Judgement Writing

- Mohit Bajaj, Modern Law College

- Edited by Sonia Sandbhor

In the Supreme Court of India

Criminal Appellate Jurisdiction

SKODA AUTO VOLKSWAGEN

INDIA PRIVATE LIMITED ….PETITIONER(S)

VERSUS

THE STATE OF UTTAR PRADESH & ORS ….RESPONDENT(S)[1]

Introduction:

India is the land of people, with a population of almost 140 crores which is 17% of the world population and with all this population comes pollution and India isn't lacking behind in that also and has 3 spots in the 10 most polluted cities in the world. So when it comes to pollution India is trying to take measures to control this pollution in these top polluted cities, with odd-even rule in Delhi, or plant more trees in cities, to deal with the pollution created by factories etc. Indian government is trying to reduce the harm done to nature so that the living conditions and the air that we breathe don’t get any worse. And one such example of pollution created was by the biggest automobile manufacturers in the world which went by the name of Volkswagen Auto, Skoda Auto Limited which were charged with planting defeat devices in their vehicles and trying to hide the pollution that was being created by the cars manufactured by the company.

Studying the case:

Petitioner was the company whose headquarters was in Pune and engaged in the business of manufacturing, import and sales 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 of Sales India Private Limited and claims are responsible for operations of five automobile brands namely Volkswagen, Skoda, Audi, Porsche, and Lamborghini.

The automotive research association of India which is the authority for heavy industries and public enterprises 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 asking them as to why they should not come to a conclusion that the automobiles manufactured and sold by them in India violate central motor vehicles rules. It was told in the said notice that the test carried out by them on limited vehicles fitted with diesel EA189 engines led them to believe that the vehicles manufactured by Volkswagen, when tested on the road emitted 3-9 times more NOx pollution in comparison to the tests that were done in the laboratory of Modified Indian Driving Cycle (MIDC). In the notice, they also said that the diesel EA189 engines fitted in BS-IV vehicles were fitted with 'defeat devices'.

During this period two more applications were filed against Skoda auto India private limited and Volkswagen India private limited, and Volkswagen group of sales India private limited in the National Green Tribunal (NGT) and apart from these three companies union of India and Central Pollution Control Board were also made parties to the applications.

Later in 2018, the NGT ordered an investigation by a team to confirm the claim by the company that they didn't do any damage to the environment and also directed these companies to give 100 crores to CPCB.

The company then filed a civil appeal in Supreme Court stating that the findings and orders given by NGT were to be quashed as the report filed by the expert team was during the pendency of the appeals in front of NGT.

The company had already been involved in the case of "Diesel gate."[2] Since 2015 where they lost the class action suit and had to give a compensation of €830m (£743m) involving 230,000 German car owners. It was a benchmark case for 60,000 other cases in Germany.

Pursuant to the said orders of the court, NGT allowed the manufacturers to file objections and heard the original case and disposed of the objections with the findings that the cars emitted more NOx than the limit and were liable to pay 500 crores as damages.

The company had installed defeat devices that made it look like they emitted less NOx in the tests but were actually harming the environment severely and were responsible for the damages done to the environment. No coercive steps were to be taken against the manufacturers as they had a case already going on in the Supreme Court and 2 more civil appeals were filed challenging the decision of the NGT.

Another case was filed in the state of Uttar Pradesh by the respondent stating that he had bought 7 Audi cars from the manufacturer asking them specifically whether any defeat devices were installed in the cars. The company denied the fact and sold 7 cars to the respondents which were later found to be having the defeat devices in the car.

The complainant came to know that he was duped and the company had prepared fake records and documents. They were fully aware of the cheat devices and the manufacturers and the officers were guilty of various offences under IPC and that therefore action should be initiated against them.

