'Matter Requires Investigation': Allahabad HC Refuses To Quash FIR Against Skoda Auto Volkswagen For Installing 'Cheat Devices' In Its Vehicles [Read Order]

The Bench of Justices B. Amit Sthalekar and Shekhar Kumar Yadav declined the company's plea while holding that whether or not the company's vehicles satisfy BS-IV norms is a matter of investigation.

The complainant (Respondent No. 3 herein), claiming to have purchased 7 Audi cars from the company, had lodged an FIR against it in Noida, for the offences of cheating, forgery and criminal breach of trust under Sections 34, 471, 468, 467, 420, 419 and 406 of IPC.

He submitted that at the time of purchase, the company had assured him that its vehicles meet all the prescribed standards in India and does not rely on any cheat devices. However, recently, he discovered that the company had in fact been using cheat devices to show lower emissions.

Reliance was placed on an order dated March 7, 2019, passed by the National Green Tribunal, imposing damages and enhanced amount of compensation amounting to Rs. 500 crores against the petitioner company on a finding that a 'cheat device' had been installed by the company during laboratory tests in its vehicles.

The Company on the other hand submitted that an appeal against the said order was preferred before the Supreme Court whereby it was granted interim protection from any "coercive steps" and therefore, registration of a FIR against it amounted to "malicious prosecution".

At this juncture, Additional Govt Advocate AN Mulla intervened to submit that in its 2019 order, the NGT had left it open for the CPCB to initiate prosecution against the Company, as per the prescribed statutory regime. He contended,

"Therefore, the order of the Supreme Court directing no coercive action would be confined to any action which may be contemplated by the CPCB which was a party before the Tribunal and would not operate as a blanket embargo against private individual/individuals who may have lodged FIR on allegation that they felt cheated by the faulty emission standards declared by the company which may later on have come to his/their knowledge that the same did not satisfy the BS-IV norms."

Senior Advocate Gopal Swarup Chaturvedi also told the Court that the Company had failed to satisfy the emission norms worldwide and an investigation is required to ascertain upto what extent these vehicles violate the BS-IC norms and whether the cause of faulty emission was a 'cheat device' or some other software chip or otherwise.

In view thereof the Court held,

"We have considered the submissions of the learned counsel for the parties and we are of the opinion that the question as to whether a 'cheat device' was installed in the vehicles purchased by the respondent no.3 and whether they satisfy the BS-IV norms or not, is a matter of investigation and the investigation cannot be interfered with by this Court on an erroneous interpretation of the interim order of the Supreme Court. The prayer for quashing the FIR is refused."

However, the Court has granted protection from arrest to the Petitioner's representative, till submission of the police report and subject to the restraint that he shall co-operate with the investigation and shall appear as and when called upon to assist in the investigation.

Case Title: Skoda Auto Volkswagen India Pvt. Ltd v. State of UP & Ors.

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