No Acts & Articles mentioned in this case
REPORTABLE
IN THE SUPEME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CRIMINAL) NO.4931 OF 2020
SKODA AUTO VOLKSWAGEN
INDIA PRIVATE LIMITED … PETITIONER(S)
VERSUS
THE STATE OF UTTAR PRADESH & ORS. …RESPONDENT(S)
J U D G M E N T
V. Ramasubramanian, J.
1.Aggrieved by the refusal of the High Court to quash a First
Information Report (FIR for short) registered against them for the
offences punishable under Sections 34, 471, 468, 467, 420, 419
and 406 IPC, the petitioner has come up with the above Special
Leave Petition.
2.We have heard Dr. Abhishek Manu Singhvi, learned senior
counsel appearing for the petitioner. Mr. Maninder Singh, learned
senior counsel appears for the 3
rd
Respondent, who is the de facto
complainant.
1
3.The petitioner is a Company headquartered in Pune and is
engaged in the business of manufacture, import and sale of
passenger vehicles in India. It is claimed that the petitioner has
been formed by the amalgamation of three Companies by name
Skoda Auto India Private Limited, Volkswagen India Private Limited
and Volkswagen Group Sales India Private Limited. The petitioner
claims that they are responsible for the business operations of five
automobile brands namely, Skoda, Volkswagen, Audi, Porsche and
Lamborgini.
4.The Automotive Research Association of India, which is a
research institution of the automotive industry attached to the
Ministry of Heavy Industries and Public Enterprises of the
Government of India issued a notice dated 04.11.2015 to the
Managing Directors of Skoda Auto India Private Limited,
Volkswagen India Private Limited and Volkswagen Group Sales
India Private Limited, calling upon them to show cause as to why
they should not come to the conclusion that the vehicles
manufactured and sold by them in India, are in violation of the
requirements of the Central Motor Vehicles Rules. It was alleged in
2
the said notice that the study carried out by them on limited vehicle
models fitted with Diesel EA 189 Engines led them to believe that
the vehicles manufactured by Volkswagen, when tested on road,
indicate 39 times more NO x pollution compared with the tests
carried out in the laboratory on Modified Indian Driving Cycle
(MIDC). It was also alleged in the said notice that they had reason
to believe that Diesel EA 189 Engines fitted in BSIV vehicles are
equipped with what are called ‘defeat devices’.
5.At about the same time, two original applications came to be
filed before the National Green Tribunal (NGT for short), Principal
Bench. Both the applications were primarily against Skoda Auto
India Private Limited, Volkswagen India Private Limited and
Volkswagen Group Sales India Private Limited. Apart from these
three companies, the Union of India (UOI), the Central Pollution
Control Board (CPCB) and a few others were also made parties to
the original applications.
6.The particulars of these original applications are presented in
a tabular column for easy appreciation:
3
O.A.No. Name of the
applicant/applicants
Names of Respondents Reliefs sought
509 /2015 SaloniAilawadi 1. Union of India
through its Secretary,
Ministry of Heavy
Industries & Public
Enterprises.
2.Ministry of
Environment, Forest
and Climate Change,
Through Secretary
3.Central Pollution
Control Board, Through
its Chairman
4. Volkswagen India Pvt;
Ltd., Through its
Managing Director
5.Skoda Auto India
Private Limited, Through
its Managing Director
6. Volkswagen Group
Sales India Private
Limited, Through its
Managing Director
7. Volkswagen AG,
Through Chairman of
the Board of
Management
1. Directing
Respondents 13 to
disallow the
manufacturing,
assembly and sale of
the vehicles of
Respondents 46 in
India till it is
established that they
are not employing any
deceit devices or
technology;
2. To direct the
Respondents 13 to
inspect and check all
the vehicles
manufactured and sold
in India to ensure that
no deceit devices are
used;
3.To direct respondents
47 to stop production,
assembly and sale of
those vehicles; and
4. To direct respondents
47 to rectify the
engines of vehicles
already sold in India at
their cost.
