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New Delhi: German automobile major Volkswagen may face penal action for violating emission regulations, government today told the National Green Tribunal which asked the company not to sell any diesel vehicle in India fitted with "cheat device".

While the green panel sought an undertaking from the car -maker by January 11 that it would sell only those vehicles which comply with all emission norms as applicable, the Ministry of Heavy Industries said it was considering penal action against Volkswagen for flouting emission norms.

Cheat or defeat device is a software in diesel engines to manipulate emission tests by changing the performance of the vehicles to improve results.

Reacting to the NGT order, Volkswagen said in a statement later that its cars are not fitted with any "cheat device" and do not violate Bharat Stage IV (BS IV) emission norms.

An affidavit filed by Ministry of Heavy Industries before a bench of Justice U D Salvi said the ministry of "had directed Volkswagen to initiate vehicle recall in India. ...

Volkswagen had informed that they will be recalling all affected vehicles estimated number being 3.2 lakhs in India...

"On declaration of vehicle recall by the manufacturer, Ministry of Heavy Industries has immediately handed over the matter to Ministry of Road Transport and Highways to examine penal provisions and decide further action related to continuation or otherwise of production and the applicable penalty."

The Tribunal, which stopped short of ordering a ban on the sale of Volkswagen vehicles in the country for allegedly flouting emission norms, also directed Automotive Research Association of India (ARAI) to place its investigation report by February 4, the next date of hearing.

"We do see gravity of the matter. You should not sell cars with defeat device and which are not compliant. Let Volkswagen give an undertaking that it would not sell any vehicle in India fitted with 'cheat device'," the bench said.

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