Maharashtra and Gujarat state governments will investigate the role of General Motors India top management and assign responsibility in the company's recall of over 126,000 Chevrolet Tavera vehicles which did not comply with specifications. The states are also being asked to decide the amount of penalty and see if there was any criminal act. 

The Times of India said this was decided at an inter-ministerial group meeting 10 days after a Centre-appointed panel had charged the company of doing "corporate fraud". The group decided that the two state governments will set up special investigation teams (SITs) to find the extent of fraud and establish those responsible for this.

Last Friday, the committee decided to write to the chief secretaries of both the states where the two variants of Tavera - supposedly complying with BS-III and BS-IV emissions regulations - were manufactured. Sources told the paper the SITs will have to submit their findings in three months.

"As per the motor vehicle rules, the state transport departments are competent to take action. Since General Motors India has hidden some information, the SITs can call senior executives for questioning. It's up to these teams to call executives — including CEOs and managing directors — from 2005 to 2011-12 who may have been involved in this," said a government official. 

Once the extent of fraud and involvement is established, the state governments can take action under provisions of the Indian Penal Code (IPC). The earlier panel, headed by Nitin Gokarn, CEO of National Automotive Testing and R&D Infrastructure Project (NATRiP), involved with testing, validation and R&D, did not have the mandate of criminal investigation. 

The three-member panel had recommended imposition of a penalty apart from a systemic clean up to avoid recurrence of similar incidents in future. Though it had suggested action against the company as well as executives involved, the level of penalty was not specified. 

The committee had submitted that the company acknowledged to tempering of conformity of production (COP) as per the approved type. It had said that once the company realised that their engines were not consistent in meeting emission norms, the pre-selected and tested engines were fitted to vehicles that were sent for testing by government agencies. 

On Friday, the inter-ministerial committee also tasked the additional secretary of the heavy industries ministry to look into the entire recall policy by Indian automobile manufacturers. He will look into how the flaws in recalled vehicles are fixed. 

The three member panel has suggested sweeping changes in the testing procedures.