527/20151. Mr. Satvinder
Singh Sodhi
2. Mr. Vellore
Ramesh Neelakantan
3. Mr. Deepit
Singh
1.Volkswagen India
Private Limited,
Maharashtra
2.Volkswagen Group
Sales India Private
Limited, Maharashtra
1.To restrain
Respondents 16 from
selling any further
automobile with the
defeat device which
violated the applicable
emission norms;
4
4. Sara
International Limited
3.Volkswagen AG,
Germany
4.Skoda Auto India
Limited, Maharashtra
5.Skoda Auto AS, Czech
Republic
6.Dr.Ing. h.e.F.Porsche
AG, Germany
7.Central Pollution
Control Board, Delhi.
8.Automotive Research
Association of India,
Pune
9.Union of India
Through Ministry of
Heavy Industries and
Public Enterprises,
New Delhi
10.Government of
National Capital
Territory of India,
Through Delhi
Pollution Control
Committee, Delhi
2. To direct
Respondents 106 to
disgorge all the profits
made by selling
automobiles with
cheat devices from the
year 2008; and
3. To direct
Respondents 16 to
pay damages for
restoration of
environment.
7.On 16.11.2018, the NGT recorded a prima facie finding that
the claim of the manufacturers that they had not caused any
damage to the environment, was not acceptable. The Tribunal
constituted a joint team to give an expert opinion and in the mean
5
time directed the manufacturers to deposit Rs. 100 crores with the
CPCB.
8.The manufacturers filed appeals before this Court in C.A. Nos.
11928 and 11929 of 2018, against the preliminary finding and the
interim direction issued by the NGT. During the pendency of those
appeals, the Expert Team filed a Report.
9.Therefore, this Court disposed of the aforesaid Civil Appeals
giving liberty to the manufacturers to file objections to the Report of
the Expert Team and directed the Tribunal to consider those
objections and to pass orders.
10.Pursuant to the said order of this Court, the NGT allowed the
manufacturers to file objections and heard both the original
applications and disposed of the same by order dated 07.03.2019.
Some of the findings and directions by the Tribunal were:
(i)That the manufacturers had in fact used cheat
devices to suppress the laboratory tests;
(ii)That NOx emission was higher by Portable Emission
Measurement System (PEMS);
(iii)That Volkswagen vehicles gave much less NOx
emission under the Warm Test Cycles after recall;
6
(iv)That the emissions measured on PEMS were higher
than BSIV limit;
(v)That the manufacturers are liable to pay damages to
the tune of Rs.500 crores; and
(vi)That the CPCB shall consider initiation of
prosecution in the light of applicable statutory
regime.
11.Challenging the said order dated 07.03.2019 of the NGT, two
Civil Appeals were filed in C.A.Nos. 4069 and 4086 of 2019. On
06.05.2019 these appeals were taken up along with another Civil
Appeal filed by the InterContinental Association of lawyers and this
court ordered the issue of notice in the appeals. In the mean time,
this Court directed that no coercive steps shall be taken against
Volkswagen India Private Limited.
12.While things stand thus, the 3
rd
Respondent herein lodged a
complaint with the S.H.O., Gautam Budh Nagar, on 10.07.2020,
alleging that he had bought 7 Audi Brand cars from the authorised
dealers of the manufacturing Companies; that at the time of
purchase, he got it clarified from the Company that they had not
installed any cheat devices in the vehicles sold in India; that
however, the authorities in India found out a higher emission of
7
NOx; that even the NGT imposed a fine; that the complainant
thereafter realised that he had been duped by the Company; that
knowing fully well that their vehicles have been installed with cheat
devices, the manufacturer had prepared wrong records and
documents; that the manufacturers and the officers of the
manufacturers are therefore guilty of various offences under the IPC
and that therefore action should be initiated against them.
13.Contending that as per the particulars mentioned in the
VAHAN Portal of the Government, the 3
rd
Respondent herein had
purchased only 3 and not 7 vehicles; that the complaint lodged by
the 3
rd
Respondent after more than 2
½ years of the purchase of the
vehicles, was malicious and full of false particulars; and that the
FIR is based entirely upon the order of the NGT, which is the
subject matter of two civil appeals before this Court, the petitioner
filed a Criminal Miscellaneous Writ Petition No.9233 of 2020 before
the High Court of Judicature at Allahabad. In the said Writ Petition,
the petitioners sought quashing of the FIR.
