- Bookmark
- Share
- CaseIQ
M.C. Mehta v. Union Of India And Others
Factual and Procedural Background
On 16-12-2015 the Court had prohibited the registration of private diesel cars and SUVs with an engine capacity of 2000 cc and above in Delhi and the National Capital Region (NCR). That interim ban, continued by subsequent orders, prompted several automobile manufacturers and dealers to file interlocutory applications (IAs) seeking either impleadment or vacation of the restriction. During the hearing of these IAs, certain manufacturers—most notably Mercedes-Benz and Toyota Kirloskar—volunteered to pay an Environment Protection Charge (EPC) equivalent to 1 % of the ex-showroom price of each affected vehicle as a condition precedent to registration. The present order resolves those applications and modifies the earlier ban.
Legal Issues Presented
- Whether the Court’s previous prohibition on the registration of diesel vehicles of 2000 cc and above should be modified to allow registration upon payment of an Environment Protection Charge equal to 1 % of the ex-showroom price.
- Whether the scope of the EPC should be extended to diesel vehicles with engine capacity below 2000 cc and/or whether the 1 % rate should be increased. (These questions were noted but left open for future determination.)
Arguments of the Parties
Applicants/Manufacturers and Dealers
- Mercedes-Benz and Toyota Kirloskar offered, without demur, to deposit 1 % of the ex-showroom price of each 2000 cc and above diesel vehicle sold, requesting that registration be permitted upon such deposit.
- Galaxy Automobiles (a Toyota dealer) supported the proposal and sought identical relief.
- The Society of Indian Automobile Manufacturers (SIAM), through Dr. A. M. Singhvi, contended that once the Court accepted the 1 % EPC model, the benefit of registration on that basis should be extended to all similarly placed manufacturers and dealers.
Amicus Curiae
- Mr. Harish N. Salve agreed that the order could be modified to permit registration upon payment of the 1 % EPC but submitted that the levy should also apply to diesel vehicles below 2000 cc.
- He proposed that the Central Pollution Control Board (CPCB) open a dedicated bank account, with Registration Officers required to verify payment before registering any vehicle.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Order dated 16-12-2015, (2016) 4 SCC 269 / (2016) 4 SCC 277 | Initial prohibition on registration of diesel cars & SUVs of 2000 cc and above in Delhi-NCR. | Formed the baseline regulatory measure which the present order partially modifies to allow conditional registration upon payment of EPC. |
Court's Reasoning and Analysis
The Court found merit in the voluntary offer by manufacturers to pay an Environment Protection Charge and saw “no reason to decline the prayer.” It therefore:
- Directed the Central Pollution Control Board to open a separate account in a scheduled public-sector bank to receive EPC payments.
- Held that deposit of 1 % of the ex-showroom price is a condition precedent to registration of any diesel vehicle of 2000 cc and above in Delhi-NCR.
- Modified the 16-12-2015 order to that extent.
- Left open for future adjudication:
- Whether diesel vehicles below 2000 cc should also attract the EPC.
- Whether the 1 % rate should be increased. Any future increase would operate prospectively.
- Disposed of connected IAs accordingly:
- IAs 376-77 and related applications—registration permitted upon 1 % EPC payment.
- IAs 461-62—ambulance vehicles of 2000 cc allowed registration on the same terms.
- IAs 467-68—garbage utility vehicles for Tihar Prisons permitted registration without any EPC.
Holding and Implications
ORDER MODIFIED & APPLICATIONS DISPOSED OF.
Registrations of diesel cars/SUVs of 2000 cc and above in Delhi-NCR are now permissible upon payment of a 1 % Environment Protection Charge to the CPCB. Ambulance vehicles must comply with the same condition, while certain garbage utility vehicles are exempt. The decision grants immediate relief to manufacturers and purchasers but reserves the Court’s authority to broaden the EPC to smaller-capacity diesel vehicles or to raise the levy in the future; no new binding precedent on those broader questions was established.
Order
IAs Nos. 375-77, 380-82, 390, 399-400, 445-46
1. By our order dated 16-12-2015 (2016) 4 SCC 269, (2016) 4 SCC 277, we had while issuing several other directions forbidden registration of private cars and SUVs with an engine capacity of 2000 cc and above running on diesel fuel. That direction was initially effective up to 31-3-2016 but subsequently continued pending further orders. The position as on date is that registration of private cars and SUVs running on diesel fuel with an engine capacity of 2000 cc and above are not being registered in Delhi and NCR region. Several manufacturers of such cars and SUVs have however appeared and filed applications seeking impleadment and vacation of the said direction.
