India's National Green Tribunal (NGT) today ordered German auto major Volkswagen to pay Rs 500 crore as fine for "intentionally programming its diesel engines with cheat devices" that caused environmental damage.

A bench headed by NGT chairperson Justice Adarsh Kumar Goel directed the car-maker to deposit the amount within two months.

The tribunal enhanced the compensation amount of Rs 171.34 crore which was recommended by an NGT- appointed committee, as a means of "creating deterrence".

The auto giant, however, said that it did not violate the BS-IV norms and that the test results were based on "on road testing" for which there were no prescribed standards.

The NGT bench said, "sustainable development is the main guiding factor... We are unable to accept the manufacturer's objections to the report."

It said that the apex pollution monitoring body may consider utilising the fine amount towards improving air quality in the National Capital Region and other highly polluted areas.

The NGT-appointed committee on November 16 last year said that the use of ''cheat device'' by Volkswagen in diesel cars in India leads to inference of environmental damage and had directed it to deposit an interim amount of Rs 100 crore with the Central Pollution Control Board (CPCB).

It had also constituted a joint team of representatives of the CPCB, Ministry of Heavy Industries, Automotive Research Association of India (ARAI) and National Environmental Engineering Research Institute, which had recommended Rs 171.34-crore fine on Volkswagen as "health damages" for causing air pollution in Delhi due to excess nitrogen oxide (NOx) emissions.

The expert committee, in its report, has estimated that Volkswagen cars released approximately 48.678 tonnes of NOx in 2016 in the national capital.