Madras High Court
A.R.Dairy Food Private Limited vs Food Safety And Standards Authority Of ... on 14 February, 2025
W.P.(MD).No.4619 of 2025
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on: Pronounced on:
02.04.2025 16.05.2025
CORAM:
THE HONOURABLE MR.JUSTICE V.LAKSHMINARAYANAN
W.P.(MD).No.4619 of 2025
and
W.M.P.(MD).No.3310 of 2025
A.R.Dairy Food Private Limited,
Represented by its Authorized Signatory,
R.Rajadharshini .. Petitioner
Vs.
1.Food Safety and Standards Authority of India,
Ministry of Health and Family Welfare,
2nd Floor, South Wing, Central Documentation Complex,
Chennai Port Trust Building, Rajaji Salai,
Chennai – 600 001.
2.Central Designated Officer,
Central Licensing Authority under
FSSI Act, 2006 (TN-03),
Southern Regional Office,
Chennai Port Trust Building,
Rajaji Salai, Chennai – 600 001. .. Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, to call for the records in F.No.
10014042001610/TN-03/2024-25/1425 dated 14.02.2025, on the file of the
1/70
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W.P.(MD).No.4619 of 2025
2nd respondent herein and quash the same as wholly illegal and without
jurisdiction.
For Petitioner : Mr.V.P.Raman
Senior Counsel
for Mr.K.Krishna
For Respondents : Mr.S.Arunnithy
ORDER
This writ petition challenges the order of the 1st respondent dated
14.02.2025 suspending the license, until further orders, that had been granted
to the writ petitioner.
Facts
2. The petitioner is a private limited company. It procures milk from
milk producers, cooperative societies, and farmers in and around the Dindigul
District. The petitioner markets the milk under the brand names of “RAAJ
Milk” and “Malabar Milk”. It has been benefited with a license under the
Food Safety and Standards Act (hereinafter referred to as the “Act”). It is a
food business operator (FBO). The services that it is entitled to provide are as
follows:
I.Manufacturing – dairy products and analogues of evaporated,
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concentrated milk, and cow milk;
(i)Manufacturing – standardized milk;
(ii)Toned milk;
(iii)Total toned milk;
(iv)Skimmed milk;
(v)Full cream milk;
(vi)Ghee;
(vii)Butter;
(viii)Milk powder and cream powder;
(ix)Butter milk;
(x)Chhana and Paneer;
(xi)Flavoured milk;
(xii)Fermented milk;
(xiii)Packaged drinking water other than mineral water;
(xiv)Khova based sweets;
(xv)Spiced butter milk and
(xvi)Food services.
II.Relabelling – Milk powder and cream powder
III.Trade and Retail – Distributor, Wholesaler and Retailer.
IV.Food Services – Club and Canteen.
V.Transportation like insulated refrigerated van / wagon and milk
tankers, etc,.
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3.The petitioner pleads, in and about March 2024, it participated in a
tender for the supply of ghee to Tirumala Tirupati Devasthanam (hereinafter
referred to as “TTD”). TTD also benefited the petitioner with a contract. As
per the contract, the petitioner was called upon to supply 10 lakh kgs of ghee
between 06.06.2024 to 30.10.2024. The petitioner supplied 4 tankers of ghee
on 04.06.2024. This supply did not face any issues. The issue that arose on
account of subsequent dispatches resulted in actions being initiated against it.
Suspension of FBO licence being one, which has resulted in the present writ
petition.
4.The petitioner dispatched 4 tanker loads of ghee on the following
dates:
(i)03.07.2024;
(ii)04.07.2024 and
(iii)09.07.2024 (2 tankers)
5.TTD rejected these consignments on 25.07.2024. Subsequently, it
issued a show cause notice to the petitioner, calling it to show cause as to
why the contract for the supply of ghee should not be cancelled. The
petitioner states that it has replied to the same and the matter is pending
consideration before TTD.
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6.The petitioner states the Executive Officer of TTD issued a public
statement on 23.07.2024 stating that the ghee supplied to TTD contains
vegetable fat and therefore, it had been rejected. Soon thereafter, on
27.07.2024, the Designated Officer for Dindigul visited the manufacturing
unit of the petitioner at Dindigul and collected samples of ghee and butter.
These samples underwent necessary tests. The reports dated 09.08.2024 and
22.08.2024 showed that the butter and ghee were not adulterated and they
conform to the standards.
