Thursday, April 6, 2017

BS IV and other BS by the Supreme Court - Thou Shall Not Drink

This will be a longish post, with no photos. So do pay attention and try not to fall asleep.

The days leading up to the 31st of March 2017 have been tremendously exciting. Our Hon’ble Supreme Court has passed two orders, both of which have effect from 1st April 2017, with far reaching consequences, bags and bags of financial losses, and scores of very unhappy people left in the wake. In the case of one order I am in complete and total agreement with the Supreme Court. With the other, I am more or less in disagreement with the Supreme Court, but, I believe the Court was driven to passing the order.

I am referring to the order whereby the sale of non BS IV vehicles was stopped with effect from 1st April 2017. I agree with this Order. The other Order, of course, is the liquor shops within 500 meters of the highway, with which I have some problems.

Let’s take the BS IV Order first.

In order to curb pollution caused by engines, the Government of India set standards and timelines for implementation and regulation of the output of air pollutants from internal combustion engines and spark ignition engines [i.e. petrol and diesel engines], equipment, and motor vehicles. These are set by the Central Pollution Control Board under the Ministry of Environment & Forests and Climate Change. These were introduced in 2000 and are based on European norms.

The first fallout of the implementation of these norms was the demise of the Maruti 800 and two wheelers with the old two stroke engines. Now all two wheelers have four stroke engines. You will also remember that Catalytic Converters and unleaded fuel were introduced. This too was because of the pollution norms. Of course, with more and more stringent norms, which as you know apply to fuel too, there is a higher cost of fuel as well as vehicles. The logic being that this higher cost will lead to clean air and will offset healthcare costs.

Anyway, things were going along on a rather even keel. It must be said that the role of the Government in this aspect has been exemplary. The norms have been notified well in advance giving manufacturers of engines, vehicles and fuels adequate time to gear up to the increasingly stringent norms. Not only has adequate time been given, but, the norms have not been tinkered with. So, there is no ground to really complain.

The BS IV norms were implemented for all 4 wheelers in the National Capital Region and 13 major cities in April 2010. Yes dear readers April 2010, seven years ago. It was also notified that post 31st March 2017 no non BS IV compliant vehicle [i.e. 2 and 4 wheeler] can be sold. In other words it was known in 2010 itself that by 31st March 2017 all 2 wheelers and all 4 wheelers sold in India have to be BS IV compliant.

Needless to say, our venal and dishonest vehicle manufacturers continued to make non BS IV vehicles and at the last moment petitioned the Supreme Court to permit them to clear inventories of such non-compliant vehicles. The Supreme Court, rightly refused. A damn good thing done by the Supreme Court.

Here is the clincher. Do you know who these manufacturers were? Hero, Honda – for 2 wheelers. Mahindra & Mahindra, Tata, Ashok Leyland. Except Honda, all the others are “Indian” companies. The others – Maruti Suzuki, Hyundai, GM, Ford, VW [and its arms – Skoda] and the luxury cars all were already compliant. Maruti which has greater than 50% volume share of the Indian car market was BS IV compliant in 2010 itself !!! And Mr.Pawan Goenka of Mahindra and Mahindra had the audacity when reacting to the Supreme Court refusal to permit sales to say “I am speechless.” You bloody well should be. You should be sacked by your boss the oh so proper Anand Mahindra. If not by him by the Board of Directors of Mahindra & Mahindra which comprise of such gents like Deepak Parekh, V S Mehta, Nadir Godrej. What do these worthies have to say about being on the Board of a company that persisted in manufacturing non BS IV vehicles? Corporate governance? Sleeping on the job?

The Liquor ban is an interesting conundrum. I believe that this will have to be eased. How you get the Supreme Court to blink is going to be a challenge.

Much has been written about it, however, in the past few days thinking about the Order, as well as talking to myriad people some interesting views have emerged.

But, before that, two declarations. First, this Order has absolutely nothing to do with the puritanical/Hindutva aspirations/motive/pronouncements by our Government. On the contrary, the Order may well have played into the Governments hands. So let’s, at this stage, not blame the Government for this Order. Secondly, if you read the Orders – there are two of them – you will be shocked at the state of affairs. By this I mean, the number of deaths on our highways and the sheer number of liquor vends [not restaurants] on the highway. But, should the Supreme Court have gone to this extent? I believe, no.

This is the first Order by the Supreme Court.

This is the second Order by the Supreme Court.

Do try and read them, especially the first Order. It is not difficult to read and understand. You will get a better idea of the reason why the Court was disturbed.

What baffles me is the fact that we do have a rather strict law on driving under the influence. OK Salman Bhai got away, but the law is strict and doing jail time is not an option. In fact, the experiments with the law that Salman Bhai did to snare himself an acquittal are directly proportional to the stringency of that law. So, in spite of this law our Court believes that prevention is better than the cure and thus banned sale of alcohol within 500 meters of a highway in totality. I find this approach disturbing. If knives in plain sight are factors leading to stabbings, should knives be “banned”?

The other upsetting factor is the extremely casual approach not only by our State Governments who were going to be impacted by this Petition but the very casual schoolboy argument approach of some of the Senior Counsel appearing.

This case started way back in 2015. The Supreme Court had been hearing the Case from time to time. At some stage the Court directed that notices be served on each State and Union Territory to appear and place its viewpoint across. In addition the Ministry also put out several advisories from time to time on the matter. Shockingly, only 8 States responded to the Notice and did appear. 18 States did not respond. This was the cynical view of the State Governments despite knowing that an order from the Supreme Court could have drastic consequences for the States.

Mr. K K Venugopal is a veteran Senior Counsel. Representing Tamil Nadu he made a terrible argument. Childish in the extreme, cavalier and sounded like a debate on TV. He said that there were road accidents by intoxicated drivers in the State of Gujarat where there is total prohibition. Suggesting thereby that banning sale of alcohol along the Highway is futile. This was a really foolish argument and played right into the hands of the Court. The Court relied on Government statistics showing that the highest number of accident were in Uttar Pradesh, Maharashtra, Madhya Pradesh, Andhra Pradesh and Tamil Nadu totally destroying Venugopal. Ironically, Uttar Pradesh, Maharashtra and Madhya Pradesh did not appear in response to the notice I referred to in the preceding paragraph.

On a different note, you must have read about the scores of liquor shops that have shut in Mumbai. You would have also read about the restaurants that have shut. There is an unfortunate twist in the tail in both these cases. Tragicomic.

I know this from personal experience. A liquor vendor in the Sion Chembur area had not been granted a license past 31st March as his shop fell within the 500 meter zone. So, on the 30th, he was winding down his operations and storing his unsold liquor stock in his garage. Our overzealous Excise authorities promptly raided him for keeping such large stocks of alcohol without a license in a garage.

The second story is even more bizarre. A restaurant or bar has a license to sell alcohol only in the premises. A bottle cannot be carried out of the permit area. Not only can the bottles not be moved out, the empty bottles have to be stored until the Excise authorities inspect the bars registers and tally the stock of alcohol bought, held in stock and the empty bottles. Once this is tallied, the empty bottles are destroyed. Yes this is reality under the Bombay Prohibition Act. So, all restaurants in the Zone who have unsold stock on 1st April 2017 are stuck with it. They cannot move it cannot sell it and cannot drink it.

This Order by the Supreme Court has far reaching consequences. Not only does it give our RSS/BJP/Hindutva chaps a hand but the impact on commerce and employment are huge. This, in my view, once again calls into question the stability and reliability of the business environment in India – fraught with risk, legal, political, environmental and everything else you can imagine.

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