One of the most highly debated provisions of the Motor Vehicles Amendment Bill 2016 is the proposed insertion of Section 110A in the Act. The implementation of this provision is largely aimed towards the vehicle manufacturers instead of the users, and the industry will witness a significant paradigm change regarding the policy of recall of vehicles. For many years, this has been a grey area as well as a loophole in the laws regarding motor vehicles, and the industry largely used to practice voluntary recalls.

Under this provision, the central government will be granted the power to direct a vehicle manufacturer to recall some of its motor vehicles. Such an order will be contingent on various conditions –

  • If the vehicle may cause harm
    • to the environment
    • to the driver
    • to the occupants of the vehicle
    • or to other road users

A recall order can even be made if the defects in the vehicles are reported to the central government by –

  • A certain percentage of owners
  • A testing agency
  • Or any other source

The abovementioned criteria seems too broad, and there exists a possibility of abuse of this provision by the relevant authorities, especially in the light of the stricter penalties as laid down in the amendment bill.

The Bill also proposes provisions regarding compensation to the vehicle users being affected by such an order, and the vehicle manufacturer will have to –

  • reimburse the buyers for the full cost of the vehicle, or
  • replace the defective vehicle with another vehicle with similar or better specifications.

Clause 5 of the impugned section (110A) vests on the central government the power to appoint an officer who shall have all the powers of a civil court, while trying a suit under the Code of Civil Procedure, 1908 in respect of the following matters, namely:—

  • summoning and enforcing the attendance of any person and examining him on oath;
  • requiring the discovery and production of any document;
  • receiving evidence on affidavit; and
  • any other matter as may be prescribed.