7.Post the elections in Andhra Pradesh in May 2024, there was a
change in Government in the State of Andhra Pradesh. On 15.09.2024,
Hon'ble The Chief Minister of Andhra Pradesh gave a public statement
alleging that the ghee supplied to TTD contained animal fat. This statement
created a furer throughout the nation. Swinging into action, TTD lodged a
complaint with the Inspector of Police, East Police Station, Tirupati. The
police has also registered a complaint under Sections 274, 275, 316, 318(3),
318(4), 61(2), and 299 of Bharatiya Nyaya Suraksha Sanhita, 2023, read with
Sections 51 and 59(1) of the Food Safety and Standards Act, 2006.
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8.Additionally, an intimation regarding the quality of ghee supplied by
the petitioner was given to the 2nd respondent by the Director, Institute of
Preventive Health, Managalagiri, Andhra Pradesh. Acting on this intimation,
a show cause notice was issued on 20.09.2024 to the writ petitioner. The
following allegations were made in the said notice:
“*As per the information received in this Office
from The Director Institute of Preventive Medicine,
Mangalagiri (Andhra Pradesh), your firm M/s.A R
Diary Food Private Ltd bearing FSSAI Central
License No.10014042001610 at 10/5C, Madurai
Road, Begampur Post, Dindigul, Dindigul block,
Dindigul, Tamil Nadu – 624002 was one of the
suppliers of Ghee to Tirumala Tirupati
Devasthanam (TTD) since the last 4 years.
*Further as per the information, the Ghee
procurement committee of TTD has sent all the
samples supplied to TTD for testing to NDDB
CALF Lab at Anand, Gujarat.
*After analysis, the sample from your firm M/s.A R
Diary Food Private Ltd (FSSAI Central License No.
10014042001610 ) has failed to meet the
parameters and your firm has been blacklisted by
EO, TTD.”
9.The notice called upon the petitioner to show cause as to why its
license should not be suspended for the contravention of the provisions of the
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Act. The petitioner was given time till 23.09.2024 to issue a reply to the
same.
10.On the very next day, i.e., on 23.09.2024, the Central Food Safety
Officer caused an inspection of the premises of the writ petitioner. He
collected the following samples:
(i)Cow ghee brand RAAJ – 2 nos.
(ii)Cow ghee (loose) – 2 nos.
and sent them for analysis. He also prepared a report. The report states that as
there were allegations of the presence of external fat in the ghee, on the
directions of the 2nd respondent, the samples were collected. It was also noted
in the report that the following materials were sold to M/s.Sri Vyshnavi Dairy
Specialities Private Limited, Andhra Pradesh:
(i) 17445 kgs of ghee – lot T005 – 03.07.2024;
(ii) 16775 kgs of ghee – lot T006 – 04.07.2024;
(iii) 17520 kgs of ghee – lot T007 – 09.07.2024; and
(iv) 17850 kgs of ghee – lot T008 – 09.07.2024.
11.The sale to M/s.Vyshnavi Dairy were the very same lots sold to
TTD, which was rejected by it in July 2024. The inspection report further
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states that no external fat other than milk fat was found inside the premises at
the time of inspection. It also pointed out certain minor Schedule-IV non
compliance.
12.The report also found that the petitioner had purchased all the 8
consignments from M/s.Sri Vyshnavi Dairy Specialities Private Limited and
had supplied the same to TTD. The Central Food Safety Officer concluded
that the ghee was not prepared by the writ petitioner.
13.In reply to the show cause notice issued by the 2nd respondent, the
petitioner stated that they had received the cancellation notice from TTD
together with the report on the basis on which TTD had concluded that the
ghee was unfit for being processed by it. It was asserted that before the
supply was made by them to TTD, the petitioner had obtained a confirmation
from an NABL-accredited lab that the ghee supplied complied with the
requirements of AGMARK and FSSAI standards. The test reports were also
furnished to the 2nd respondent along with the reply as enclosures.
14.It was further stated that all the samples collected from the premises
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of the writ petitioner on 27.07.2024 by the Designated Officer of Dindigul
were tested, and a report was submitted that the samples comply with the
requisite standards. Therefore, they sought for the dropping of the
proceedings.
15.Subsequently, on 27.09.2024, another show cause notice was issued
to the petitioner stating that the petitioner has committed the following
violations:
(i)False information regarding manufacture of ghee;
(ii)Supplies compromising quality parameters; and
(iii)Misleading certification and claims.
