More than three years after Maggi ban, ghost of the 2015 fiasco seems to be back to haunt Nestle India, the maker of Maggi noodles.
The Supreme Court on Thursday revived a class action suit filed by the central government against the Swiss food major for allegedly selling noodles that were unfit for consumption.
The quality of widely-sold instant noodle is again expected to be under the legal scanner of the National Consumer Disputes Redressal Commission (NCDRC).
On Thursday, while the Supreme Court allowed the class action suit by NCDRC, it upheld Nestle’s stand by not allowing any further sampling or testing exercise.
Any further probe, it said, will proceed on the basis of the old report filed by Central Food Technological Research Institute (CFTRI), Mysore.
The CFTRI had found presence of lead at a lower level than that permitted by the FSSAI. It further pointed out that despite presence of MSG in Maggi samples, it was unable to determine whether they were from natural sources or added artificially.
As per Food Safety and Standards Act, there is no ban on food items which contain MSG occurring from natural sources.
All variants of Maggi noodles had been banned on 5 June, 2015 by the country’s apex food regulator the Food Safety and Standards Authority of India (FSSAI) after initial tests confirmed presence of monosodium glutamate (MSG) and high levels of lead in them.
The long drawn battle between union government and the food major gained steam in August 2015, when the consumer affairs ministry filed a class action suit against Nestle India in NCDRC, seeking Rs 640 crore in damages.
The move was the first such instance, when the union government had suo moto filed a class action suit against a firm. In a separate litigation the FSSAI and Nestle continue to fight over the quality of Maggi noodles.
“The class action suit was filed under section 12(1) (d) of the consumer protection act-1986. It was the first time that the government invoked this section against a company. The same has not been used since,” advocate Nitish Banka, who has closely followed the case, said.
The government had, in its plea before the consumer disputes commission, alleged that Nestle India had misled consumers by claiming that Maggi was healthy with the tagline-"Taste bhi healthy bhi", when in reality its products contained lead and MSG.
The class action suit in NCDRC got stuck when Nestle approached the top court in December against NCDRC’s interim orders seeking fresh sampling and lab tests on Maggi noodles.
The firm had argued that tests conducted in the non-accredited laboratories are not fit for consideration, citing a Bombay High Court order that gave clean chit to Maggi noodles in October citing the similar reasons.
CFTRI is a government accredited laboratory.
Welcoming the SC order, a Nestle India spokesperson said, “Hon’ble Supreme court in view of reports received from CFTRI, has agreed with Nestlé’s contention and has set aside both the interim orders passed by NCDRC which were challenged by Nestle.”
After a sharp drop, once the SC order came out, Nestle India’s stock ended 1.36 per cent higher at the Bombay Stock Exchange at 11,191.10 today.
The litigation between the FSSAI and the food company that went to the apex court after the Bombay High Court order is expected to come up this month.
However, sources in FSSAI say that disagreement over quality of products collected from Nestle has been resolved between the two parties and the regulator is satisfied with the company’s initiatives on the front.
However, it is expected to take up certain reservations in the Bombay High Court that rejected reports of non-accredited labs. “These state labs are in delivering appropriate results and we are working with them. Thus, it is not feasible to out rightly reject their credibility”, said a senior official at FSSAI.
Since its re-entry in November, 2015, Maggi noodles made a comeback by regaining the top slot. However, it market share continues to remain lower – at 60 per cent – than pre-ban level. The brand raked in over Rs 2,600 crore in sales for the company in 2017.
What is Class Action Suit?
A complaint under Consumer Protection Act filed on behalf of or for the benefit of all the consumers, having a common grievance and seeking the identical relief against same person.
Filed under
Section 12(1)(d) of the consumer protection act-1986
-Filed for first time by government in Maggi case. Not filed against any company since
-Filed in public interest by the government saying Maggi cheated and mislead innocent customers
Under Section 12(1)(c) of the consumer protection act-1986
-Filed by private parties against companies and when all buyers are affected by same cause
-Filed when there is no default on payment and complaint is related to same product
The Supreme Court on Thursday revived a class action suit filed by the central government against the Swiss food major for allegedly selling noodles that were unfit for consumption.
