SC ban on BS-III vehicles: What dealers have to say

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New Delhi : Observing that the health of people was "far more important", the Supreme Court on Wednesday said vehicles that do not comply with BS-IV emission norms cannot be sold in the country after April 1, 2017.

The bench of Justice Madan B. Lokur and Justice Deepak Gupta also prohibited registration of BS-IV non-compliant vehicles from April 1 at all the vehicle-registering authorities. 

"On and from 1st April, 2017, such vehicles that are not BS-IV compliant shall not be sold in India by any manufacturer or dealer, that is to say that such vehicles whether two-wheeler, three-wheeler, four-wheeler or commercial vehicles will not be sold in India by any manufacturer or dealer....," the court said in its order.

"All the vehicle registering authorities under the Motor Vehicles Act, 1988, are prohibited for registering such vehicles on and from 1st April, 2017, that do not meet BS-IV emission standards, except on proof that such a vehicle has already been sold on or before 31st March, 2017," it added.

Banning the sale and registration, the court said the health of the people was "far far more important than the commercial interests of the manufacturers".

Erich Nesselhauf, Managing Director and CEO of Daimler India Commercial Vehicles, in a statement said, "Today's decision of the Supreme Court reassures us in our belief that industry interests must go together with the interests of the society at large. The BS-IV standard will bring much needed improvements in terms of air quality, to the benefit of the people and the environment." 

"We are now counting down for next week's launch of our all-new range of BharatBenz trucks, featuring our clean and fuel-efficient BS-IV technology package. We could not have chosen a better timing to introduce these fresh new products," he added.

Vinod K. Dasari, MD and CEO of Ashok Leyland Ltd, dismissing the reports on huge write-off of BS-III inventories by his company, said: "Ashok Leyland has been making BS-IV vehicles since 2010 and has sufficient capability and capacity to make BS-IV vehicles. However, since BS-IV commercial vehicles cannot run properly on BS-III fuel -- and such fuel is not available nationwide -- our customers continued to buy BS-III vehicles."

"Given the current demand, majority of the vehicles in the pipeline have already been sold."

"Of the little inventory that we expect to remain beyond this, we will export them to other markets where we have significant presence and still operate on BS-III norms. Finally, for any other vehicles still left over, the Company confirms that it will be able to easily upgrade them to BS-IV at minimal cost," Dasari added.

Speaking on the order, Nikunj Sanghi of Federation of Automobile Dealers Associations (FADA) in an interview to BTVi said, "We are definitely sitting on huge inventories of BS-III vehicles."

"Since the manufacturer did see this coming, I am sure something will prevail upon dealers and manufacturers to work out a solution which mitigates the loss," Nikunj said.

Talking about the inventory of the BS-III vehicle with the industry, he said, "If I go by the affidavits filed by the manufacturers in the SC, I think the value of the inventory would be anywhere from Rs 12,000 to 15,000 crore."

Raj Panjwani, Senior Advocate, commenting on the judgment, said, "It is a very big has got huge ramification as far as stocks are concerned... the question will now come up as to whether we can convert these BS-III into BS-IV vehicles."

"If you can't convert them, then the issue will come up that what do we do with these vehicles. When we have such huge stock, the question arises what will be the environmental cost of not being able to utilise or maybe scrapping them in some places," he said to BTVi.

"I hope the SC listens to the plea being made... If they don't do, then the dealers as well as the manufacturers are stuck with the stock," Panjwani added.

The central government earlier told the court on March 27 that March 31 was the deadline for stopping the production of BS-III emission norm vehicles but there were no curbs on their sale beyond the deadline or halting their manufacturing.