Tata Chemicals Ltd. vs State Of U.P. Thru Secy. And 3 ...
2017 Latest Caselaw 4888 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


 
A.F.R.
 

 
Court No.39
 

 
Case :- WRIT - C No. - 4345 of 2014
 

 
Petitioner :- Tata Chemicals Ltd.
 
Respondent :- State Of U.P. Thru Secy. And 3 Others
 
Counsel for Petitioner :- Raghav Nayar, Rishab Kumar, Akshat 					Srivastava
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Dilip Gupta,J.

Hon'ble Jayant Banerji,J.

This petition seeks the quashing of the order dated 31 July 2013 passed by the Adjudicating Officer/Additional District Magistrate (F & R), Jaunpur1 by which a penalty of Rs.1,25,000/- has been imposed on the petitioner-TATA Chemicals Limited2 under Section 26/52 of the Food Safety and Standards Act, 20063 for the reason that the food product in question was misbranded and had violated Regulation 2.3.1(5) of the Food Safety and Standards (Packaging and Labelling) Regulations, 20114.

It is stated that the proceedings were initiated against the petitioner after a seizure of a packet of 'TATA SALT' which also bore the words "HAVE YOU TRIED? TATA I-SHAKTI PULSES" and ultimately though the salt was found to be in conformity with the standards laid down in the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 20115, but the statement contained in the packet referred to above was found to have violated the Packaging Regulations.

Sri Prashant Chandra, learned Senior Counsel appearing for the petitioner assisted by Sri Raghav Nayar, Sri Rishabh Kumar and Sri Akshat Srivastava submitted that the said information appearing on the 'TATA SALT' packet does not amount to misbranding inasmuch as it does not carry any statement which can be said to be false, misleading or deceptive. It is, therefore, his submission that the impugned order imposing penalty deserves to be set aside. In support of this contention, learned Senior Counsel placed reliance upon a decision of the Supreme Court in Parakh Foods Limited Vs. State of Andhra Pradesh & Anr.6

Sri Shashank Shekhar Singh, learned Additional Chief Standing Counsel appearing for the respondents has, however, supported the impugned order and has contended that it does not require any interference by the Court under Article 226 of the Constitution. Learned Additional Chief Standing Counsel has also submitted that the petitioner has a statutory alternative remedy of filing an appeal under Section 70 of the Act before the Food Safety and Appellate Tribunal7.

Learned Senior Counsel for the petitioner has submitted that the statutory alternative remedy is not available to the petitioner as the Presiding Officer of the Appellate Tribunal constituted under Section 70 of the Act has not been appointed as yet.

We have considered the submissions advanced by learned counsel for the parties.

The preliminary objection raised by learned counsel for the respondents that this petition should be dismissed as there is a statutory alternative remedy available to the petitioner cannot be accepted for the reason that the Presiding Officer of the Appellate Tribunal has not been appointed as yet.

In order to appreciate the contentions advanced by learned counsel for the parties on merits, it would be appropriate to reproduce the relevant provisions of the Act and the Regulations.

Section 3(zf) of the Act defines 'misbranded food' and is reproduced below :

"3(zf) "misbranded food" means an article of food-

(A)  if it is purported, or is represented to be, or is being-

(i)  offered or promoted for sale with false, misleading or deceptive claims either;

(a) upon the label of the package, or

(b) through advertisement, or

(ii) sold by a name which belongs to another article of food; or

(iii) offered or promoted for sale under the name of a fictitious individual or company as the manufacturer or producer of the article as borne on the package or containing the article or the label on such package; or

(B) if the article is sold in packages which have been sealed or prepared by or at the instance of the manufacturer or producer bearing his name and address but-

(i) the article is an imitation of, or is a substitute for, or resembles in a manner likely to deceive, another article of food under the name of which it is sold, and is not plainly and conspicuously labelled so as to indicate its true character; or

