Maggi row: NCDRC accepts govt’s Rs640-cr suit, serves notice on Nestle

Days after the Bombay High court quashed the ban order on Nestle India's Maggi instant noodles and directed fresh tests on the flagship brand of the company's fast-food products, the apex consumer court today served notice on Nestle India over the government's Rs640-crore class action suit related to Maggi noodles

A bench of the National Consumer Disputes Redressal Commission (NCDRC) comprising Justice VK Jain and Justice BC Gupta accepted the government's suit against the Swiss food giant's Indian arm and directed Nestle India to respond to the notice by 30 September, when the court will hear arguments for and against Maggi noodles.

During the preliminary hearing, the bench expressed doubt over the government's cause of action, saying the Bombay High Court's judgment in the matter had dealt with the issue of lead content.

Since the high court had rejected the government's current reports on lead content, which it rejected for not being from an accredited laboratory, the consumer court said there was no conclusive report to prove the government's contention and directed fresh tests on Nestle's Maggi noodles by ''accredited labs'' as directed by the high court.

''High court has quashed your order on the ground that laboratories were not accredited and recognised…. Second, you did not follow correct procedure,'' the bench said, adding that ''you have to satisfy whether you had followed the right procedure'' in procuring the reports.

Appearing for the government additional solicitor general Sanjay Jain said there was no prescribed standard for the product and as such, it was up to the food authority to decide.

However, the NCDRC bench said that this practice has been termed by the high court as arbitrary.

The government's argument was that the main question in the case ease was whether the company has been selling products which, as per the ''temporarious guidelines'', are not right.

''As of today, what fresh material do you have to show as the earlier has been rejected by the high court,'' the bench said.

It posted the matter for next hearing for 30 September.

The government, in its petition, has sought a direction to the company to deposit Rs284.55 crore in the Consumer Welfare Fund for defective and hazardous goods sold and unfair trade practice.

''This commission be pleased to direct the opponent company (Nestle India Limited) to deposit in the Consumer Welfare Fund Rs355.40 crore as punitive damages,'' the centre said in its complaint before the commission.

The government also sought an interest of 18 per cent per annum on the amount claimed by it in the complaint till the date of actual payment of the total amount.

The Department of Consumer Affairs in its petition has said that Nestle India has ''indulged in unfair trade practices by false labelling of Maggi Noodles in as much as it states 'No added MSG' prominently on the packet, despite presence of MSG.''

The complaint has also alleged that the company sold ''defective'' goods to the public by selling Maggi noodles with the presence of lead and MSG and indulged in unfair trade practices by offering for sale Maggi Oats Masala Noodles with tastemaker without risk assessment and product approval.

It also sought a direction to the company to recall all the ''defective'' and ''hazardous goods'' with respect to Maggi noodles with Tastemaker in all its variants and Maggi Oats Masala Noodles with Tastemaker and also sought a direction to it for issuance of corrective advertisement to neutralize the effect of the misleading advertisements.

''This commission be pleased to direct the opponent company to remove 'No added MSG' from the packets and labels of all the variants of Maggi noodles…. This commission be pleased to direct the opponent company to ensure strict compliance with labelling regulations for its entire range of products,'' the complaint filed before the commission said.