SC Nullifies Post-March 31 Sale Of BS-IV Vehicles ; Bars Registration Of Such Vehicles [Read Order]

The Supreme Court on Wednesday recalled its March 27 order which allowed sale of 10% of unsold BS-IV vehicles for ten days after the lockdown, in areas except Delhi-NCR, after noting that the automobile dealers sold such vehicles during the lockdown in violation of the order.

Following the recall of the order, the bench headed by Justice Arun Mishra held that such vehicles sold during lockdown should not be treated as sold, and that the consideration received should be refunded to the purchasers. The Court also ordered that no such vehicle sold after March 31 should be registered.

"...the vehicles shall be treated to be with dealers as if they are not sold and consideration if any received shall be returned forthwith to the purchasers, no such vehicles sold after 31.03.2020 of BS-IV technology shall be registered", ordered the bench, also including Justices S Abdul Nazeer and Indira Banerjee.

The Court pulled up the Federation of Automobile Dealers Association(FADA) and other dealers for selling more vehicles during lockdown.

"It passes comprehension, how sale of vehicles could have been taken place during the lockdown. It was stated that may be that online sales have taken place and it was also stated in the affidavit that distress sales had taken place. Be that as it may, since the transactions given in the tabular form indicate more sales as compared to the data of non-lockdown period, we have no hesitation in recalling the order allowing the vehicles to be sold for 10 days after the lockdown was over", the SC observed.

The bench noted that the earlier order granting relief to the dealers was made owing to the lockdown, at the request of the Association, to make up for the loss of six days before the March 31 deadline on account of declaration of national lockdown on March 24.

Noting that more vehicles were sold during the lockdown ,the Court held :

"In view of the fact that Members as well as Non-Members had sold more vehicles during lockdown period, we have no hesitation to recall the order dated 27.03.2020 to aforesaid extent as it was passed only on the consideration that during lockdown, they would not be able to sell any vehicle that was the sole consideration for this Court to pass the order."- Supreme Court.

The benefit of the Courts order could not have been taken "two-ways" by making more sales during the period of lockdown and grace period of ten days further after 31.03.2020, the bench said.

On the aspect of registration of vehicles, the court asked the Centre through Senior Advocate Aishwarya Bhati to submit the verified details of vehicles which were uploaded on the government's e-portal, "Vahan" so as to ascertain whether the transactions during lockdown were genuine or they have been "back-dated".

"we request Ms. Aishwarya Bhati, learned Additional Solicitor General of India, to make verification as per the list submitted as to which vehicles were actually put on the E-Vahan portal of the Government and the data from other States of which data was not uploaded on E-Vahan portal also to be ascertained and filed before this Court before the next date of hearing, only thereafter we will consider question of registration and not before that", the Court said.

The Federation of Automobile Dealers Association of India (FADA) submitted a complete affidavit with details of sold but unregistered BS-IV vehicles to the Supreme Court as part of its plea that registration of these vehicles is allowed beyond the original March 31 deadline, in the wake of the COVID-19 lockdown.

On the last date of hearing, the Court had directed the ASG to collect details from all the RTOs throughout India and furnish information regarding number of vehicles sold in the BS­IV category are sold and registered after lifting of the lockdown.

March 27 order

In a slight relief for the automobile industry, the Supreme Court had on March 27 granted some relaxations to the March 31 deadline for the sale and registration of BS IV vehicles.

The Court allowed the sale of 10% of unsold BS IV compliant vehicles for 10 days, after the end of the 21-days countrywide lockdown.

However, the Court noted that such sale was not permissible in Delhi-National Capital Region. Sold BS IV vehicles had to be registered within 10 days of sale & BS IV vehicles brought before March 31 can be registered later too.

The court passed the order in a petition moved by Federation of Automobiles Dealers Association (FADA), which sought 30 days extension of March 31 deadline, citing lockdown.

The FADA had submitted that 7 lakh two wheelers, 15,000 passenger cars, and 12,000 commercial vehicles remained unsold and this was causing a huge liquidity crisis to the industry.

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