Bombay HC quashes Maharashtra transport dept orders blacklisting BS-IV compliant vehicles first sold before cut-off date

A division bench of Justice Gautam S Patel and Justice Madhav J Jamdar on April 13 passed a judgement striking down the blacklisting orders and restored cancelled registrations. The list of vehicles consisted of two-wheelers, four-wheelers, including high-end cars like BMWs, Mini Cooper, Porsches, and commercial vehicles.

The state transport department had taken action against the dealers stating that several vehicles were sold to individuals connected with the dealerships or distributorships, who took the vehicles in their names before the cut-off date of March 31, 2020, as mandated by the Supreme Court and further sold them to others. The state authorities held such “second sales” as “illicit and prohibited” and passed blacklisting orders.

The top court in October 2018 restrained authorities from registering any vehicle conforming to the emission standard BS-IV in the country from April 1, 2020. The reason for the prohibition was that the regulatory regime was moving towards cleaner energy and fuels with stricter standards at the level of BS-VI.

The HC refused to accept the state’s claims and said that the name of the transferee was immaterial and the requirement of a sale prior to March 31, 2020, and registration prior to the cut-off date itself acted as an automatic filter and limited the number of BS-IV compliant vehicles that could possibly enter the market.

The court said it was common business prudence because “no individual director would know what to do with 295 BMWs or Mercedes-Benzes.” It directed the transport department to permit registration, sale or further transacting of over BS-IV compliant vehicles and said that if any vehicle is found to have been first sold on or after April 1, 2020, or registered on e-Vahan portal after the said date, it does not fall within the SC mandate and cannot be permitted to be registered, sold or piled.

The petitioners included car dealers or distributors and vehicle owners connected with them from various parts of Maharashtra, who, through advocate Pradeep Thorat challenged the blacklisting and cancellation of registration of their BS-IV compliant vehicles and said that same were within the SC deadline of April 1, 2020.

The bench observed that the SC orders did not prohibit the transfer of the said vehicles to individual directors, partners or dealers themselves and the only requirement seemed that there ought to have been an off-take from the distributors to individuals before March 31, 2020.

The HC held, “A more accurate reading is that the second sales are permitted but are restricted to those vehicles that were sold before March 31, 2020, and which sales were registered on the e-Vahan portal before March 31, 2020. If such second sales are not allowed, then another, possible absurd and possibly environmentally unacceptable result would occur namely that there would be a large stock of vehicles now in the names of individuals connected with distributorship or dealership which could not be used at all and would have to be turned to scrap or junked without ever being used. We see nothing in the orders passed by the Supreme Court to support such a rigid view.”