The Confusing Question

Riddle 
One day, Kushal and Mehul went for a day out. It was a long day, and they both were tired. None of them wanted to drive the car. Mehul challenges Kushal to solve a riddle. If Kushal could give the correct answer, Mehul offers to drive the car, if not, Kushal will have to drive the car.

    Note that it`s the agent with the Green badge and not Agent Green talking to Agent Red. As the agent with the green badge has spoken to Agent Red, we know that Agent Red doesn`t have a green badge. We already know he doesn`t have a red badge. Therefore he has a yellow badge. The agent with the green badge cannot be Agent Red, nor can he be Agent Green, therefore he is Agent Yellow. So Agent Yellow has a Green badge, and Agent Red has a yellow badge, meaning Agent Green must have a red badge.