No coercive action for now against Volkswagen on NGT fine, rules SC

A car with the Volkswagen VW logo badge is seen on display at the North American International Auto Show in Detroit, Michigan, US | Photo: Reuters
The Supreme Court on Monday said no coercive action would be taken in the interim against German automobile major Volkswagen for not depositing the Rs 500-crore fine imposed on its by the National Green Tribunal. The NGT had imposed a fine of Rs 500 crore on the carmaker for damaging the environment through the use of “cheat devices” in its diesel cars in India. 

A two-judge Bench of Justice S A Bobde and Justice S Abdul Nazeer passed the order. 

A cheat device is a software that allows car manufacturers to manipulate emission tests by altering the performance of its engines.

Volkswagen India had approached the top court with a plea that the NGT had imposed the fine without considering the company’s stand. The carmaker contends that the test results of its diesel cars were based on “on-road testing” conditions for which there were no prescribed standards in India. The NGT had, however, said that the fine was being imposed taking sustainable development as the main factor. On March 7, the NGT had fined Volkswagen India Rs 500 crore for presence of cheat devices in their diesel cars plying in India. The automobile giant had been asked to deposit the sum with the Central Pollution Control Board (CPCB) within two months. The money, the NGT had said, could be used by the CPCB to improve the air quality in and around the National Capital Region.

“Sustainable development is the main guiding factor. We are unable to accept the manufacturer’s objections to the report,” a Bench headed by Justice Adarsh Goel had said then.

On January 17, the NGT had asked Volkswagen to deposit Rs 100 crore within 24 hours or it would order the arrest of the carmaker’s country managing director and seizure of its properties in India. This came after the firm had failed to deposit the amount despite a November 16 order by the NGT asking it to do so.

The NGT had set up a four-member panel comprising members from the CPCB, the Ministry of Heavy Industries, the Automotive Research Association of India, and the National Environmental Engineering Research Institute to determine a fair estimate of the damage caused to the environment by the Volkswagen diesel cars. The panel in its report said Volkswagen should pay at least Rs 171.34 crore as a “conservative” fine for the damage.