14.By an order dated 01.10.2020, the Allahabad High Court
rejected the prayer for quashing of the FIR. However, the High
8
Court protected the officers of the petitioner against arrest till the
submission of the Report under Section 173(2) Cr.P.C. subject
however to the condition that they shall cooperate in the
investigation and also appear as and when called upon to assist in
the investigation.
15.Not satisfied with a mere protection against arrest and the
refusal of the Allahabad High Court to quash the FIR, the petitioner
has come up with the above SLP.
16.The main contentions of the petitioner are:
(i)That the Police cannot investigate an issue, the
substratum of which is sub judice before this Court
in the civil appeals arising out of the order of the
NGT; and
(ii)That the High Court failed to take note of the long
delay on the part of the 3
rd
Respondent in lodging
the complaint and also the fact that the VAHAN
Portal of the Government shows the purchase of
only 3 vehicles as against the claim of the 3
rd
Respondent to have purchased 7 vehicles.
17.Let us take up the second contention first, since it is capable
of being dealt with, without much ado. The second contention has
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two parts namely (i) that there is a long delay in lodging the
complaint and (ii) that the 3
rd
Respondentcomplainant, appears to
have purchased only 3 vehicles as against his claim to have
purchased 7 vehicles.
18.The question whether the 3
rd
Respondentcomplainant
purchased 3 vehicles as revealed by the VAHAN Portal of the
Government or 7 vehicles as claimed by him in his complaint, is a
question of fact which has to be established only in the course of
investigation/trial. In a petition for quashing the FIR, the Court
cannot go into disputed questions of fact.
19.The mere delay on the part of the 3
rd
Respondentcomplainant
in lodging the complaint, cannot by itself be a ground to quash the
FIR. The law is too well settled on this aspect to warrant any
reference to precedents. Therefore, the second ground on which the
petitioner seeks to quash the FIR cannot be countenanced.
20.The first contention revolves around the pendency of the Civil
Appeals arising out of the order of the NGT and the interim order
passed by this Court in the Civil Appeals.
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21.As stated earlier, two original applications came to be filed
before the NGT in the year 2015, alleging that the manufacturers of
the vehicles in question were employing deceit devices. The filing of
the original applications coincided with the issue of notice by the
Automotive Research Association of India to the manufacturers.
We have already indicated broadly, in paragraphs 510 above as to
what transpired before the NGT.
22.The applicants before the NGT did not seek any relief for
themselves, as purchasers of vehicles. The reliefs sought by the
applicants before the NGT were broad and general. This is why the
NGT, by its final order dated 07.03.2019 directed only the CPCB to
consider the initiation of prosecution in the light of the applicable
statutory regime, while ordering the manufacturers to deposit
Rs.500 crores as compensation for the damage caused to the
environment.
23.Therefore, the order of the NGT, passed on the applications
filed by certain individuals not claiming as purchasers of vehicles,
cannot be taken as an impediment for an individual who
purchased cars from the manufacturers, to lodge a complaint, if he
11
has actually suffered on account of any representation made by the
manufacturers.
24.The interim order passed by this Court on 06.05.2019 in Civil
Appeal Nos. 4069 and 4086 of 2019, while issuing notice reads as
follows:
“In the meantime, no coercive steps shall be taken
against the appellant viz., Volkswagen India Private
Limited.”
25.The aforesaid interim order correlates only to the directions
issued by the NGT in paragraphs 29, 30 and 32 of its order dated
07.03.2019. The direction contained in Paragraph 30 of the order of
the NGT dated 07.03.2019 reads as follows:
“We leave it open to the CPCB to consider initiation of
prosecution in the light of applicable statutory regime.”
26.In paragraphs 29 and 32 of its order, the NGT directed the
manufacturers to deposit compensation to the tune of Rs.500
crores within 2 months.
27.Therefore, the interim order passed by this Court not to take
any coercive steps has to be understood only in the context of the
aforesaid directions of the NGT which became the subject matter of
the Civil Appeals. Hence it is futile to contend that the pendency of
the Civil Appeals and the interim order passed by this Court should
12
be taken as a deterrent for anyone else to lodge a police complaint
and seek an investigation.
