August 17, 2015     

 Latest in Maggi Fiasco: Government Sues Nestle for Unfair Trade Practices

 

The recent twist in the Maggi fiasco has again landed Nestle in troubled waters as the Government has sued Nestle for Rs. 639 crores over alleged unfair trade practices.

 

Indian Daily, The Hindu on August 12 reported that the Government had filed a class action suit against Nestle seeking Rs. 639 Crores in damages for alleged unfair trade practices, false labelling and misleading advertisements.

 

Since April, 2015 Nestle has been in rumpus over allegations of Maggi noodles containing lead and monosodium glutamate (MSG) in excess of permissible limits. Subsequently, Maggi noodles have been banned in several Indian states. Moreover, Bollywood superstars like Madhuri Dixit, Amitabh Bachchan and Preity Zinta who endorsed Maggi noodles were also served with legal notices for misleading advertisements.

 

Reportedly, the recent move of Government comes as a result of the impugned product misleading public by claiming Maggi to be healthy for children and the claimed damages include penal damages and takes into account annual profit and sales of the company through its entire range of Maggi products.

 

As per the reports, if the Government wins the case then the entire amount of damages would be assigned to the Consumer Welfare Fund under the Consumer Affairs Department which would be used for the welfare of consumers.

Bombay High Court Lifts Ban on Maggi

 

On one hand where Government is suing Nestle and claiming hefty penalty from it on the other hand Bombay High Court has ruled in favour of Maggi on August 13 in the case of M/s Nestle India Limited v. The Food Safety and Standards Authority of India and Ors. (Writ Petition (L) No. 1688 of 2015). The Court in the case set aside the ban order imposed by FSSAI on Maggi noodles and remarked the impugned order as ‘arbitrary, unjust and violative of Article 14 of the Constitution’.

 

The Bench has also directed re-testing of Maggi samples on the grounds that labs in which samples were earlier tested were not authorized to test for lead and mandatory testing procedure were also not followed.

 

Conclusion

 

Nestle definitely has reasons to cheer as well as weep. Nestle Maggi noodles a leading edible product in India has faced a lot of turbulence in the recent months and its fate still remains undecided. Though the recent order of Bombay High Court raises significant concerns regarding testing procedures and methods followed by the food regulator in India.

 

Indian Daily, Indian Express reports that if re-testing of Maggi noodles as directed by the Bombay High Court is cleared by the Court then Nestle may consider filing a defamation suit against FSSAI for allegedly acting in an arbitrary and non-judicious manner in the matter.

Sources:

http://www.thehindu.com/news/bombay-hc-lifts-ban-on-maggi/article7534326.ece

http://www.thehindu.com/news/national/govt-sues-nestle-for-rs-639-crore/article7527353.ece

http://indianexpress.com/article/blogs/the-maggi-verdict-could-be-bad-news-for-fssai-heres-why/

  

 

 

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