Cellular Automata (CA) modelling is extended to study the heterogeneous traffic observed in developing countries. In heterogeneous traffic, the physical and mechanical characteristics of different vehicles vary widely which in turn leads to complex traffic behaviour resulting in no-lane discipline. This nature of the heterogeneous traffic is modelled with the help of an improved discrete CA model. A detailed description of the methodology used in developing the basic structure of the CA model is presented and the modified methodology is used to generate different traffic scenarios. From the results, it is observed that with the help of simple updating rules along with typical heterogeneous traffic characteristics of the region, this model is able to reproduce real traffic behaviour. An added advantage is that the modified structure of the CA model can also be used to extract some basic traffic characteristics which are useful in understanding the heterogeneous traffic behaviour. The simulation model is finally validated using the flow and occupancy relationship obtained from the field.