Relief for Nestle as panel to hear testing issue

The development is significant for Nestle since arguments in the Bombay High Court over testing and sampling went in the company’s favour,  too.

In what looks like another victory for Nestle India, the National Consumer Disputes Redressal Commission (NCDRC) has decided to hear the issue of alleged improper sampling and testing methodology undertaken by various state food regulators.

Accepting an appeal by Nestle to not to conduct fresh tests on samples collected earlier by the authorities from the market, the commission on Wednesday asked the government and the company to appear before it on October 8.

Wednesday's development is significant for the company since arguments in the high court in Bombay over testing and sampling went in Nestle's favour, too.

While, the Commission on Wednesday asked both the parties to explain their positions next week, hearing on the core issue of whether Nestle was liable to pay Rs 640 crore (Rs 6.4 billion) as damages has been postponed till October 30.

Test reports showing presence of lead at higher-than-permissible levels (2.5 parts per million) and monosodium glutamate (MSG) in Maggi noodles from various Food Safety and Standards Authority of India-approved laboratories led to a country-wide recall of the product on June 5, followed by Nestle approaching the Bombay High Court.

 The Food Safety and Standards Authority of India (FSSAI) had, meanwhile, forwarded its claim of the product being hazardous for human consumption and said it was right to ban Maggi at the earliest.

Nestle India's arguments over the procedure of sample collection and conditions of laboratories, eventually, proved to be helpful for the company. The court, questioning the tests conducted earlier, ordered fresh tests and struck down the ban on Maggi.

In the meanwhile, the consumer affairs ministry took suo moto congnisance and filed a class-action suit against Nestle India in NCDRC, a first in the country, and claimed Rs 640 crore in damages.

"We have already done over 3,500 tests of Maggi in independent as well as in our own accredited laboratories. All results showed Maggi is safe to eat. Food regulators in the US, UK, Singapore, Canada, Australia and New Zealand, have also found Maggi manufactured by Nestle India to be safe. Nestle India is fully committed to working with all stakeholders to get Maggi back on the shelves," a Nestle India spokesperson said.

During Wednesday's hearing, Nestle said the entire litigation in NCDRC should be set aside, since after the Bombay High Court order it did not have any more significance.

"The company has been "singled out" and victimised by the authorities," it argued. The commission, however, has not accepted the plea for rejecting the case. "Nestle India, in response to the complaint filed with the NCDRC, has raised concerns over the maintainability of the complaint.

This is based on the fact that the complaint makes allegations similar to those leading to the ban of the product on June 5, which was quashed by the Bombay High Court on August 13," the spokesperson said. 

While in Bombay High Court, Nestle India ultimately brought the wind in its favour on the same line of arguments, lawyers indicate the strategy may become handy this time, too. However, pointing towards it counter side, Ashish Prashad, partner, Economic Law Practise, said, "The issue that has been opened in front of NCDRC has already been decided by the Bombay High Court. It may lead to a retrial."