Section 74 — Grant of contract carriage permit.

74. Grant of contract carriage permit.—(1) Subject to the provisions of sub-section (3), a Regional 

Transport Authority may, on an application made to it under section 73, grant a contract carriage permit 

in accordance with the application or with such modifications as it deems fit or refuse to grant such a 

permit: 

Provided that no such permit shall be granted in respect of any area not specified in the application.  



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(2) The Regional Transport Authority, if it decides to grant a contract carriage permit, may, subject to 

any rules that may be made under this Act, attach to the permit any one or more of the following 

conditions, namely:— 

(i) that the vehicles shall be used only in a specified area or on a specified route or routes; 

(ii) that except in accordance with specified conditions, no contract of hiring, other than an 

extension or modification of a subsisting contract, may be entered into outside the specified area; 

(iii) the maximum number of passengers and the maximum weight of luggage that may be carried 

on the vehicles, either generally or on specified occasions or at specified times and seasons; 

 (iv) the conditions subject to which goods may be carried in any contract carriage in addition to, 

or to the exclusion of, passengers; 

(v) that, in the case of motor cabs, specified fares or rates of fares shall be charged and a copy of 

the fare table shall be exhibited on the vehicle; 

(vi) that, in the case of vehicles other than motor cabs, specified rates of hiring not exceeding 

specified maximum shall be charged; 

(vii) that, in the case of motor cabs, a special weight of passengers’ luggage shall be carried free 

of charge, and that the charge, if any, for any luggage in excess thereof shall be at a specified rate; 

(viii) that, in the case of motor cabs, a taximeter shall be fitted and maintained in proper working 

order, if prescribed; 

(ix) that the Regional Transport Authority may, after giving notice of not less than one month,— 

(a) vary the conditions of the permit; 

(b) attach to the permit further conditions; 

(x) that the conditions of permit shall not be departed from save with the approval of the Regional 

Transport Authority; 

(xi) that specified standards of comfort and cleanliness shall be maintained in the vehicles; 

(xii) that, except in the circumstances of exceptional nature, the plying of the vehicle or carrying 

of the passengers shall not be refused; 

(xiii) any other conditions which may be prescribed. 

(3) (a) The State Government shall, if so directed by the Central Government, having regard to the 

number of vehicles, road conditions and other relevant matters, by notification in the Official Gazette, 

direct a State Transport Authority and a Regional Transport Authority to limit the number of contract 

carriages generally or of any specified type, as may be fixed and specified in the notification, operating on 

city routes in towns with a population of not less than five lakhs. 

(b) Where the number of contract carriages are fixed under clause (a), the Regional Transport 

Authority shall, in considering an application for the grant of permit in respect of any such contract 

carriage, have regard to the following matters, namely:— 

(i) financial stability of the applicant; 

(ii) satisfactory performance as a contract carriage operator including payment of tax if the 

applicant is or has been an operator of contract carriages; and 

(iii) such other matters as may be prescribed by the State Government: 

Provided that, other conditions being equal, preference shall be given to applications for permits 

from— 

(i) the India Tourism Development Corporation; 

(ii) State Tourism Development Corporations; 

(iii) State Tourism Departments; 



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(iv) State transport undertakings; 

(v) co-operative societies registered or deemed to have been registered under any enactment for 

the time being in force; 

(vi) ex-servicemen.