Automobile Dealerships in Delhi in a Bind

The Supreme Court vide its order in a Civil Writ Petition on 16th February 2006 directed closure/sealing of commercial establishments including automobile dealerships operating from residential premises on 80 feet or wider roads, from 29th March 2006 onwards.

Since a number of commercial vehicle/car dealerships and a majority of two-wheeler dealerships were faced with this grim prospect of closure, a meeting of the Automobile Traders Association Delhi (ATAD) - a regional association of automobile dealers in Delhi, chaired by Prem Bagga, President ATAD was held on 22nd March 2006 to consider and decide on a course of action.

After extensive deliberations, members felt that a concerted effort was needed to sensitise the Government and the Hon'ble Court on the peculiar situation that automobile dealerships are faced with.

It was also decided at the meeting that the Automobile Traders Association Delhi representing automobile dealers affected by the court order should intervene in the case and put forth the following submissions before the Hon'ble Supreme Court:

▪	Automobile Dealerships are large establishments entailing huge investment;
▪	There are no commercial spaces in Delhi big enough to accommodate automobile sales showrooms, nor has any space been earmarked in any of the district/ commercial centres for operation of automobile dealerships;
▪	Automobile dealership is a composite activity comprising sales, service and spares. While automobile workshop is not allowed to be run in a commercial area, sales showroom along with a workshop is not permitted in an industrial area;
▪	Automobile dealerships are willing to be relocated if the alternative space is provided.

 
In keeping with this decision, the Automobile Traders Association Delhi as an interested party was prepared to intervene in the case and was represented by Mr Mukul Rohtagi, Sr Counsel, when the case came up before the Hon'ble Supreme Court bench comprising the Chief Justice of India and Justice C K Thakker for hearing on 24th March 2006.

The Supreme Court after hearing the submissions of various parties in the case reluctantly gave relief and agreed to extend the date of sealing of residential premises on 80 ft and wider roads being used for commercial activities, to 30th June 2006 as against the earlier deadline of 28th March 2006. This was on the condition that an affidavit to the effect that the misuse of residential premises for commercial activity would be stopped by 30th June 2006, should be filed with MCD individually by all occupiers of such premises, by 28th March 2006. The Court constituted a Monitoring Committee comprising Bhure Lal, Chairman, EPCA; K J Rao, former Advisor to Election Commission; and Maj General (Retd) Som Jhingan, who in addition to overseeing the MCD's action of sealing, will also consider such affidavits and issue appropriate instructions to the MCD's sealing team.

In a subsequent development, the Central Government responding to the concerns of traders and citizens of Delhi, has amended the Delhi Master Plan 2001 with effect from 28th March 2006 notifying certain roads for mixed land use. While this amendment to the Delhi Master Plan has provided a relief to a majority of automobile dealers, the confusion still persists and the MCD is going about the task of sealing of commercial establishments in residential premises, which had not filed their affidavits and those establishments that are located on the roads not notified for mixed land use under the amended Master Plan.

Meanwhile, the Supreme Court at a subsequent hearing on 31st March 2006 extended the date for those who had not filed their affidavits by 28th March 2006, to 7th April 2006.

The Automobile Traders Association Delhi jointly with FADA is trying to approach the concerned Government authorities to highlight the peculiar problem faced by automobile dealers in Delhi for a viable solution, including specific provisions in the Delhi Master Plan for operation of automobile dealerships and the godown facilities for vehicles.