Transportation in India - The Law and its Application


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By Aditya Kini, Zehn Legal

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Transportation in India - The Law and its Application

  1. 1. A product of WRI Ross Center for Sustainable Cities in association with Zehn ADITYA KINI, ZEHN TRANSPORTATION IN INDIA The Law and its Application
  2. 2. A product of WRI Ross Center for Sustainable Cities in association with Zehn THE LEGAL FRAMEWORK Laws applicable to Motor Vehicles in India
  3. 3. FLOW OF LEGAL AUTHORITY State Rules Motor Vehicles Act, 1988, while a central legislation permits state governments to make rules in relation to the grant of permits and registrations to vehicles** However, these must be in consonance with the broad framework created by the Act. Motor Vehicles Act, 1988 r/w. Allied Rules Enacted by Parliament (Union) in accordance with Entry 35 Sch. VII Consolidates law on motor vehicles Governs motor vehicles and motor vehicle related businesses in India Constitution of India Who can Legislate: Power to Make Laws under Art. 245 and Art. 246 r/w. Sch. VII. 3 Lists under Schedule VII – Union (List - I), State (List - II) and Concurrent (List - III). Motor Vehicles and other mechanically propelled vehicles fall under Entry 35 of List – III. This means both Centre and State have power to legislate on matters relating to motor vehicles. **Sections 65 and 96 of the Act
  4. 4. MOTOR VEHICLES ACT, 1988 •  Transportation in India is primarily governed by the Motor Vehicles Act, 1988, the Central Motor Vehicles Rules, 1989 and various state rules. •  The Act creates two levels of regulation at the Central and State Levels. •  The Central Government governs the kinds of registrations and permits that may be granted in relation to the intended use of the vehicle. •  The State Government governs the grant of permits to vehicles under the framework of registrations/permits created by the Central Government and also creates licenses for operation of such permits. •  Exception – Rent a Motor Cab/Rent a Motorcycle Schemes – License created by center and granted by state.
  5. 5. ROLE OF THE CENTRAL GOVERNMENT Central Government Creation of Framework for Regulation of Motor Vehicles Creation of Categories of Registrations and Permits for Vehicles Usage of Motor Vehicles for International Travel Framework for Insurance Requirements for Motor Vehicles Creation of Tribunals to address to claims under the Act Definition and Structuring of Offences under the Act
  6. 6. ROLE OF THE STATE GOVERNMENT State Government Implementation and Enforcement of Laws Created by Central Government Control of Road Transport within the State Grant of Registrations and Permits created by the Central Government Creation and Implementation of License and Permit Conditions, including fares Creation of Framework for Licenses to be granted to Transport Businesses Taxation of Motor Vehicles
  7. 7. A product of WRI Ross Center for Sustainable Cities in association with Zehn KEY CONCEPTS UNDER THE MOTOR VEHICLES ACT, 1988
  8. 8. KEY CONCEPTS UNDER THE ACT •  It is important to fully understand the scope and applicability of the Act to determine the best way forward for businesses (tech or non – tech oriented) that aim to provide or facilitate transportation services. •  The Act clearly lays out definitions for kinds of vehicles and their intended uses along with specific forms of registrations/permits to be granted to vehicles, which in turn, are used for licensing purposes by states. •  Important to remember that licensing of operators changes state to state under relevant schemes as it is the generally the role of the state to determine the licensing of operators. •  The Act also lays down specific requirements to be fulfilled under each registration/ permit.
  9. 9. TRANSPORT AND NON - TRANSPORT VEHICLES Section 2(47) of the Act Transport Vehicles • Transport Vehicle includes a Public Service Vehicle, a goods carriage vehicle, a private service vehicle or educational institution bus. • A transport vehicle is a vehicle used for carriage of passengers and goods. Non – Transport Vehicles • Non – Transport on the other hand relates specifically to personal use. • A Non – Transport Vehicle may not be used as a Transport Vehicle, i.e., for a commercial purposes. Vehicles under the Act are broadly classified into “Transport” and “Non - Transport” vehicles.
  10. 10. UNDERSTANDING THE DIFFERENCE •  X recently purchased a new car that he uses every day to drive himself to and from his office. The car is registered as a “white board” vehicle meant for private use. Can X pick up and drop off a passenger travelling in the same direction every day and charge him a fee to cover his fuel costs?
