Section 97: Definition

Motor Vehicles Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1988

Legal Commentary & Landmark Judgments: Section 97

Section 97 of the Motor Vehicles Act, 1988 defines 'State Transport Undertaking' (STU) for the purposes of Chapter VI, encompassing road transport undertakings operated by the Central or State Government, State Road Transport Corporations, or local municipal authorities.

  • Statutory Composition of STU: Defines an STU as any undertaking providing road transport services run by: (a) the Central Government or a State Government; (b) any Road Transport Corporation established under Section 3 of the Road Transport Corporations Act, 1950; (c) any municipality or local authority; or (d) any company in which the Central/State Government holds not less than 50% paid-up equity.
  • Operational Scope under Chapter VI: Qualifying as an STU is an indispensable condition precedent to invoking the monopolistic route nationalisation mechanisms provided under Chapter VI.
  • Distinct Legal Personality and Public Duty: While an STU functions as an instrument of the State, it operates in the commercial transport domain subject to statutory fiduciary duties to provide efficient, adequate, economical, and properly coordinated road transport services.
Key Landmark Precedents:
  • Rajasthan State Road Transport Corporation v. Noor Mohamed (1998) 6 SCC 344: The Supreme Court held that a State Road Transport Corporation established under the RTC Act, 1950 is an STU within the meaning of Section 97, possessing exclusive locus to formulate and execute nationalisation schemes under Chapter VI.
  • D.R. Venkatachalam v. Transport Commissioner (1977) 2 SCC 273: The Supreme Court affirmed the distinct statutory personality of STUs as public welfare commercial entities designed to provide integrated transport infrastructure.
Courtroom Practice & Strategic Litigation Guidance:

When drafting pleadings challenging a draft or approved route nationalization scheme, first verify whether the proponent entity strictly satisfies the 50% government shareholding or municipal constitution required under Section 97. If a joint venture entity has diluted government equity below 50%, challenge its statutory locus under Section 97 to formulate Chapter VI schemes.