The Supreme Court on Thursday revived the governments 2015 lawsuit against Nestle India, lifting the stay order on the proceedings that tried the firm for high lead and MSG (monosodium glutamate) content in its popular Maggi instant noodles.
The top court bench referred it back to National Consumer Disputes Redressal Commission this week, two years after the class action suit was brought before it, seeking damages worth Rs 640 crore.
Heres what the court said
A bench led by Justice D.Y. Chandrachud vacated the earlier stay order, asking all parties Nestle, the government, the Food Safety and Standards Authority of India (FSSAI) and others to argue before the Commission on whether the company is culpable for unfair trade practices, false labelling and misleading advertisements.
The bench also said that the proceedings will be continue, based on the report from the Central Food Technological Research Institute (CTRI), Mysuru, where the NCDR-prescribed testing of the Maggi samples was conducted.
What led to the stay order?
The consumer court had directed the Export Inspection Council of India in 2015, to retest 16 samples of Maggi instant noodles. This was done to ensure that the commodity was safe for consumption, and to ascertain the quantity of lead and MSG (a flavour enhancer with proven side effects including infantile obesity, allergic reactions, headache, nausea and numbness).
The apex court in December 2015 had stayed the proceedings after parent company Nestle India challenged the Commissions directive by moving top court, asking it to wait until the samples seized from it had been tested and analysed. Nestle had then claimed that the lead content was within the permissible limit prescribed under the Food Safety Act.
What has Nestle said so far?
Senior lawyer A.M. Singhvi, appearing for Nestle, said, The lead content was found to be within permissible limit and there is some amount of lead in lots of products. He further argued that the Mysuru-based laboratory had found that the noodles contained lead within permissible limits, and it could not be ascertained whether the monosodium glutamate was natural or added.
It is armed with this clean chit that Nestle will re-enter the trial.
Despite pushback from defence counsel on lifting the stay, the SC bench maintained that the central government should get an opportunity to object to the lab report in the NCDRC and that the court should not dismiss the case.
Why is this unprecedented?
The government, representing scores of consumers, argued that the class action suit is not about whether the noodles are harmful, but aims to find out if the company misled its consumers on what the product contains. It also holds that the noodles fall short of the existing food standards, vowing to contest the findings of the lab report.
In an unprecedented move, the consumer affairs ministry filed a complaint in October 2015, using Section 12-1-D of the Consumer Protection Act for the first time in three decades. This followed a ban on the popular commodity by FSSAI in 2015, which alleged that the instant noodles were unsafe and hazardous due to unsafe levels of lead content. FSSAI had also said Nestle violated labelling regulations on taste enhancer MSG and ordered the company to submit a compliance report on its orders.
The Bombay High Court, however, lifted the ban the same year. Within days, the centre brought the lawsuit against the parent company. In the petition filed before the NCDRC, the ministry had charged that Nestle India has mislead consumers claiming that its Maggi noodle was healthy Taste bhi healthy bhi.
The forthcoming hearing in the NCDRC would come at the cost of adverse publicity that had hit sales hard last time the controversy surfaced. Maggi instant noodles, however, remains the market leader in the segment.
Prarthana Mitra is a staff writer at Qrius