  11. 11. PUBLIC AND PRIVATE SERVICE VEHICLES Sections 2(33) and 2(35) of the Act “Hire or reward” refers to any form of consideration paid by the passenger for his carriage. Public Service Vehicle •  A Public Service Vehicle is a Motor Vehicle adapted for the use of carriage of passengers. •  Public Service Vehicles are generally engaged for Hire/Reward. •  Includes maxi cab, motor cab, contract carriage and stage carriage. Private Service Vehicle •  A Private Service Vehicle is a motor vehicle adapted for carriage of more than 6 passengers utilized by/ on behalf of the owner for carriage of persons for or in connection with his trade. •  A Private Service Vehicle cannot be engaged for hire/reward and cannot be engaged for public purposes.
  12. 12. UNDERSTANDING THE DIFFERENCE •  Mr. A operates a factory on the outskirts of Bengaluru. To help workers with their daily commute to the factory, Mr. A purchases a 12 – seater vehicle to pick up and drop off his workers every day. The vehicle is registered as a transport vehicle. On the weekends to earn some extra money on the side, Mr. A uses this vehicle to pick up and drop off passengers unrelated to his factory. Is this legally permissible?
  13. 13. MOTOR AND MAXI CABS Sections 2(22) and 2(25) of the Act Motor Cab •  A Motor Cab is a Motor Vehicle constructed/ adapted to carry not more than 6 passengers excluding driver. •  Motor Cab is generally engaged for hire or reward. Maxi Cab •  A Maxi Cab is a motor vehicle constructed/ adapted to carry between 6 – 12 passengers. •  A Maxi Cab is also generally engaged for hire or reward.
  14. 14. PERMITS AND LICENSES Section 2(31) of the Act Permits • A Permit is granted by a state or regional transport authority permitting use of a vehicle as a transport vehicle. • Granted based on the INTENDED USE of a motor vehicle Licenses • A Operator’s License is not the same as a Permit. Licenses are granted to an operator to CONDUCT A BUSINESS OR OPERATE A VEHICLE • Operators must still obtain permits for vehicles to be used commercially otherwise it is illegal for them to do so.
  15. 15. CONTRACT CARRIAGE Section 2(7) of the Act Contract Carriage refers to a motor vehicle that carries a passenger/s for hire or reward. Includes a motor cab and maxi cab It is a vehicle engaged under a contract by passenger for a fixed or agreed rate. Rate may be time based or point to point. Cannot stop to pick up/set down passengers during a journey.
  16. 16. STAGE CARRIAGE Section 2(40) of the Act Stage Carriage refers to a motor vehicle that carries more than 6 passengers for hire or reward. Separate Fares Charged to each passenger. Fare paid either for whole journey or stages. Can stop to pick up/set down passengers during a journey.
  17. 17. GOODS CARRIAGE Section 2(14) of the Act Goods Carriage refers to a motor vehicle that is adapted/ constructed to carry goods. Includes vehicles that are utilised for carriage of goods even if not constructed/adapted for that purpose Goods refer to livestock or anything carried by a vehicle other than living persons. Does not include personal effects, luggage.
  18. 18. UNDERSTANDING THE DIFFERENCE •  Z owns a Swift Dzire. The vehicle has been granted a permit to operate as a contract carriage within the limits of BBMP. Z also possesses a commercial badge on his driving license. Z picks up a passenger ‘A’ near MS Ramaiah Hospital to be dropped off at Lavelle Road, Bangalore for a charge of INR 100. On the way, Z picks up passenger ‘B’ in Sadashivnagar to be dropped off at Chinnaswamy Stadium for a charge of INR 80. At Chinnaswamy Stadium, Z picks up ‘C’ to be dropped off at Bowring Club for a charge of INR 30. Is it permissible for Z to do this so long as he maintains his contract carriage permit? •  Z also utilises the vehicle to do food and grocery deliveries once in a while. Is this legally permissible?
  19. 19. TOURIST VEHICLES Section 2(43) of the Act A Tourist Vehicle is a form of Contract Carriage. Generally used for ferrying of tourists to, from and between tourist locations and promotion of tourism within a state/country. General objections towards using tourist vehicles as general taxis.
  20. 20. A product of WRI Ross Center for Sustainable Cities in association with Zehn MOTOR CYCLES AS CONTRACT CARRIAGES
  21. 21. MOTOR CYCLES UNDER THE ACT •  A Motor Cycle is defined under the Act to mean a two – wheeled Motor Vehicle. •  Since Motor Cycles are included within the ambit of a Motor Vehicle, they may be classified as a Motor Cab if the intended use is commercial. •  Motor Cycles would hence qualify for grant of individual contract carriage permits. •  However, most State Governments are either reluctant or have out-right refused to grant individual contract carriage permits to Motor Cycles citing safety, security, enforcement and insurance related concerns.