(ii) the package containing the article or the label on the package bears any statement, design or device regarding the ingredients or the substances contained therein, which is false or misleading in any material particular, or if the package is otherwise deceptive with respect to its contents; or

(iii) the article is offered for sale as the product of any place or country which is false; or

(C) if the article contained in the package-

(i) contains any artificial flavouring, colouring or chemical preservative and the package is without a declaratory label stating that fact or is not labelled in accordance with the requirements of this Act or regulations made thereunder or is in contravention thereof; or

(ii) is offered for sale for special dietary uses, unless its label bears such information as may be specified by regulation, concerning its vitamins, minerals or other dietary properties in order sufficiently to inform its purchaser as to its value for such use; or

(iii) is not conspicuously or correctly stated on the outside thereof within the limits of variability laid down under this Act.

Section 26 of the Act deals with responsibilities of the food business operator and is reproduced below:

26. Responsibilities of the food business operator. - (1)  Every food business operator shall ensure that the articles of food satisfy the requirements of this Act and the rules and regulations made thereunder at all stages of production, processing, import, distribution and sale within the businesses under his control.

(2).  No food business operator shall himself or by any person on his behalf manufacture, store, sell or distribute any article of food-

(i)  which is unsafe; or

(ii) which is misbranded or sub-standard or contains extraneous matter; or

(iii)  for which a licence is required, except in accordance with the conditions of the licence; or

(iv)  which is for the time being prohibited by the Food Authority or the Central Government or the State Government in the interest of public health; or

(v) in contravention of any other provision of this Act or of any rule or regulation made thereunder.

(3)  No food business operator shall employ any person who is suffering from infectious, contagious or loathsome disease.

(4) No food business operator shall sell or offer for sale any article of food to any vendor unless he also gives a guarantee in writing in the form specified by regulations about the nature and quality of such article to the vendor:

Provided that a bill, cash memo, or invoice in respect of the sale of any article of food given by a food business operator to the vendor shall be deemed to be a guarantee under this section, even if a guarantee in the specified form is not included in the bill, cash memo or invoice.

(5)  Where any food which is unsafe is part of a batch, lot or consignment of food of the same class or description, it shall be presumed that all the food in that batch, lot or consignment is also unsafe, unless following a detailed assessment within a specified time, it is found that there is no evidence that the rest of the batch, lot or consignment is unsafe:

Provided that any conformity of a food with specific provisions applicable to that food shall be without prejudice to the competent authorities taking appropriate measures to impose restrictions on that food being placed on the market or to require its withdrawal from the market for the reasons to be recorded in writing where such authorities suspect that, despite the conformity, the food is unsafe."

Section 52 of the Act deals with penalty for misbranded food and is reproduced below:

"52. Penalty for misbranded food.-

(1) Any person who whether by himself or by any other person on his behalf manufactures for sale or stores or sells or distributes or imports any article of food for human consumption which is misbranded, shall be liable to a penalty which may extend to three lakh rupees.

(2) The Adjudicating Officer may issue a direction to the person found guilty of an offence under this section, for taking corrective action to rectify the mistake or such article of food shall be destroyed."

Regulation 2.3.1 of the Packaging Regulations deals with General Conditions and is as follows:

"1. Any information or pictorial device written, printed, or graphic matter may be displayed in the label provided that it is not in conflict with the requirements of these Regulations.

2. Every declaration which is required to be made on package under these regulations shall be:

(i) Legible and prominent, definite, plain and unambiguous,

(ii) Conspicuous as to size number and colour,

(iii) as far as practicable, in such style or type of lettering as to be boldly, clearly and conspicuously present in distinct contrast to the other type, lettering or graphic material used on the package, and shall be printed or inscribed on the package in a colour that contrasts conspicuously with the background of the label:

Provided that --

(a) Where any label information is blown, formed or moulded on a glass or plastic surface or where such information is embossed or perforated on a package, that information shall not be required to be presented in contrasting colours.

(b) Where any declaration on a package is printed either in the form of a handwriting or hand script, such declaration shall be clear, unambiguous and legible.

