Proposed fines for building, not recalling faulty cars cut

The Government had proposed fines of Rs. 5 lakh to be imposed on vehicle manufacturers for manufacturing faulty cars and refusing to recall defective vehicles. A jail term of 3 years was also proposed for offenders. However, in the latest draft of the Road Transport and Safety Bill, these amounts seem to have been reduced drastically.

Now, the amount of penalty for manufacturing a defective car stands at Rs. 50,000 and for not recalling one stands at Rs. 1,00,000. The proposed 3 year-long jail term, however, has not been changed.

The National Road Safety and Vehicle Regulation Authority of India, a new regulator, will be set up by the central government. This body will have the power to impose fines and take action against erring vehicle manufacturers.

Since 2012, automobile companies have been issuing voluntary recalls in accordance with directions issued by the Society of Indian Automobile Manufacturers (SIAM). The draft of the new bill states that, manufacturers will not be liable for a fine if they inform the authority as soon as they become aware of manufacturing defects. They will also be required to provide proof and recall the vehicle for avoiding the fine. Additionally, they will have to compensate the buyers for the full value of the vehicle. They also have the option of replacing or repairing the vehicle.

The old bill required complaints from 100 vehicle owners for a recall to be considered. According to the draft of the new bill, the national authority will take a call.

Source: ET Auto