"The Centre had spent thousands of crores of rupees to upgrade technology to produce BS-IV fuel and the companies could not be allowed to frustrate the government's initiative to check increasing pollution levels by selling around 8.2 lakh BS-III vehicles which they are holding in stock," a bench of Justices Madan B Lokur and Deepak Gupta said.
The court will take up the matter again today.
The automobile companies have approached the Supreme Court to dispose of their stock as the Bharat Stage IV (BS-IV) emission norms are to come into force from April 1. During the hearing, the bench said three options were available before it.
These were either taking a drastic step to ban registration of BS-III vehicles or allow their registration but ban plying of such vehicles in major cities or ask the companies to pay costs for creating health hazards and reimburse the Centre which spent enormous money in upgrading fuel standard.
Society of Indian Automobile Manufacturers (SIAM) had submitted data on manufacturing and sale of BS-III vehicles on a monthly basis from January 2016 and told the court that the companies were holding stock of around 8.24 lakh such vehicles including 96,000 commercial vehicles, over six lakh two-wheelers and around 40,000 three-wheelers.
The manufacturers told the court that they were allowed to sell their stocks with old emission norms when new technology was brought in force on the previous two occasions at the time the industry had switched to BS-II and BS-III in 2005 and 2010.
They also contended that they had stopped manufacturing BS-III vehicles.