3. No declaration shall be made so as to require it to be read through any liquid commodity contained in the package

4. Where a package is provided with an outside container or wrapper, such container or wrapper shall also contain all the declarations which are required to appear on the package except where such container or wrapper itself is transparent and the declarations on the package are easily readable through such outside container or wrapper.

5. Labels not to contain false or misleading statements: A label shall not contain any statement, claim, design, device, fancy name or abbreviation which is false or misleading in any particular concerning the food contained in the package, or concerning the quantity or the nutritive value or in relation to the place of origin of the said food:

Provided that this regulation shall not apply in respect of established trade or fancy names of confectionery, biscuits and sweets, such as, barley, sugar, bull's eye, cream cracker or in respect of aerated waters, such as, Ginger Beer or Gold-Spot or any other name in existence in international trade practice."

The petitioner-TATA Chemicals Limited is an existing Company as defined under the provisions of Companies Act, 1956. It has its registered office at Mumbai and is engaged in various business, including manufacture, sale and distribution of food products under various brand names which are sold throughout the country. Amongst the various products that are manufactured, distributed and sold in packaged form by the petitioner, some of them are TATA SALT (Iodised Salt), TATA I-SHAKTI SALT (Iodised Salt) and TATA I-SHAKTI PULSE.

A notice dated 29 September 2012 was served by the Designated Officer forwarding a copy of the report of the Food Analyst dated 27 July 2012. The report found the sample to be Iodised Salt falling under Regulation 2.9.30.2 of the Additives Regulations. The report accompanying the notice is reproduced below :-

"I. Sample Description- White crystalline salt is in sealed polythene packet on which TATA SALT, IODINE GUARANTEE IODIZED SALT, and followed Regulation 2.2.2 and 2.2.2(4)(III). But on the label of sample "HAVE YOU TRIED TATA I-PULSES, UNPOLISHED, NATURAL, SORTED, GRADED are also printed.

II. Physical Appearance-

III. Label:-

Sr. No

Quality Characteristics

Name of method of the test used

Results

Prescribed Standards as per (a) Food Safety and Standards (Packaging and Labelling) Regulations, 2011. (b) As per Label Declaration for Proprietary Food (c) As per provision of the Act, Rules and Regulations for both the Above.

(a)

Moisture

SOPM

3.17%

2.9.30.2

(b)

Matter insoluble in water on DWB

ISI

0.52%

(c)

NaCl content on DWB

ISI

98.30%

(d)

Matter soluble in water other than NaCl on DWB

ISI

2.12%

(d)

Iodine content

ISI

47 ppm

IV. Opinion - Manufacturer has not followed Regulation 2.3.1(5) of FSSA (Packaging and Labelling) Regulations 2011. As exaggeration of quality of other products is printed on the label of sample. Hence the sample is misbranded.

The notice finds the quality of the product contained in the packet to be in accordance with the standards laid down in the Additives Regulations but mentions that the Manufacturer had not followed Regulation 2.3.1(5) of the Packaging Regulations.

The petitioner submitted an Appeal under Section 46(4) of the Act to the Designated Officer. However, the Food Safety Officer obtained permission of the Designated Officer on 20 November 2012 and initiated proceedings for levy of penalty on the petitioner. The petitioner submitted a reply. On 14 February 2013, the report of the Referral Food Laboratory, Kolkata dated 1 February 2013 was also submitted. The opinion given in the report of the Referral Food Laboratory is as follows:

"Opinion: The sample of Iodised Salt (TATA Brand) conforms to the standards laid down under Regulation no.2.9.30(2) of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011. However, the sample contravenes FSSAI Regulation no.2.3 (Manner of Declaration) sub-clause 2.3.1(5) (type of pictorial device, statement and claims) for violation of Food Safety and Standards (Packaging and Labelling) Regulations, 2011."