2. We had at some length heard these applications and reserved pronouncement of orders on 4-7-2016 2016 SCC OnLine SC 1804. Mr Mohan Parasaran, learned Senior Counsel appearing for the applicant Mercedes Benz, one of the manufacturers had in the intervening period mentioned the matter and offered to deposit 1% of the ex-showroom price of the 2000 cc and above diesel vehicles manufactured by his client towards environment protection charge and sought modification of the order so as to permit registration of such vehicles on deposit of the said amount. Mr Parasaran was asked to file a suitable affidavit to that effect which has been filed.
3. Mr Gopal Subramanium and Mr Mohan Parasaran today appear to submit that Mercedes Benz shall have no objection and would indeed be willing without demur to deposit environment protection charge mentioned above equivalent to 1% of the ex-showroom price of the diesel vehicles manufactured by that company as a condition precedent for registration of such vehicles by the jurisdictional Registration Officers. They submit that the said amount could be used by the Government or by such other agency as this Court may identify for such purpose as the Court may direct.
4. A similar offer has been made even by Toyota Kirloskar Private Ltd. who is also manufacturing diesel cars with the engine capacity of 2000 cc and above. Mr P.V. Shetty, learned Senior Counsel appearing on behalf of Galaxy Automobiles Private Company who happens to be a dealer in cars manufactured by Toyota Kirloskar Private Ltd. also makes a similar offer. Dr A.M. Singhvi, learned Senior Counsel appearing for the Society of Indian Automobile Manufacturers (SIAM) however argued that while some of the members of the association may also be similarly willing to deposit environment protection charge mentioned above, the benefit of registration of their cars on payment of the charge @ 1% of the ex-showroom price should be available to such manufacturers and dealers also.
5. Mr Harish N. Salve, learned Amicus Curiae argues that while the order passed by this Court could be suitably modified to permit registration of diesel cars/SUVs of 2000 cc capacity and above upon deposit of 1% of the ex-showroom price towards environment protection charge, the said requirement should be extended even to diesel cars with less than 2000 cc capacity. He argued that the deposit could be directed to be made in an account to be opened by the Central Pollution Control Board (CPCB) with a direction that the Registration Officer concerned shall register the vehicles offered for registration only upon satisfying himself about the deposit of the amount and not otherwise.
6. Insofar as the deposit to be made with the CPCB is concerned, we see no reason to decline the prayer. We accordingly direct that the CPCB shall open a separate account in a scheduled public sector bank to receive the amount representing 1% of the ex-showroom price of every diesel car that is sold by any manufacturer/dealer in Delhi and NCR region. The deposit of the amount alone shall entitle the manufacturer/dealer or the purchaser of the car to have the car registered within Delhi or NCR region. Our order dated 16-12-2015 (2016) 4 SCC 269, (2016) 4 SCC 277 shall to that extent stand modified. We, however, leave open the question whether cars less than the capacity of 2000 cc using diesel fuel should also be subjected to a similar charge. So also the question whether the rate of the charge ought to be limited to 1% or raised is left open to be determined at an appropriate stage. We all the same make it clear that any such enhancement in the charge if so directed by the court would not have any retrospective effect.
7. With these observations and modification, IAs Nos. 376-77 and all connected IAs relevant to these aspects are disposed of.
IAs Nos. 461-62
8. The learned counsel for the applicant submits that he is ready and willing to deposit 1% towards environment protection charge as directed in IAs Nos. 376-77 for the registration of diesel ambulance cars with engine capacity of 2000 cc. In that view IAs Nos. 461-62 are also disposed of in similar terms.
IAs Nos. 467-68
9. For the reasons stated in the application, we permit registration of utility vehicles (garbage vehicles) of 2000 cc and above used by the Prisons Department, Tihar. The registration shall be free from environment cess/charge on the same.
10. IAs Nos. 467-68 are accordingly allowed and disposed of.
IAs Nos. 463-64, 466 and report with regard to installation of Radio Frequency Identification (RFID) for effective and credible ECC collection dated 10-8-2016
11. Post on Monday i.e. 22-8-2016 at 1.30 p.m.
IAs Nos. 383-84, 394, 397-98, 402-03, 418, 455, 466, 469 in IA No. 365 in IA No. 345 in WP (C) No. 13029 of 1985 and IA No. 470 in IAs Nos. 439-40 of 2016 in IA No. 365 in IA No. 345 in WP (C) No. 13029 of 1985, IA No. 470 in IAs Nos. 439-40 of 2016 in IA No. 365 in IA No. 345 in WP (C) No. 13029 of 1985
12. Post these IAs along with IA No. 345 and affidavit filed by the Department of Heavy Industries and Public Enterprises at an appropriate date.
Court Masters
Alert