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Petition Filed Before Karnataka Lokayukta on HSRP

In Automobile
January 09, 2024

Jithendra S N, who is president of Akhila Karnataka Vehicle Number Plates Manufacturers and Sellers Association, has filed a petition before the Karnataka Lokayukta alleging Rs 700-crore corruption resulting from the state Transport Department’s order making it mandatory for vehicles purchased before April 1, 2019 to install high security registration plates (HSRPs).

Jithendra, who filed the petition in his personal capacity, alleged that the Transport Department exclusively permitted vehicle manufacturers (OEMs) and their dealers to supply and fix HSRPs on old vehicles to control and check the substandard material, thereby allowed only OEMs and their dealers to sell and affix HSRP on old vehicles in accordance with the Central Motor Vehicles Rules 1989 and prohibited all other entities including HSRP Manufacturers from direct supply of High Security Registration Plates to the owners of old vehicles.

Rule 50 of the Central Motor Vehicles Rules, 1989 and Clause 4 & 5 of the Motor Vehicles (High Security Registration Plates) Order, 2018 specifically provide that OEMs shall purchase blank registration plates for both old as well as new vehicles from HSRP Manufacturers with whom they have commercial agreements for this purpose and supply the same to their dealers and the dealers after embossing the registration number on such plates using their own infrastructure should sell that High Security Registration Plates to the owners of old vehicles . But neither OEMs nor their dealers are supplying HSRPs on old vehicles.

By taking advantage of some provisions which has been discreetly sneaked into the notification in stark contradiction to the prohibition imposed by the very same notification, a small cartel of HSRP manufacturers who have commercial agreement with OEMs for supplying registration plates to them are directly selling HSRP to the owners of old vehicles by charging exorbitant price.

The complaint, alleging corruption and dereliction of duty, was filed against four senior bureaucrats of the Transport Department.

The petition mentioned that the website of the State Transport Department is exclusively under the control of these four officials, and it permits the customers to enter into the portal of HSRP manufacturers who are having agreement with the vehicle manufacturers through a link in the website. The customers, who make the payment to the HSRP manufacturers through the portal and get the bills directly by them, are under the impression that they are making payment to the Transport Department.

It further alleged that an amount of Rs. 778.80 is being collected by HSRP manufacturers for installing HSRPs on 4-wheelers and Rs 517 for 2-wheelers. However, documents show that the HSRP manufacturers supply these number plates to the vehicle manufacturers for their new vehicles for Rs. 519.33 for 4-wheelers and Rs. 236 for 2-wheelers, respectively. Also, these products can be made available in the market at rates as low as Rs. 290 for two-wheelers and Rs. 520 for four-wheelers by the same HSRP manufacturers or the other manufacturers having approval of the Central Government.

Jithendra, in his petition, submitted that these four officials are duty-bound to ensure that around two crore owners of old vehicles in the state are provided with the HSRP at the lowest rates; instead, they are permitting some HSRP manufacturers to collect whatever price they want.

Due to the administrative action/inaction, the cartel, comprising certain HSRP manufacturers, vehicle manufacturers/dealers and the four officials, is obtaining illegal gain worth around Rs. 500 crore, which has caused undue harm and hardship to the owners of old vehicles, it stated.

Central Motor Vehicles Rules do not permit OEMs and their dealers to affix HSRP outside the premises of dealership. However, these officials have permitted the HSRP manufacturers to carry out the fitment outside the premises of the dealers of vehicle manufacturers, which is prohibited for security reasons. They have also allowed certain HSRP manufacturers to collect any amount from the owners of old vehicles through the portal which is linked by the Transport Department, thereby causing illegal gain to the cartel and undue hardship to the owners of old vehicles that comes around a minimum of Rs. 200 crore.

The petition further submitted that on December 1, 2023, four certified HSRP manufacturers quoted prices which were much lesser than the bill rates between the HSRP manufacturer and the vehicle manufacturer. After knowing the fact that the product can be supplied at considerably lesser price, the officials permitted some HSRP vendors to collect exorbitant amounts, ‘leading to a corruption of more than Rs. 700 crores.

The petition also alleged that the officials as public servants to stand for benefiting public have abused their position by compelling around two crore owners of old vehicles to purchase HSRP at exorbitant rates, so as to facilitate organized looting of public money by a small cartel.