The Adjudicating Officer by means of the order dated 31 July 2013, imposed a penalty of Rs.1,25,000/- upon the petitioner in the proceedings initiated under Section 26/52 of the Act by holding that the provisions of Regulation 2.3.1(5) of the Packaging Regulations have been violated and for this, reliance had been placed upon the report dated 1 February 2013 submitted by the Referral Food Laboratory at Kolkata.

The submission of learned Senior Counsel for the petitioner is that there has been no misbranding of food as contemplated under Section 3(zf) of the Act nor the label contains false or misleading statement as contemplated under Regulation 2.3.1(5) of the Packaging Regulations. Learned Senior Counsel submitted that the Adjudicating Officer has not recorded any finding as to how the statement contained on the packet was false, misleading or incorrect.

The copy of the package of TATA SALT which forms the subject matter of the proceedings is as follows:

Regulation 2.3 of the Packaging Regulations deals with Manner of Declaration. Regulation 2.3.1(1) provides that any information or pictorial device written, printed, or graphic matter may be displayed in the label provided that it is not in conflict with the requirements of the Packaging Regulations. Regulation 2.3.1(5) provides that a label shall not contain any statement, claim, design, device, fancy name or abbreviation which is false or misleading in any particular concerning the food contained in the package, or concerning the quantity or the nutritive value or in relation to the place of origin of the said food.

The offending portion contained in the label does not in any manner relate to the salt contained in the packet as it deals with other products namely, TATA I-Shakti Pulse (Iodised Salt). This would be clear from the image contained in the packet.

The impugned order, however, relies on the reports dated 30 November 2012 and 1 February 2013. These reports specifically state that the sample of Iodised Salt (TATA Brand) conforms to the standards laid down in the Additives Regulations but it contravenes Regulation 2.3.1(5) of the Packaging Regulations. No reason whatsoever has been given as to why there has been a contravention of Regulation 2.3.1(5) of the Packaging Regulations. The impugned order does not contain any finding that the label contains any false or misleading statement and as noticed above, the offending portion does not contain any statement with regard to the food that has been packaged.

In Parakh Foods Limited, on which reliance has been placed by learned Senior Counsel for the petitioner, the Supreme Court examined what constituted "misbranding" and the observations are :

"11. In the present case, it is true that the appellant has used pictures of vegetables on the label of the product which is refined soyabean oil, which according to the appellant is to depict the purpose for which the oil can be used, viz., preparation of the vegetables depicted thereon. Unless the picture depicted on a label of edible oils and fats exaggerates the quality of the product, it would not fall within the mischief of Rule 37 D. In the present case, the vegetables shown on the label of soyabean oil do not in any way indicate that the quality of soyabean oil is 'super-refined', 'extra- refined', 'micro-refined', 'double-refined', 'ultra-refined', 'anti- cholesterol', 'cholesterol fighter', 'soothing to heart', 'cholesterol friendly', 'saturated fat free' etc., nor it indicates the exaggeration towards the quality of the product to come within the mischief of Rule 37-D of the PFA Rules. In our opinion the High Court has committed a serious error in arriving at a finding that the article of food (soyabean oil) was misbranded since the picture contained on the label has nothing to do with the article of food in question, completely ignoring the fact that the article of food can be used for cooking the vegetables shown in the picture which cannot be said to be exaggerating the quality of the food in question."

Thus, unless the product printed on the label is related to the food contained in the packet, there can be no misbranding. It is also clear that the provisions of Section 3(zf) of the Act relating to 'misbranded food' would have no application in the present case as the article or food contained in the packet has not been offered or promoted for sale with false, misleading or deceptive claims. There has, therefore, been no violation of provisions of Regulation 2.3.1(5) of the Packaging Regulations.

It is, therefore, not possible to sustain the impugned order dated 31 July 2013 passed by the Adjudicating Officer imposing penalty. It is, accordingly, set aside.

The writ petition is, accordingly, allowed.

Date :-03.10.2017

SK

(Dilip Gupta, J.)

(Jayant Banerji, J.)