A bench of National Consumer Disputes Redressal Commission headed by Justice V K Jain admitted the Centre's plea which also accused the company of false labelling and giving misleading advertisements.
Taking note of Bombay High Court's August 13 judgement quashing the orders of the Indian food regulators banning the nine variants of instant noodles in the country, the bench directed the Centre to test samples afresh by "accredited labs".
"High Court has quashed your (Centre's) order on the ground that laboratory were not accredited and recognised....
Second, you did not follow correct procedure," the bench said, adding that "you (Centre) have to satisfy whether you had followed the right procedure" in procuring the reports.
Additional Solicitor General Sanjay Jain, appearing for the Centre, however, said that there is no prescribed standard as such but it is 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 Centre said that in this case, the main question is whether the company has been selling products which, as per the "temporarious guidelines", are not right.
"As on 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 September 30. In its petition, the Centre has sought a direction to the company to deposit Rs 284.55 crore or Rs 2.84 billion 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 Rs 355.40 crore as punitive damages," the Centre said in its complaint before the commission.
The Centre has 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.
In its petition, Department of Consumer Affairs 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.
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