Motor Vehicles (Amendment) Bill 2019

Motor Vehicles (Amendment) Bill 2019 passed by Rajya Sabha

The Motor Vehicles (Amendment) Bill, 2019, which seeks to amend the Motor Vehicles Act, 1988, has been passed by the Rajya Sabha.

Key highlights: 

Compensation for road accident victims: The central government will develop a scheme for cashless treatment of road accident victims during golden hour. The central government may also make a scheme for providing interim relief to claimants seeking compensation under third party insurance.

Vehicle Fitness: The Bill mandates automated fitness testing for vehicles and provides for compulsory recall of defective vehicles and power to examine irregularities of vehicle companies.

Recall of Vehicles: It allows the central government to order for recall of motor vehicles if a defect in the vehicle may cause damage to the environment, or the driver, or other road users. The manufacturer of the recalled vehicle will be required to either reimburse the buyers for the full cost of the vehicle or replace the defective vehicle with another vehicle with similar or better specifications.

Road Safety Board: It provides for a National Road Safety Board which must be created by the central government through a notification.

Protection of Good Samaritan: In order to help road accident victims, Good Samaritan guidelines have been incorporated in the Bill. It defines a Good Samaritan as a person who renders emergency medical or non-medical assistance to a victim at the scene of an accident, and provides rules to prevent harassment of such a person.

Cashless Treatment during Golden Hour: It provides for a scheme for cashless treatment of road accident victims during the golden hour.

Third Party Insurance: The Bill has included the driver’s attendant in 3rd Party insurance. There will be no cap on liability of insurers. There will be a 10 time increase in insurance compensation, from Rs 50,000 to Rs 5 lakh. Claim process has been simplified. Insurance firms have to pay claims within a month, if the victim’s family agrees to accept Rs 5 lakh compensation.

Hit and run cases: The Bill increases the minimum compensation for hit and run cases from Rs 25,000 to Rs 2 lakh in case of death, and from Rs 12,500 to Rs 50,000 in case of grievous injury.

Motor Vehicle Accident Fund: The Bill requires the central government to constitute a Motor Vehicle Accident Fund to provide compulsory insurance cover to all road users in India.

Provision for online driving licenses: The Bill provides for online Learners Licence with mandatory online identity verification. Driving test will be computerized to avoid fake driving license. Commercial licenses will be valid upto 5 years instead of 3 years.

Process of Vehicle Registration: In order to bring harmony of the registration and licensing process, the bill proposes to create a National Register for Driving Licence and National Register for Vehicle registration through “Vahan” & “Sarathi” platforms.

Issues with the bill:
  1. With a Fund already existing to provide compensation for hit and run accidents, the purpose of the new Accident Fund is unclear. 
  2. State governments will issue licenses to taxi aggregators as per central government guidelines. Currently, state governments determine guidelines for plying of taxis.  There could be cases where state taxi guidelines are at variance with the central guidelines on aggregators. 
  3. While the penalties for contravening provisions of the proposed scheme on interim relief to accident victims are specified in the Bill, the offences that would warrant such penalties have not been specified.  It may be argued that imposing penalties without knowing the nature of the offences is unreasonable.
  4. States also have concerns about their powers being curtailed in the Motor Vehicle (Amendment) Bill.

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