Auto firms to be fined up to Rs 1 crore on mandatory recall orders for defective vehicles: Govt

Automobile companies will have to pay up to Rs 1 crore as a penalty in case of mandatory recall orders by the government for defects in manufacturing from April 1, 2021, the Ministry of Road Transport and Highways said on Wednesday.

The ministry has issued rules for mandatory recall of defective vehicles by manufacturers.

The notification mentions fines ranging from Rs 10 lakh to Rs 1 crore on the basis of the number of vehicles and types of vehicles.

The rules for the testing of vehicles and mandatory recall under the Central Motor Vehicles Act provides for penalty in case of manufacturers or importers fail to undertake voluntary recall.

At present, there is no penalty for it.

The government also said that it would set up a portal for vehicle owners to register and lodge complaints.

Based on complaints, notices will be slapped on automobile companies providing them 30 days time to respond. A government agency will probe into the complaints before ordering a mandatory recall.

The new rules will apply to vehicles that are less than seven years old with the ministry defining defect as a fault in a vehicle or component or software that poses or may pose an undue risk to road safety.