28.Dr. A.M. Singhvi, learned senior counsel appearing for the
petitioner strenuously contended that the contents of the complaint
lodged by the 3
rd
Respondentcomplainant with the Police were
nothing but a reproduction of the contentions made before the NGT
and that actually the substratum of the police complaint, is what is
sub judice before this court. Therefore, he contends that the police
cannot investigate into the same set of allegations which form the
subject matter of proceedings pending adjudication before this
court.
29.But we do not think so. A little elaboration is required to show
why we cannot agree with the above contention of the learned
senior counsel appearing for the petitioner.
30.Section 110(1) of the Motor Vehicles Act, 1988 empowers the
Central Government to make rules, regulating the construction,
equipment and maintenance of motor vehicles with respect to all or
any of the matters enumerated in Clauses (a) to (p). Clause (g) of
13
Subsection (1) of Section 110 relates to “the emission of smoke,
visible vapour, sparks, ashes, grit, or oil”.
31.In exercise of powers conferred by Section 110(1), the Central
Government issued a set of rules known as The Central Motor
Vehicles Rules, 1989.
32.Rules 112 to 114 of those Rules deal in general with “smoke,
vapour, spark, ashes, grit and oil”. Rules 115 and 116 deal
specifically with “emissions of smoke, vapour” etc., from motor
vehicles and “test for smoke emission level and Carbon Monoxide
(CO) level for motor vehicles”. These Rules correspond to Clause (g)
of Subsection (1) of Section 110.
33.Rule 126 mandates every manufacturer or importer of motor
vehicles other than trailers and semitrailers to submit the
prototype of the vehicle manufactured or imported by him for
testing by the agencies indicated therein. Rule 126A enables the
testing agencies referred to in Rule 126 to conduct tests on the
vehicles drawn from the production line of the manufacturer to
verify whether these vehicles conform to the provisions of the Rules.
14
34.In order to give effect to the mandate of the statutory
prescription, the Ministry of Road Transport and Highways, issued
a document bearing No. MoRTH/CMV/TAP116116, Issue No.4,
which prescribes the test method, testing equipment and other
related procedure for the purpose of testing vehicles for verifying
compliance with Rules 115 and 126A of the Rules for “Type
Approval and Conformity of Production”. The document also
contains the total procedure for checking of the inservice vehicles
for idling CO/HC for vehicles fitted with petrol/CNG/LPG Engines.
This document is divided into 15 parts. PartXIV contains the
details of standards for Tailpipe Emissions from vehicles and Test
Procedures Effective for Mass Emission Standards.
35.Clause No.2.27 of Chapter1, PartXIV of the aforesaid
document defines what is called a “Defeat Device” . It reads as
follows:
“Defeat Device means any element of design which
senses temperature, vehicle speed, engine rotational
speed, transmission gear, manifold vacuum or any
other parameter for the purpose of activating,
modelling, delaying or deactivating the operation of
any part of the emission control system, that
reduces the effectiveness of the emission control
15
system under conditions which may reasonably be
expected to be encountered in normal vehicle
operation and use. Such an element of design may not
be considered a defeat device if
1. The need of the device is justified in terms of protecting
the engine against damage or accident and for safe
operation of the vehicle, or
2. The device does not function beyond the requirements
of engine starting or,
3. Conditions are substantially included in the Type I or
Type VI test procedure.”
36. The allegations in the complaint lodged by the 3
rd
respondent
herein, are to the following effect:
(i) that “at the time of purchase and taking delivery of the vehicles,
the complainant got clarified from the accused persons whether the
vehicles in India were also fitted with cheat devices”;
(ii) that despite the clarification issued by them that they had not
installed any cheat devices, in the vehicles meant to be sold in
India, the cars purchased by the complainant were found to contain
such defeat devices; and
(iii) that therefore, the manufacturer is guilty of commission of
various offences.
37.The question whether such devices are installed in the cars
purchased by the 3
rd
respondent herein and the question whether
16
there was any representation in this regard to the petitioner, are all
questions of fact, peculiar and particular to the 3
rd
respondent
herein. NGT had no occasion to examine the cars purchased by the
3
rd
respondent herein. At this stage no one can presume whether
the defence of the manufacturer to the police complaint will be
purely on a question of fact or purely on a question of law or on
mixed questions of fact and law. If the petitioner takes a defence
that no such devices were installed in the cars purchased by the 3
rd
respondent or that there was no (mis)representation in this regard,
it will be a pure question of fact, which cannot be gone into in a
quash petition. If the petitioner takes a defence that the installation
of such devices, though true, does not violate any law, then it will
be a pure question of law. We may be entitled to go into this
question in a quash petition, provided the petitioner comes up with
a categorical admission that they had installed such devices and yet
there was no violation of the law. We do not expect the petitioner to
disclose their defence at this stage nor would we speculate what
type of defence the petitioner would have to the prosecution.
