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Motor Vehicles Act, 1988


105.  Principles  and  method  of  determining  compensation  and  payment thereof. 

  1. Where,  in exercise  of the  powers conferred by clause (b)  or clause  (c) of  sub-section (2)  of  section  103 any existing permit  is cancelled or the terms thereof are modified, there shall be  paid by the State transport undertaking to the holder of the permit, compensation,  the amount  of which  shall  be  determined  in accordance with  the provisions of sub-section (4) or sub-section (5), as the case may be.

  2. Notwithstanding  anything contained  in sub-section  (1),  no  compensation shall  be payable  on account  of the cancellation of any existing permit  or any  modification of  the terms  thereof,  when  a permit for  an alternative  route or  area in  lieu thereof  has  been offered by  the State  Transport Authority  or the  Regional Transport Authority, as  the case  may be  and accepted  by the  holder  of  the permit.

  3. For  the removal  of doubts,  it is  hereby declared  that no  compensation shall  be payable  on account  of the  refusal to renew a permit under clause (a) of sub-section (2) of section 103.

  4. Where,  in exercise  of the powers conferred by clause (b) or sub-clause (i)  or sub-clause (ii) of clause (c) of sub-section (2) of section 103 any existing permit is cancelled or the terms thereof are modified so  as to  prevent the  holder of  the permit  from using any vehicle authorised  to be  used thereunder  for the  full period  from which  the   permit,  would   otherwise  have   been  effective,   the compensation payable  to the  holder of  the permit  for each  vehicle affected by  such cancellation  or modification  shall be  computed as follows:--

  1. for  every complete  month or  part of a month exceeding fifteen days of the unexpired period of the permit Two hundred rupees;

  2. for  part of  a month  not exceeding fifteen days of the unexpired period of the permit One hundred rupees:

Provided that  the amount of compensation shall, in no case, be less than four hundred rupees.

  1. Where,  in exercise  of the  powers conferred  by  sub-clause (iii) of clause (c) of sub-section (2) of section 103 the terms of an existing permit are modified so as to curtail the area or route of any vehicle authorised  to be used thereunder, the compensation payable to the holder  of the  permit on  account of such curtailment shall be an  amount computed in accordance with the following formula, namely:--

Explanation.--In this formula,--

  1. "Y"  means the length or area by which the route or area covered by the permit is curtailed;

  2. "A"  means the  amount computed in accordance with  sub-section (4);

  3. "R"  means the  total length  of the route or the total area covered by the permit.

  1. The  amount of  compensation payable under this section shall  be paid  by the  State transport  undertaking to the person or persons  entitled  thereto  within  one  month  from  the  date  on  which  the  cancellation or modification of the permit becomes effective:

Provided that where the State transport undertaking fails to make  the payment within the said period of one month, it shall pay interest  at the  rate of  seven per  cent. per  annum from the date on which it  falls due.



Motor Vehicles Act, 1988 Back




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