Govt files class action suit against Nestle India, seeks Rs640 cr damages

The government has filed a class action suit against Nestle India, the Indian arm of Swiss food firm Nestle, seeking Rs639.96 crore ($99 million) in damages on behalf of consumers after the country's worst packaged food scare in a decade

The Department of Consumer Affairs under the ministry of consumer affairs, food and public distribution filed a complaint under section 12(1) (d) of the Consumer Protection Act, 1986 with the National Consumer Disputes Redressal Commission (NCDRC).

The department filed the class action suit on behalf of the large number of consumers of Maggi in the country on grounds of unfair trade practices, sale of defective goods and sale of Maggi Oats Noodles to the public without product approval.

The complainant has sought payment of a sum of Rs284, 55,00,000 (284.55 crore) by Nestle India as liability and another Rs355,40,70,000 (Rs355.40 crore) as punitive damages for the gross negligence, apathy and callousness on the part of the company.

The total claim on Nestle India works out to Rs639.96 crore

"The department took exception (given) that Maggi was largely consumed by children and Nestle's advertisements aimed at popularising Maggi among children," said a government official at the food ministry.

Maggi instant noodles are hugely popular in India as a quick snack, mainly with school children and office workers and are available at countless roadside eateries.

They were withdrawn by Nestle in June after the food safety authorities ordered the company to stop sale of the product.

The government is reported to have arrived at the size of the fine by estimating the numbers of consumers, the size of the market and the number of complaints received.

Nestle India, however, said it has not yet received official notice of the government lawsuit. "We shall be able to provide substantive response after we receive the official papers," he said.

Nestle has been at the centre of India's worst food scare in a decade after the office of the Food Safety and Standards Authority (FSSAI) in Uttar Pradesh found excess lead in a sample of Maggi noodles.

The company withdrew the brand from Indian stores last month, but challenged the findings of the FSSAI in the Bombay High Court, which too dismissed the case.