2020 INSC 0585 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. 527/2015 1. 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 NO x   emission was higher by Portable Emission Measurement System (PEMS); (iii) That   Volkswagen   vehicles   gave   much   less   NO x 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 NO x ;   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 2½  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 9 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. 10 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 21