The automobile giant has admitted in 2015 using "defeat device" in 11 million diesel engine cars sold in the US, Europe and other global markets to help them appear less polluting in emissions tests India's environmental court Thursday threatened Volkswagen executives with arrest and gave the German automaker a day to pay $14 million for violating pollution norms by fudging emission tests.
The "Dieselgate" scandal, which saw VW cheat emissions tests on millions of diesel vehicles, has already cost the firm over $30 billion in fines, recalls and compensation worldwide.
India's National Green Tribunal ruled in November VW must deposit a fine of 1.7 billion rupees ($24 million) with the pollution control board as "health damage".
The court on Thursday slammed VW for disregarding its fine order and warned that it will order the arrest of Volkswagen directors if the company fails to pay one billion rupees before 5:00 pm (1130 GMT) on Friday.
"Why have you not complied with our order when there is no stay. We will not give you any further time," the green tribunal said.
The tribunal's order followed a plea by a New Delhi school teacher who sought a ban on more than 300,000 Volkswagen diesel vehicles on Indian roads for violating pollution norms.
The court formed an expert panel that found that the German cars released approximately 48.678 tonnes of nitrogen oxide in 2016 in the already severely polluted Indian capital.
It recommended a 1.7-billion-rupee fine as nitrogen oxide is a smog-forming pollutant linked to heart and lung disease.
New Delhi is one the most polluted capitals in the world, with pollution levels often breaching safe norms.
Much of the its dirty air is blamed on the millions of vehicles plying on its roads.
In a statement to AFP Volkswagen denied the allegations and said it has challenged the fine order before the Supreme Court, but said that it would pay the fine on time.
"The Volkswagen Group India will comply with the order of Honourable National Green Tribunal and deposit the money, as directed," said a spokesperson for Volkswagen Group India.
The automobile giant had admitted in 2015 using "defeat device" in 11 million diesel engine cars sold in the US, Europe and other global markets to help them appear less polluting in emissions tests.
It recalled 323,700 vehicles in India in December 2015 to fix the emission software after Indian auto regulator found emission levels in some models were up to 2.6 times more than the prescribed limits.
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