The quality of widely-sold instant noodle is again expected to be under the legal scanner of the National Consumer Disputes Redressal Commission (NCDRC).
On Thursday, while the Supreme Court allowed the class action suit by NCDRC, it upheld Nestle’s stand by not allowing any further sampling or testing exercise.
Any further probe, it said, will proceed on the basis of the old report filed by Central Food Technological Research Institute (CFTRI), Mysore.
The CFTRI had found presence of lead at a lower level than that permitted by the FSSAI. It further pointed out that despite presence of MSG in Maggi samples, it was unable to determine whether they were from natural sources or added artificially.
As per Food Safety and Standards Act, there is no ban on food items which contain MSG occurring from natural sources.
All variants of Maggi noodles had been banned on 5 June, 2015 by the country’s apex food regulator the Food Safety and Standards Authority of India (FSSAI) after initial tests confirmed presence of monosodium glutamate (MSG) and high levels of lead in them.
The long drawn battle between union government and the food major gained steam in August 2015, when the consumer affairs ministry filed a class action suit against Nestle India in NCDRC, seeking Rs 640 crore in damages.
The move was the first such instance, when the union government had suo moto filed a class action suit against a firm. In a separate litigation the FSSAI and Nestle continue to fight over the quality of Maggi noodles.
“The class action suit was filed under section 12(1) (d) of the consumer protection act-1986. It was the first time that the government invoked this section against a company. The same has not been used since,” advocate Nitish Banka, who has closely followed the case, said.
The government had, in its plea before the consumer disputes commission, alleged that Nestle India had misled consumers by claiming that Maggi was healthy with the tagline-"Taste bhi healthy bhi", when in reality its products contained lead and MSG.
The class action suit in NCDRC got stuck when Nestle approached the top court in December against NCDRC’s interim orders seeking fresh sampling and lab tests on Maggi noodles.
The firm had argued that tests conducted in the non-accredited laboratories are not fit for consideration, citing a Bombay High Court order that gave clean chit to Maggi noodles in October citing the similar reasons.
CFTRI is a government accredited laboratory.
Welcoming the SC order, a Nestle India spokesperson said, “Hon’ble Supreme court in view of reports received from CFTRI, has agreed with Nestlé’s contention and has set aside both the interim orders passed by NCDRC which were challenged by Nestle.”
After a sharp drop, once the SC order came out, Nestle India’s stock ended 1.36 per cent higher at the Bombay Stock Exchange at 11,191.10 today.
The litigation between the FSSAI and the food company that went to the apex court after the Bombay High Court order is expected to come up this month.
However, sources in FSSAI say that disagreement over quality of products collected from Nestle has been resolved between the two parties and the regulator is satisfied with the company’s initiatives on the front.
However, it is expected to take up certain reservations in the Bombay High Court that rejected reports of non-accredited labs. “These state labs are in delivering appropriate results and we are working with them. Thus, it is not feasible to out rightly reject their credibility”, said a senior official at FSSAI.
Since its re-entry in November, 2015, Maggi noodles made a comeback by regaining the top slot. However, it market share continues to remain lower – at 60 per cent – than pre-ban level. The brand raked in over Rs 2,600 crore in sales for the company in 2017.
What is Class Action Suit?
A complaint under Consumer Protection Act filed on behalf of or for the benefit of all the consumers, having a common grievance and seeking the identical relief against same person.
Filed under
Section 12(1)(d) of the consumer protection act-1986
-Filed for first time by government in Maggi case. Not filed against any company since
-Filed in public interest by the government saying Maggi cheated and mislead innocent customers
Under Section 12(1)(c) of the consumer protection act-1986
-Filed by private parties against companies and when all buyers are affected by same cause
-Filed when there is no default on payment and complaint is related to same product
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