17
38.It may not be out of context to mention here that the
European Union woke up way back in 2007 to the reality of car
makers installing a software that manipulate exhaust emissions,
depending upon whether the car ran on a test stand or on the road.
After the European Commission’s Joint Research Centre found in
2011 that the levels of harmful NO x emissions far exceeded the
prescribed levels, a study conducted by the International Council
on Clean Transportation (ICCT) revealed similar results in the
United States. In September2015, allegations of installation of
manipulation devices by car manufacturers emerged from the US
Environmental Protection Agency and this triggered investigations
in several European Union States. After claims were lodged and
legal action initiated, the German Federal Motor Transport
Authority appears to have given permission in June2016 for the
recall of about 2 million vehicles across Europe. In the light of these
developments, one of the manufacturers entered into an agreement
with the US Environmental Protection Agency in December2016
giving certain options to the customers. These and the subsequent
developments, which attained notoriety as the dieselgate
18
scandal, led to the German Federal Court of Justice
(BundesgerichtshofBGH) giving a ruling on May 25, 2020 in favour
of the car owners for damages.
39.It is in the backdrop of what transpired in Europe and U.S.A.,
during the period from 2015 to 2019 that the action initiated by the
Automotive Research Association of India in November 2015 and
the proceedings that went on before the National Green Tribunal
from the year 2015 to the year 2019, have to be seen. All of them
were part of the global outrage that actually concerned the damage
caused to the environment by the emissions from the cars allegedly
fitted with manipulative devices. The proceedings before the NGT
were not intended to address issues relating to individuals, such as
(i) whether any emissions manipulation software, called in common
parlance as ‘defeat devices’ were installed in the vehicles purchased
by certain individuals; and (ii) whether any representation was
made to the purchasers of the cars in which such devices had been
installed, about the emission efficiency level of the cars.
40.Therefore, we are unable to agree with the contention of the
learned Senior Counsel for the petitioner that the substratum of the
19
police complaint is something that is already the subject matter of
adjudication before this Court in the appeals arising out of the
order of the NGT. As a matter of fact, the High Court has been fair
to the petitioner, by granting protection against arrest till the filing
of the report under section 173(2) of the Code. We do not think that
the petitioner can ask for anything more.
41.It is needless to point out that ever since the decision of the Privy
Council in King Emperor vs. Khwaja Nazir Ahmed
1
, the law is well
settled that Courts would not thwart any investigation. It is only in
cases where no cognizable offence or offence of any kind is disclosed
in the first information report that the Court will not permit an
investigation to go on. As cautioned by this Court in State of
Haryana vs. Bhajan Lal
2
, the power of quashing should be exercised
very sparingly and with circumspection and that too in the rarest of
rare cases. While examining a complaint, the quashing of which is
sought, the Court cannot embark upon an enquiry as to the reliability
or genuineness or otherwise of the allegations made in the FIR or in
the complaint. In S.M. Datta vs. State of Gujarat
3
, this Court again
1 AIR 1945 PC 18
2 (1992) Supp. (1) SCC 335
3 (2001) 7 SCC 659
20
cautioned that criminal proceedings ought not to be scuttled at the
initial stage. Quashing of a complaint should rather be an exception
and a rarity than an ordinary rule. In S.M. Datta (supra), this Court
held that if a perusal of the first information report leads to disclosure
of an offence even broadly, law courts are barred from usurping the
jurisdiction of the police, since the two organs of the State operate in
two specific spheres of activities and one ought not to tread over the
other sphere.
42. In view of what is stated above, the special leave petition is
dismissed. There will be no order as to costs.
……………………………..CJI
(S.A. BOBDE)
……………………………….J.
(A.S. BOPANNA)
………………………………..J.
(V. RAMASUBRAMANIAN)
New Delhi
November 26, 2020
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