16.In the said show cause notice, the Central Licensing Authority
called upon the petitioner to produce the following documents:
(i)Tender notice by TTD and tender application issued by TTD;
(ii)Tender agreement;
(iii)Procurement agreement between the petitioner and M/s.Sri
Vyshnavi Dairy Specialities Private Limited;
(iv)Certificate of analysis;
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(v)Manufacturing details; and
(vi)Details regarding the procurement of raw materials, production and
supply of ghee, namely:
Sl.N Documents Required
o
1 List of supplier of milk, butter and ghee for your premise
2 Month wise procurement details of ghee, butter and milk for the
year 2024
3 Month wise production details of ghee, butter and milk for the
year 2024
4 List of buyers of ghee, butter and milk (month wise data)
5 Month wise supply / sale details of ghee, butter and milk for the
year 2024
6 Month wise stock details of ghee, butter and milk for the year
2024.
17.It was further directed that the petitioner should immediately stop
distribution of manufactured ghee and, inform its distributors, wholesalers
and retailers not to proceed with further sale of the product, until further
directions, from the Central Licensing Authority.
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18.The petitioner approached this Court by way of a writ petition in
W.P.(MD).No.23551 of 2024. After hearing the petitioner and the 1st
respondent herein, this Court ordered the writ petition on 03.10.2024. This
Court noted that the show cause notice dated 27.09.2024 was bereft of any
details and sufficient time had not been granted to reply to the same. The
learned Additional Solicitor General representing the respondent submitted
that a supplementary notice will be issued to the petitioner within three days.
Recording the same, the writ petition was disposed of.
19.In the meantime, before the writ petition was taken up for hearing,
the 1st respondent had issued a notice dated 30.09.2024, in more or less
identical terms, as the notice dated 27.09.2024, but with a deletion on the
direction with respect to the stoppage of manufacture and supply of ghee.
Hence, the bar to manufacture, distribution & sale of ghee lasted between
27.09.2024 and 30.09.2024.
20.Pursuant to the order of the Court on 08.10.2024, the respondent
issued a notice titled “improvement notice”. The notice invoked Section 32 of
the Act and Regulation 2.1.8(4) of the Food Safety and Standards (Licensing
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& Registration of Food Businesses) Regulation, 2011. The notice also gave
the details of the provisions of the Act and Regulations that had not been
complied with, grounds for issuing the improvement notice, and reiterated the
demand for the aforementioned documents.
21. The petitioner issued a reply on 22.10.2024, inter alia, stating as
follows:
(i)There is no adulteration in the ghee supplied by it;
(ii)The issue relating to the supply by the petitioner of the ghee
manufactured by M/s.Sri Vyshnavi Dairy Specialities Private Limited, as if it
were their own, is a subject matter of show cause notice issued by TTD and
investigation by the SIT formed by the Supreme Court, and hence, the issue
may be deferred;
(iii)The purchase of ghee from M/s.Sri Vyshnavi Dairy Specialities
Private Limited and sale to TTD does not fall within the provisions of Section
32 and that the rejected ghee had been returned to M/s.Sri Vyshnavi Dairy
Specialities Private Limited;
(iv)As no violations of the conditions of license were found, there is no
scope for improvement notice under Section 32, and the consequential
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proceedings under Section 32 of the Act and Regulation 2.1.8(4) cannot be
invoked;
(v)As the ghee had been rejected by TTD, there is no danger to public
health and therefore, Regulation 2.1.8(4) also is inapplicable;
(vi)The grounds set forth in the show cause notice, at best, relate to the
violation of the Act and not violation of the Regulations. The petitioner
conceded that the allegations might attract penalty and criminal prosecution,
but not suspension of license;
(vii) In respect of the past transaction, there is no question of
application of Section 32 as there is no violation of the Regulations;
(viii) Finally, the samples that had been lifted from the manufacturing
unit of the petitioner cleared the requisite tests, and therefore, the petitioner is
not liable to be proceeded against.
22.Having received this response, a further notice was issued by the
Central Licensing Authority on 07.11.2024. This too was replied on
21.11.2024. On consideration of these issues, the impugned order came to be
passed on 14.02.2025, suspending the license of the petitioner until further
orders. Aggrieved by the same, the present writ petition.
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Chronology of events
23. Considering the complexities and technicalities involved in the
circumstances leading to the present writ petition, the following table
reiterating the facts in a chronological manner becomes necessary for the
proper understanding of the matter:
Date Event
March The petitioner participated in a tender for the supply of 10
2024 lakh kgs of ghee to TTD. The petitioner was successful and
consequently entered into a contract with TTD for the
supply of the said quantity of ghee between 06.06.2024 to
30.10.2024.
23.07.2024 The Executive Officer of TTD issued a public statement
claiming that the last four consignments of ghee supplied by
the petitioner to TTD between 03.07.2024 and 09.07.2024
contained vegetable fat and, therefore, had been rejected.