  22. 22. RENT A MOTOR CYCLE SCHEME •  The Rent a Motor Cycle Scheme, 1997 was issued by the Central Government in exercise of its powers under Section 75 of the Act. •  The Rent a Motor Cycle Scheme grants licenses to operators and further provides for the grant of contract carriage permits to motor cycles operating under a Rent a Motor Cycle License. •  These, however, cannot be utilised as bike taxis for point to point pick ups and drop offs. They are meant for an individual’s own use and must either by driven by the individual or a driver appointed by him. Section 75 of the Act gives the Central Government the power to formulate a scheme for renting of motor cabs and motor cycles by individuals for their own use.
  23. 23. INDIVIDUAL CONTRACT CARRIAGE PERMITS •  As stated before, there are very few states that allow for the grant of individual contract carriage permits to motor cycles. •  As of now, only Haryana has issued an order for the grant of individual contract carriage permits to motor cycles. •  Gujarat, West Bengal and Rajasthan are currently considering granting individual contract carriage permits to motor cycles. •  Other states have refused to grant individual contract carriage permits.
  24. 24. A product of WRI Ross Center for Sustainable Cities in association with Zehn INSURANCE REQUIREMENTS FOR MOTOR VEHICLES
  25. 25. INSURANCE UNDER THE ACT •  The Act requires that any motor vehicle being used in a public place in India be covered by an Insurance Policy in accordance with the Act. •  The requirements specified under the Act are only the minimum requirements. •  Insurers generally distinguish between insurance coverage for private vehicles and commercial vehicles. •  Commercial Vehicles are required to obtain more comprehensive insurance coverage than private vehicles. Chapter XI of the Act.
  26. 26. GENERAL REQUIREMENTS FOR MOTOR VEHICLE INSURANCE •  Motor Vehicles are required to obtain insurance coverage at minimum for liability for death, bodily harm, harm to goods, injury to third parties, damage to property of a third party. •  However, the Act requires Commercial Vehicles to also obtain coverage for death or bodily injuries to passengers in addition to the above. •  Insurance coverage for commercial vehicles may also include insurance coverage for workman’s compensation.
  27. 27. A product of WRI Ross Center for Sustainable Cities in association with Zehn PEER TO PEER RIDESHARING
  28. 28. WHAT IS PEER TO PEER RIDESHARING? •  The concept of sharing a vehicle permitted solely for private use for a trip by splitting travel costs such as fuel and toll is known as ridesharing. •  Passengers are generally picked up and dropped off on the way depending on routes and schedules. •  In essence, is the commercial utilisation of a transportation asset, whether commercially licensed or otherwise.
  29. 29. IS PEER TO PEER RIDESHARING LEGAL IN INDIA? •  Under existing laws, Peer to Peer Ridesharing is unregulated and hence deemed illegal in India. •  Transport authorities generally view it as a violation of the permit granted to a vehicle since it is a private vehicle being utilised for commercial purposes without having obtained requisite permissions from the transport authorities. •  Other than a violation of permits, State Governments as well as the Central Government are reluctant to provide legitimacy to the idea since it poses an enforcement issue. •  Another concern is a drastic alteration to insurance requirements. Since private vehicles do not possess the same insurance coverage that a commercial vehicle does, harm to passengers is a major concern.
  30. 30. USING CONTRACT CARRIAGES FOR RIDESHARING •  While it would make sense that a commercially licensed contract carriage vehicle be permitted to conduct ridesharing, transport authorities are unwilling to permit the same. •  This stems mostly from the fact that this would be a violation of a contract carriage permit. •  The contract carriage permit does not allow a contract carriage to pick up and drop off passengers along the way. Contract carriages cannot engage several different contracts at the same time. •  This would, in the eyes of transport authorities, mean that contract carriages are acting as stage carriages – hence being a violation of the permit granted to it.
  31. 31. COULD THE REGULATORY ENVIRONMENT CHANGE? •  Governments are slowly waking up to environmental, congestion and traffic concerns plaguing cities in India. •  Now, if ever, is the best time to push for Governments to seriously consider allowing peer to peer ridesharing as a means of combating environmental, health, infrastructure and traffic concerns. •  In fact, a change in mindset could take place, in view of the Motor Vehicles (Amendment) Bill, 2016, recently introduced in Parliament. •  The Bill specifically allows state governments to formulate policies that help in reduction of traffic congestion, increasing last mile connectivity, improvement of urban transport, promotion of energy conservation and better utilisation of transport assets. •  This could give impetus to the Ridesharing cause and could be utilised to make a serious push with State Governments to study, trial and permit peer to peer ridesharing in India.
  32. 32. THANKS! Any questions? You can find me at: +91 99025 80203