Supreme Court of India imposed a complete ban on around 8,24,275 BS-III vehicles maintaining that the“health of people is far, far more important than the commercial interests of manufacturers”

By: Utkarsh Anand | New Delhi |

Published:March 29, 2017 9:51 According to submission in court, the counsels representing the auto industry said that if this stock is left unsold, it would lead to a loss of around Rs 12,000 crore to the industry, including dealers.
MAINTAINING THAT the “health of people is far, far more important than the commercial interests of manufacturers”, the Supreme Court Wednesday imposed a complete ban on the sale of BS-III-compliant vehicles in India from April 1 onwards and rejected an appeal by the automakers to let them clear existing stock.
The central government’s support for automobile companies in their bid to sell around 8.24 lakh vehicles in stock, which comply with BS-III emission norms, failed to cut much ice with a bench of Justices Madan B Lokur and Deepak Gupta. The bench said that all stakeholders were aware for the last six years that a better emission standard, BS-IV, would come in force from April 1, 2017, and therefore, piling up BS-III stock was a bad call on their part.
“The number of such vehicles may be small compared to the overall number of vehicles in the country but the health of people is far, far more important than the commercial interests of manufacturers or the loss that they are likely to suffer in respect of the so-called small number of such vehicles,” held the bench.
The court clarified that while the sale would stop April 1 onwards, the vehicles sold till a day before will get registered by the competent authorities on showing “proof that such a vehicle has already been sold on or before March, 31, 2017”.
The court was informed that various companies, including Hero MotoCorp, Tata Motors, Mahindra, TVS Motor, Ashok Leyland, and Honda Motorcycle and Scooter India (HMSI), currently hold an inventory of 8,24,275 BS-III vehicles: 96,724 commercial vehicles, 6,71,308 two-wheelers, 40,048 three-wheelers and 16,198 cars.
According to their submission in court, if this stock is left unsold, it would lead to a loss of around Rs 12,000 crore to the industry, including dealers.
With less than three days to go for the deadline to come into effect, the court order is likely to prompt companies to offer huge discounts on their existing BS-III stock. Automobile manufacturers, such as Maruti Suzuki and Hyundai Motor Co, had already moved to BS IV car models a while ago.
The court-mandated Environment Pollution Control Authority (EPCA) had moved the bench with a plea for a prohibition on sale and registration of BS-III vehicles after March 31, to prevent them from adding to the alarming levels of pollution. It said that companies could not ask for a relaxation when they had chosen to delay a complete switch from BS-III to BS-IV despite possessing the technology and technical know-how.
Besides, auto major Bajaj had pleaded that the court should step in and impose the deadline since any extension would give their rivals an unfair advantage to carry on selling vehicles at a lower cost.
On the other side, the companies holding BS-III stock as well as the government had requested permission to clear existing stock, particularly because auto manufacturers were allowed to dispose of their stocks in 2005 and 2010 when new emission norms were made compulsory.
But the bench remained unimpressed with the plea for relaxing the condition “keeping in mind the potential health hazard of such vehicles being introduced on the road affecting millions of our people in the country”. It emphasised that public health concerns will overrule all other considerations and that the right to health, being a fundamental right, must supercede all commercial interests.
The court pointed out: “The manufacturers were fully aware that eventually from 1st April, 2017, they would be required to manufacture only BS-IV compliant vehicles but for reasons that are not clear, they chose to sit back and declined to take sufficient pro-active steps.”
It also lent credence to a statement by Solicitor General Ranjit Kumar that from April 1 onwards, the requisite quality fuel for BS-IV compliant vehicles would be available all over the country. The law officer had also apprised the bench that refineries of the central government had incurred an expenditure of about Rs 30,000 crore for producing requisite fuel for BS-IV compliant vehicles.
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