rajagopala Naidu to establish unlawful fettering of quasi-judicial discretion.

Section 67: Power to State Government to control road transport

Section 67 of Motor Vehicles Act: Motor Vehicle Regulation & Claims Procedure

Legal Commentary & Landmark Judgments: Section 67