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NGT fines Volkswagen Rs 500 crore for using cheat devices in diesel cars

Volkswagen has argued that the emission test results in question were based on "on road testing" of its cars and there were no prescribed standards for this.

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NGT fines Volkswagen Rs 500 crore for using cheat devices in diesel cars

The National Green Tribunal has slapped a penalty of Rs 500 crore on Volkswagen for using "cheat device" in its diesel cars in India. Earlier, a panel formed by the NGT had recommended a fine of Rs 171.34 crore over the damage emissions from Volkswagen cars had done. Declaring the judgement on Thursday, a bench headed by NGT Chairman Justice Adarsh Kumar Goel instructed the German auto manufacturer to deposit the amount within two months. Volkswagen will reportedly challenge the NGT order before the Supreme Court.

Meanwhile, Volkswagen refuted the allegations of violating BS-IV norms levelled against it. The company argued that the emission test results in question were based on "on road testing" of its cars and there were no prescribed standards for this.

"The Volkswagen Group in India reiterates that all cars from the Group are compliant with the emission norms defined in India. The Group awaits the copy of the order of Honourable NGT. The Volkswagen Group will challenge the order of the Honourable NGT before the Honourable Supreme Court," Volkswagen India said in a statement.

The NGT bench, however, turned down Volkswagen's objection, stating that sustainable development is the main guiding factor, and thus, the manufacturer's objections to the report can be admitted. The green tribunal said that it may consider utilising the money towards improving air quality in the Delhi NCR region and other highly polluted areas of the country.

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The tribunal is hearing pleas filed against Volkswagen vehicles in 2015 for alleged violation of emission norms in the wake of the Dieselgate scandal in the US. Volkswagen had admitted to installing a "defeat device" in 11 million diesel engine cars sold in the US, Europe and other global markets. A "cheat" or "defeat device" is a software in diesel engines to manipulate emission tests by changing the performance of the cars.

In its tests conducted on some Volkswagen models, Pune-based Automotive Research Association of India (ARAI) found that their on-road emissions were 1.1 times to 2.6 times higher than the permissible levels under BS-IV norms. Following this, Volkswagen India had recalled around 3.23 lakh vehicles fitted with EA 189 diesel engines which were in alleged violation of emission norms to rejig the software. The company, however, had said that the recall in India was purely voluntary in nature as it did not face any charges regarding violating emission norms in India unlike in the US.

On November 16 last year, the tribunal had said that the use of 'cheat device' by Volkswagen in diesel cars in India led to inference of environmental damage and had asked the German auto major to deposit an interim amount of Rs 100 crore with the Central Pollution Control Board (CPCB).

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A four-member committee was also formed to look into whether Volkswagen had exceeded the prescribed environmental norms. The panel comprised ARAI director Rashmi Urdhwareshe, Dr Nitin Labhsetwar, chief scientist of CSIR-NEERI, Ramakant Singh director, Ministry of Heavy Industries, and Prashant Gargava, member secretary of CPCB. This quartet estimated that in 2016 Volkswagen cars had released approximately 48.678 tonnes of nitrogen oxide (NOx) - a smog-forming pollutant linked to heart and lung disease - in the national capital.

The panel has recommended a fine of Rs 171.34 crore on the auto company. "The value may be considered conservative due to lack of methodologies for calculating the overall impact of NOx on environment in India and hence only health damages are valued," the committee added in its report. The penalty was determined on the basis of the 3.27 lakh Volkswagen cars in India that had deceit software installed.

Significantly, the Motor Vehicle Amendment Bill, 2017, pending in the Parliament for over two years, reportedly includes a provision for mandatory recall of defective vehicles by the manufacturer, along with a provision for penalising manufacturers for vehicles that fail to meet standards.

(Edited by Vivek Punj with PTI inputs)

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