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Maggi controversy: SC revives government’s case against Nestle India in National Commission

Nestle India Limited has welcomed the Supreme Court’s order that allows National Consumer Disputes Redressal Commission (NCDRC) to proceed with a three-year-old suit with regard to Maggi filed by the government. The apex court was hearing an appeal filed by the company against two interim orders passed by NCDRC in a suit filed by the ministry of consumer affairs seeking damages of Rs 640 crore on charges of unfair trade practices, false labelling and misleading advertisements.

A bench headed by Justice DY Chandrachud said the laboratory test reports by Central Food Technological Research Institute (CFTRI), where the testing of the Maggi noodle samples was conducted, would form the basis for the proceedings. The top court had earlier stayed the proceedings before the NCDRC after Nestle had challenged it.

The consumer affairs ministry had in 2015 filed a complaint against Nestle India before NCDRC under Section 12 (1) (d), using a provision for the first time in the nearly three-decade-old Consumer Protection Act seeking damages of Rs 640 crore. The government had moved the NCDRC after Nestle’s popular instant noodles Maggi was banned by the Food Safety and Standards Authority of India (FSSAI) in June 2015 for allegedly containing lead beyond permissible limits, forcing the company to withdraw the product from the market. In their petition, the ministry charged that Nestle India had misled consumers by claiming that its Maggi noodles were healthy. It accused Nestle of causing harm to Indian consumers by allegedly involving in unfair trade practices and false labelling related to Maggi noodles.

Nestle had to withdraw Maggi noodles from the market over allegations of high lead content and presence of MSG (monosodium glutamate). FSSAI banned Maggi noodles after it found excess level of lead in samples, terming it ‘unsafe and hazardous’ for human consumption. FSSAI had also said Nestle violated labelling regulations on taste enhancer MSG and ordered the company to submit a compliance report on its orders.

Under Section 12 (1) (d), both the Centre and the states have powers to file complaints. Usually, NCDRC comes into the picture following complaints filed by a consumer, but a section of the Consumer Protection Act of 1986 also provides for the government to register a complaint.

NCDRC issued the interim directions by its order dated 9 December 2015, for sampling the product ‘Maggi Noodles’ in nine variants for testing with reference to the quantity of lead and MSG. Subsequently by its order dated 10 December 2015, NCDRC issued further directions.

Aggrieved by these directions, Nestle India challenged the two interim orders of NCDRC before the Supreme Court in 2015. As per directions of the apex court, samples were sent to CFTRI.

In view of the reports received from CFTRI, the Supreme Court agreed with Nestle India’s contention that the samples were compliant for lead and other relevant parameters and set aside both the interim orders passed by NCDRC. The Supreme Court also directed that the reports received from CFTRI would henceforth be the basis for proceedings before NCDRC. The reports should be duly evaluated by NCDRC in the complaint pending at the behest of the Union of India.

The Supreme Court said that since the complaint was pending, it would be inappropriate for it to pre-empt the exercise of jurisdiction by NCDRC. The top court set aside the impugned interim directions of NCDRC dated 9 December and 10 December 2015 and stated that the NCDRC would be at liberty to proceed further by evaluating the reports.

 

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