25.07.2024 TTD issued a show cause notice to the petitioner as to why
the contract for the supply of ghee should not be canceled.
27.07.2024 The Designated Officer of Dindigul visited the
manufacturing unit of the petitioner at Dindigul and
collected samples of ghee and butter for the purpose of
testing.
09.08.2024 The test report of the samples collected by the Designated
and Officer showed that the ghee and butter were not
22.08.2024 adulterated.
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20.09.2024 Based on information received from the Director, Institute
of Preventive Health, Managalagiri, Andhra Pradesh that the
ghee supplied by the petitioner to TTD did not meet the
requisite FSSAI standards and that the same was
consequently rejected by TTD, the Central Designated
Officer, Chennai issued a show cause notice calling upon
the petitioner to show cause as to why its license should not
be suspended for contravention of the provisions of the Act.
21.09.2024 The Central Food Safety Officer conducted an inspection of
the premises of the petitioner. The Officer collected samples
of T007 and T008 (consignments supplied to TTD on
09.07.2024) for testing. In the inspection report, the Officer
found that there were no other external fat other than milk
fat found inside the premises. The Officer, in the report, also
found that the eight consignments of ghee supplied by the
petitioner to TTD were procured from Vyshnavi Dairy.
22.09.2024 The petitioner issued a reply to the show cause notice dated
20.09.2024. The petitioner maintained that the ghee
supplied to TTD was supplied after obtaining a confirmation
from an NABL-accredited lab that the ghee complied with
the FSSAI and AGMARK requirements. Further, the test
report of the Designated Officer dated 09.08.2024 and
22.08.2024 also confirms that the ghee did not fall short of
the standards required under the Act.
23.09.2024 The FSSAI authorities conducted an inspection of the
premises of Vyshnavi Dairy and found that they don’t have
a manufacturing unit of ghee and also other non-
compliances.
27.09.2024 The Central Designated Officer issued another show cause
notice alleging the furnishing of false information regarding
the manufacture of ghee and compromising on quality
parameters by the petitioner. The Officer required the
petitioner to furnish certain other documents and directed
the petitioner to immediately stop the distribution and sale
of its manufactured ghee.
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30.09.2024 The Central Designated Officer issued a show cause notice
identical to the one issued on 27.09.2024. However, the
direction relating to the stoppage of the distribution and sale
of the manufactured ghee was omitted.
03.10.2024 The Madras High Court passed an order in W.P. (MD) No.
23551 of 2024 wherein it noted that the show cause notice
issued on 27.09.2024 did not contain sufficient details and
that adequate time had not been granted to the petitioner to
reply to the same. Recording the undertaking made by the
Additional Solicitor General that a supplementary notice
would be issued within 3 days, the writ petition was
disposed of.
08.10.2024 An improvement notice was issued by the Central
Designated Officer invoking Section 32 of the Act r/w.
Regulation 2.1.8 (4) of the Food Safety and Standards
(Licensing and Registration of Food Business) Regulation,
2011. The notice listed out the provisions of the Act and
Regulations not complied with and also stated the grounds
for non-compliance, and demanded certain documents.
22.10.2024 The petitioner issued a reply maintaining the ghee supplied
to TTD had cleared the requisite tests and that the petitioner
had not engaged in any contravention of the Act.
07.11.2024 Since the petitioner had issued the reply on 22.10.2024
without annexing the requisite documents, another
improvement notice was issued.
21.11.2024 The petitioner sent a reply to the improvement notice dated
07.11.2024, along with certain documents as enclosures.
14.02.2025 The Central Designated Officer passed the impugned order
suspending the license of the petitioner for non-compliance
of the provisions of the Act and the Regulations.
Arguments of the parties
24.I heard Mr.V.P.Raman for Mr.K.Krishna for the petitioner and
Mr.S.Arunnithy for the respondents.
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25.Mr.V.P.Raman argued as follows:
(i)Though an alternate remedy is available under Section 34(4)
(c) of the Act, a writ petition is still maintainable as the impugned
order violates the fundamental right of the petitioner and is in excess of
the jurisdiction vis-à-vis the powers vested in the respondents;
(ii)He urges that the show cause notices dated 08.10.2024 and
07.11.2024 pertain only to ghee and not to any other food product, but
the impugned order had suspended the license in its entirety and that
too, without a show cause notice, and therefore is in violation of
principles of natural justice;
(iii)He pleads that indefinite suspension of business activities
literally amounts to cancellation of the license, and hence traverses
beyond the show cause notice and is disproportionate;
(iv)The 2nd respondent had by-passed the procedure under
Section 32 and therefore, had exceeded its jurisdiction;
(v)As there is a gross violation of the procedure contemplated
under Section 32 of the Act, the writ petition is maintainable;
(vi)In addition to all the aforesaid points, he adds as a question
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of law pertaining to jurisdiction of the 2nd respondent to issue a show
cause notice is involved, a writ is maintainable.
