Quashing of a complaint should be an exception than an ordinary rule: Supreme Court

IN THE SUPEME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION SPECIAL LEAVE PETITIONNO.4931 OF 2020 SKODA AUTO VOLKSWAGEN INDIA PRIVATE LIMITED … PETITIONER(S THE STATE OF UTTAR PRADESH & ORS. …RESPONDENT(S JUDGMENT V. Ramasubramanian J Aggrieved by the refusal of the High Court to quash a First Information Reportregistered 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 2. We have heard Dr. Abhishek Manu Singhvi learned senior counsel appearing for the petitioner. Mr. Maninder Singh learned Signature Not Verified senior counsel appears for the 3rd Respondent who is the de facto Digitally signed by 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 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 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 3 9 times more NOx 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 BS IV vehicles are equipped with what are called ‘defeat devices’ At about the same time two original applications came to be filed before the National Green TribunalPrincipal 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 the Central Pollution Control Boardand a few others were also made parties to the original applications The particulars of these original applications are presented in a tabular column for easy appreciation: Name of the Names of Respondents Union of India through its Secretary Ministry of Heavy Industries & Public 2.Ministry of Environment Forest and Climate Change Control Board Through 4. Volkswagen India Pvt Through 5.Skoda Auto Private Limited Through its Managing Director 6. Volkswagen Group India Private Sales Limited Through its Volkswagen AG Through Chairman of 2. Volkswagen Group Sales India Private Limited Maharashtra Respondents 1 3 to assembly and sale of of Respondents 4 6 in India established that they are not employing any devices or To direct the Respondents 1 3 to inspect and check all manufactured and sold in India to ensure that no deceit devices are 3.To direct respondents 4 7 to stop production assembly and sale of those vehicles and 4. To direct respondents 4 7 to rectify the engines of vehicles already sold in India at Respondents 1 6 from selling any further automobile with the defeat device which violated the applicable emission norms Mr. Satvinder 1. Volkswagen Vellore Deepit Respondents 106 to disgorge all the profits made by selling with cheat devices from the year 2008 and Respondents 1 6 to pay damages 4. Skoda Auto India Limited Maharashtra 5. Skoda Auto AS Czech 6. Dr.Ing. h.e.F.Porsche AG Germany Control Board Delhi 8. Automotive Research Association of India 9. Union of Through Ministry of Heavy Industries and Public Enterprises of Territory of India Pollution Control Committee Delhi 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 time directed the manufacturers to deposit Rs. 100 crores with the The manufacturers filed appeals before this Court in C.A. Nos 11928 and 119218 against the preliminary finding and the interim direction issued by the NGT. During the pendency of those appeals the Expert Team filed a Report 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: That the manufacturers had in fact used cheat devices to suppress the laboratory tests That NOx emission was higher by Portable Emission Measurement Systemiii) That Volkswagen vehicles gave much less NOx emission under the Warm Test Cycles after recall That the emissions measured on PEMS were higher than BS IV limit 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 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 Inter Continental 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 3rd 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 NOx 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 3rd Respondent herein had purchased only 3 and not 7 vehicles that the complaint lodged by the 3rd 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.92320 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 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 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: 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 That the High Court failed to take note of the long delay on the part of the 3rd 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 3rd 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 two parts namely that there is a long delay in lodging the complaint andthat the 3rd Respondent complainant appears to have purchased only 3 vehicles as against his claim to have purchased 7 vehicles 18. The question whether the 3rd Respondent complainant 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 3rd Respondent complainant 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 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 5 10 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 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 has actually suffered on account of any representation made by the 24. The interim order passed by this Court on 06.05.2019 in Civil Appeal Nos. 4069 and 40819 while issuing notice reads as “In the meantime no coercive steps shall be taken against the appellant viz. Volkswagen India Private 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.” 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 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 3rd Respondent complainant 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 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 Clausestoof Sub sectionof Section 110 relates to “the emission of smoke visible vapour sparks ashes grit or oil” 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 Clauseof Section 110 33. Rule 126 mandates every manufacturer or importer of motor vehicles other than trailers and semi trailers 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 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 TAP 116 116 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 in service vehicles for idling CO HC for vehicles fitted with petrol CNG LPG Engines This document is divided into 15 parts. Part XIV contains the details of standards for Tailpipe Emissions from vehicles and Test Procedures Effective for Mass Emission Standards 35. Clause No.2.27 of Chapter 1 Part XIV of the aforesaid document defines what is called a “Defeat Device”. It reads as “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 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 3rd 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 various offences. iii) that therefore the manufacturer is guilty of commission of 37. The question whether such devices are installed in the cars purchased by the 3rd respondent herein and the question whether there was any representation in this regard to the petitioner are all questions of fact peculiar and particular to the 3rd respondent herein. NGT had no occasion to examine the cars purchased by the 3rd 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 norevealed similar results in the United States. In September 2015 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 June 2016 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 December 2016 giving certain options to the customers. These and the subsequent developments which attained notoriety as the diesel gate scandal led to the German Federal Court of Justice Bundesgerichtshof BGH) giving a ruling on May 25 2020 in favour of the car owners for damages 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 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 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. It is needless to point out that ever since the decision of the Privy Council in King Emperor vs. Khwaja Nazir Ahmed1 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 Lal2 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 Gujarat3 this Court again 1 AIR 1945 PC 18 2 Supp.SCC 335 3 7 SCC 659 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. Dattathis 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 42. In view of what is stated above the special leave petition is dismissed. There will be no order as to costs November 26 2020

Summary: 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.  It was held by the decision of the privy council in case of King Emperor vs. Khwaja Nazir Ahmed, AIR 1945 PC 18 was reiterated in the case of Skoda Auto Volkswagen India Private Limited vs The State of Uttar Pradesh &amp;ors., SLP (CRIMINAL) NO.4931 OF 2020 by the bench comprising of Chief Justice S.A.Bobde, Justice A.S. Bopanna and Justice V.Ramasubramanian. The facts of the case are, here the petitioner is a Companyheadquartered in Pune and is engaged   in   the   business   of   manufacture,   import   and   sale   of passenger vehicles in India. 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, as the vehicles manufactured by Volkswagen, when tested on road, indicate   3­9   times   more   NOx  pollution   compared   with   the   tests carried   out   in   the   laboratory. At about the same time, two original applications came to be filed before the National Green Tribunal,Principal Bench. 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 and was directed the manufacturers to deposit Rs. 100 crores with the CPCB. Later, one of the respondent 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. However, Court protected the officers of the petitioner against arrest till the submission   of   the   Report   under   Section   173(2)   Cr.P.C. Aggrieved by the refusal of the High Court to quash a First Information Report) 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. 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. 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 has actually suffered on account of any representation made by the manufacturers. Thus, the respondents can file a case. The Supreme Court while concluding on whether FIR can be quashed or not, it was held that, “In  State of  Haryana vs. Bhajan Lal,  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.”