EXCLUSIVE : Multi-crore vehicle scrapping scam in Delhi: Govt agencies, scrappers under lens

A massive multi-crore scam has surfaced in the disposal of end-of-life vehicles (ELVs) in Delhi, raising suspicion of deep-rooted collusion between enforcement agencies and registered vehicle scrapping facilities (RVSFs). The scandal, involving forged certificates, irregular disposal of impounded vehicles, and violations of government guidelines, has allegedly caused huge losses to the public exchequer.

The controversy arises from the Delhi government’s policy framed on February 20, 2024, to enforce Supreme Court directions mandating scrapping of diesel vehicles over 10 years old and petrol vehicles over 15 years. The guidelines laid down clear provisions: Equitable distribution of scrapping across empanelled RVSFs, transparent processes through an online portal, and mandatory deposit of unclaimed scrap value into government accounts. Further, a Gazette Notification issued on October 18, 2024 categorically barred incentives on Certificates of Deposit (CoD) for government-seized vehicles and prohibited their trading.

Forged Certificates, Public Money Misused

Investigations reveal that several RVSFs, in connivance with enforcement officials, issued forged Certificates of Deposit against impounded vehicles — a direct violation of the notification. CoDs are meant only for vehicle owners who voluntarily scrap their vehicles, entitling them to incentives of up to several lakhs when purchasing new vehicles. By illegally issuing CoDs on seized vehicles, scrapping companies siphoned off public funds, with the Ministry of Road Transport having earmarked `2,000 crore for scrapping incentives. Examples include vehicles DL13SF3381 and DL4C ND7585, where companies Seven Star Auto Scrapping India Pvt. Ltd. and Saga Tech Solution Pvt. Ltd. issued illegal CoDs despite clear prohibitions. Certificates were also found to be issued on company letterheads without digital signatures, unlike the ministry-issued documents, but still accepted by enforcement bodies.

Traffic Police Handovers without Auction

Equally alarming is the disposal of thousands of impounded vehicles lying in Delhi Traffic Police yards. Instead of auctioning them or recovering dues, vehicles were handed over directly to RVSFs, bypassing legal processes. Officials are accused of deliberately omitting serial numbers on seizure memos and challans, raising suspicions of systematic corruption.

Unpaid Scrap Value, Records Missing

Clause 10(iii) of the scrapping policy requires RVSFs to deposit scrap proceeds into government accounts if not claimed within 15 days. Yet, several companies defaulted on payments, with show-cause notices — such as one to Select Technical Services — ignored without recovery action. Shockingly, police themselves admitted in a March 10, 2025, order that they had no record of how many vehicles were handed over for scrapping, later demanding lists from the scrappers.

Pick-and-Choose Bans, Security Breaches
The scam also exposes selective penal action. Mahindra MSTS Recycling Pvt. Ltd. was blacklisted for one violation, while Go Green ELV Handlers, caught scrapping a case property vehicle under the Explosives Act, continued business unhindered. Companies run by the same family, even after being caught with stolen vehicles, were allowed to re-enter through new entities.

Adding to the irregularities, over 10,900 e-rickshaws — not covered under Supreme Court directives — were scrapped, depriving poor owners of their livelihoods. Fake identity cards bearing Delhi Police and MCD logos were also issued by scrapping companies to employees.

Call for CBI Probe

The sheer scale of violations — forged certificates, non-recovery of dues, fake challans, irregular disposal, and misuse of incentives — points to a systemic nexus between enforcement agencies and scrapping firms. Experts and whistleblowers are demanding a Central Bureau of Investigation probe to uncover how many vehicles were wrongly scrapped, how much public money was siphoned off, and which officials benefited. This alleged scam, operating under the guise of environmental compliance,has turned a green initiative into a cash cow for select companies and corrupt officials, raising urgent questions about accountability and governance in Delhi.