Lok Sabha Passes Motor Vehicles (Amendment) Bill, 2016 [Read Bill]

The Lok Sabha, on Monday, passed the Motor Vehicles (Amendment) Bill, 2016. It was passed by a voice note, and several amendments moved by the opposition were reportedly rejected.

The Bill was introduced in the Lok Sabha on August 9, 2016, aiming to amend the Motor Vehicles Act, 1988, and address issues around third party insurance, regulation of taxi aggregators, and road safety. The Cabinet had then approved various changes in the Bill last month. These include 16 amendments and rejection of three suggestions made by the Parliament Standing Committee. The Bill will now go to the Rajya Sabha for its nod, and then the President of India for his assent.

Highlights of the Bill:

• It links driving licence and vehicle registration with Aadhaar-based platform. The move comes in the wake of de-duplication of licenses and registration of stolen vehicles.


• It has further introduced penalty of ₹10,000 for ‘not providing way for emergency vehicles’.


• It removes the cap on liability for third party insurance. Third party insurance is the liability purchased from an insurer (insurance company) by person A (insured party) to protect himself against claims from person B (third party), in the event of death, injury, or damage to property. The 2016 Bill had capped the maximum liability for third party insurance in case of a motor accident at Rs 10 lakh in case of death and at five lakh rupees in case of grievous injury. This cap has been removed by the 2017 Bill.


• It proposes to create a National Register for Driving Licence and a National Register for Vehicle registration through “Vahan” and “Sarathi” platforms. This is in order to smoothen the process of registration and licensing.


• It proposes alterations in vehicles, in order to make them suitable for specially-abled people.


• It provides for a Motor Vehicle Accident Fund, which would provide compulsory insurance cover to all road users in India for certain types of accidents.


• It provides for a National Road Safety Board, to be created by the Central Government through a notification. The Board will provide advice to the Central and State Governments on all aspects of road safety and traffic management.


• It empowers the State Governments to specify a multiplier, not less than one and not greater than ten, to be applied to each fine under this Act and such modified fine.


• Contractors, consultants and civic agencies will be accountable for faulty design, construction or poor maintenance of roads leading to accidents. Those found guilty would be penalized up to Rs 1 lakh.


• A time limit of six months has been specified for an application of compensation to the Claims Tribunal with regard to road accidents.