‘Health Before Profits’:Supreme Court bans sale of BS-III vehicles from 1 April:Rs 12,000-cr inventory at stake.

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SC bans sale of BS-III compliant vehicles from 1st April 2017.image courtesy:Hindustan Times

The health of the citizen is more important than the commercial interests of the automobile industry, the Supreme Court observed on Wednesday and ordered a freeze on the registration and sale of BS-III fuel compliant vehicles by “any manufacturer or dealer” on and from April 1, when the next level and environmentally friendly BS-IV fuel emission standards are scheduled to kick in.

A bench of justices Madan B Lokur and Deepak Gupta said that health of millions of citizens was more important that commercial interests of manufacturer’s  inventories and the sale and registration of BS-III compliant vehicles will not be permited from 1st April 2017.

The Centre had this week backed auto manufacturers, who pleaded they had unsold stock of about 8 lakh vehicles that meet the BS III emission norms. The companies had suggested the government deadline for 1 April 2017 was for stopping manufacture of BS III vehicles, and not their registration.

The manufacturers had also argued companies were allowed to sell their stocks with old emission norms when earlier versions of emission norms were introduced in 2005 and 2010.

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.

But the top court brushed aside this argument, going by the Bhure Lal-headed Environment Protection Control Authority’s report that BS IV vehicles had 80 per cent lower particulate emissions as compared to the previous version.

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.”

However, India’s automobile bigwigs had a mixed reaction on the Supreme Court order.

“We are shocked by the judgement. The judgement will come as a big shock to industry,” said Vikram Kirloskar, according  to Vice Chairman of Toyota Kirloskar Motor.

Meanwhile supporting the SC order, Rajiv Bajaj, Managing Director of Bajaj Auto told sources, “We are delighted by the SC order on BS-III vehicle ban. We will be zero BS-111 stock by 1 April in three wheelers. This is the signal that things are changing.

According to sources in the auto industry, there are 75,000 unsold BS-III commercial vehicles, 16,000 passenger vehicles, 40,000 three-wheelers and 6.71 lakh two-wheelers. Hero Motocorp has over 3.28 lakh units of BS-III vehicles in its inventory which is estimated to be over 1,200 crore.