The company in defense said that the petitioner according to the government record had bought only 3 and not 7 vehicles and had filed the FIR 2 ½ years later looking at the report given by NGT and hence the FIR should be quashed

The high court denied the request of quashing the FIR and hence the company took the case forward to the supreme court stating that the police can't investigate a case that's already going on in the supreme court and were waiting for a verdict and the high court didn't take a note of the delay in the filing of cases and that the petitioner had purchased 3 not 7 vehicles.

Issue:

The quashing of the FIR based on mere facts that he had purchased 3 and not 7 vehicles could not be taken as consideration without any trial or investigation, and the delay in the filing of case cannot be a sole ground for quashing of the FIR. Hence, NGT directed CPCB to initiate the prosecution in the light of the applicable regime and directed the manufacturers to deposit 500 crores for damages caused to the environment.

The cases that were being filed based on the order by NGT could not be quashed but could not also be forced on the manufacturer as they were already facing charges in front of the Supreme Court and NGT and for which they were already directed to pay damages. The cases could've been filed if the customers actually had suffered.

Judgment:

The Supreme Court in the civil appeals of the company gave an order that they leave it to the CPCB to investigate under the light of the regime and that no coercive steps were to be taken against the manufacturers till the litigation was going on with the CPCB.

Learned senior counsel A.M Singhvi said that the case filed in Allahabad high court was nothing but the reproduction of contention of the order given by NGT and that the same case substratum was being litigated by CPCB.

The question here was whether the cases filed by the customers were to be quashed or were they to be taken into consideration and litigated along with the case in CPCB. At this point, it was seen that the company could take either the defense of fact which was that they had not installed any such cheat devices made it a pure question of fact or else other defense could be of the law that even though a device was installed in the car but according to the guidelines given by the government was not a defeat device and was actually which was required to be installed in the car for start or ignition of the car in which case it came to be a question of law that whether such device fell under the category of defeat device or not.

The case of diesel gate was also considered where the company had to recall cars and pay 80 billion Euros as fine to the German government for the damages done to the environment. And the German federal court gave the decision in favor of the car owners where they stated that the pollution was also causing diseases like cancer and other problems among the people and the companies defeat devices and the pollution emitted by the cars was responsible for it. Aftermath of the diesel gate scandal the cases in India and USA were a response to it as everyone around the countries started to file cases against the company and asking them for damages. Therefore it could not be agreed that the cases to be quashed just because the same subject was being considered by the NGT and the Supreme Court.

As in the case of "Haryana vs. Bhajanlal."[3] it was stated that the power of quashing should be used very sparingly and in the rarest of the rare cases. While examining a complaint, the court cannot quash the FIR filed upon the same particulars just based on that the case is under trial

And in the case of "S.M Datta vs. the state of Gujarat."[4] it was clearly stated that courts could not interfere in a case at its initial stage or interfere in the investigation of the police unless in the rarity of cases quashing of the report can be done. Since the two organs i.e. courts and the police work separately, the interference cannot be done just based on the mere defense of trial already being held in front of the court.

Hence it was ordered that no such case would be quashed by the courts which are filed with the police and the courts won't interfere till the matter is brought to them. The decision that was given by the German courts keeping in mind that the company had to pay damages to the government and also pay compensation and recall the cars and remove the defeat devices from the cars and reduce the emission of NOx was ordered, and company since being originated from Germany couldn't be told not to continue business any further. Still, such steps could have been taken into consideration in India as the company despite being on trial in other countries still continued to produce cars with defeat devices and had done damage to the environment in general and might also have caused damage to the health of people where India also and so the damages of 500 crores was a mild punishment as compared to what other countries ordered to the automobile manufacturer.

[3] https://www.scconline.com/blog/post/2020/11/27/no-relief-to-skoda-volkswagen-as-sc-refuses-to-quash-fir-over-alleged-use-of-cheat-devices/

[4] https://indiankanoon.org/doc/1960340/

[2] https://auto.hindustantimes.com/auto/news/dieselgate-scandal-volkswagen-has-to-pay-damages-rules-court-41590399924686.html

[1] https://www.advocatekhoj.com/library/judgments/announcement.php?WID=13293

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