26 .On the merits of the impugned order, he urges
I) There is a violation of Section 32 of the Act. The plea being, in terms
of Section 32, a license can be suspended only when any of the two
circumstances exist:
(i)Failure to comply with the improvement notice; or
(ii)In the interest of public health.
II) He pleads that there is a clear difference between an improvement
notice and a show cause notice under Section 32. Show cause notice is
referable to Section 32(3) deals with cancellation of the license. He relies
upon the judgment of this Court in the case of K.Karupanan Vs. The District
Collector and ors. in W.P.(MD).Nos.15336 of 2022, in order to substantiate
this plea.
III) He also urges that there has been a serious violation of Section 40
of the Act, and therefore, no reliance can be placed upon the complaint
lodged by TTD. Hence, he pleads the writ petition be allowed and the order
be quashed.
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27.Per contra, Mr.S.Arunnithy, urges as follows:
(i)The order impugned is appealable under Section 32(4)(c),
hence, the writ petition is not maintainable;
(ii)The show cause notices and improvement notices were issued
to the petitioner, and after giving sufficient opportunity to the
petitioner, the suspension order came to be passed, and therefore, there
is no violation of the principles of natural justice requiring the
interference by this Court.
(iii)He urges that the improvement notices were issued invoking
Section 32 of the Act on the following grounds:
(a)Unauthorised sale of ghee to Vyshnavi Dairy;
(b)False information regarding supply;
(c)Misbranding huge quantity of ghee;
(d) Non-disclosure of material facts;
(e)Unfair trade practice; and
(f)Failure to submit documents as sought for by the
authorities.
He states (a) to (f) above attract Sections 23, 24(2), 26(1), 26(2)(v),
27(1), 28 and 31 of the Act. He requests the Court to read the same
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along with the Food Safety and Standards (Licensing and Registration
of Food Business) Regulation, 2011, and Schedule-II Annuxure-III of
Conditions of License, and Regulations 10(1) and 10(2) of the Food
Safety and Standards (Labelling and Display) Regulations, 2020.
28.Expanding further, Mr.S.Arunnithy submits that the petitioner had
failed to give the following details:
(i)Date of manufacture of ghee;
(ii)Traceability of ghee supplied to Vyshnavi Dairy;
(iii)Vehicle transportation information;
(iv)Certificate of analysis;
(v)Business transactions between M/s.Sri Vyshnavi Dairy
Specialities Private Limited and the petitioner.
Hence, the suspension of the licence is a valid exercise of power.
29.Inviting the attention of this Court to the judgment of the Supreme
Court in Centre for Public Interest Litigation Vs. Union of India and
others, [(2013) 16 SC 279], he argues that the Act and Regulations have to be
incorporated to enforce Article 21 of the Constitution of India. Therefore, the
right under Article 19(1)(g) should be read subject to Article 21 of the
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Constitution of India.
30.On the issue of proportionality, the response of Mr.S.Arunnithy is
that under Regulation 2.1.8(1) of the Licensing Regulations, the licensing
authority has the power to suspend “all or any” of the activities of the food
business operator. The authority had decided all of the petitioner's activity
deserved to be suspended for the aforesaid violations. Therefore, the
impugned order does not suffer from any vice. He argues there is no violation
of Section 40 of the Act, and there is a failure on the part of the petitioner to
comply with Section 28(2) of the Act, and therefore, the impugned order is
perfectly justified.
31.I have carefully considered the submissions on both sides and I have
gone through the records.
Brief Survey of the relevant Provisions of Food Safety and Standards
Act, 2006
32.Prior to the enactment of this Act, there were several legislations
which dealt with the manufacture, distribution, retailing, consumption, and
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sale of food products. These legislations were repealed under Section 97 read
with Schedule II of the Act. A comprehensive legislation regulating the
aforesaid aspects was contemplated since 1988, but it fructified only in 2006.
The Act is a consolidating and comprehensive piece of legislation relating to
food. It lays down scientific standards for food articles and regulates the
manufacture, storage, distribution, sale, and use of food products for human
consumption.
33.As per Section 31(1) of the Act, no person is entitled to commence
or carry on a food business except under a license. As per Section 31(3), any
person desirous of carrying on a food business has to apply for a license to
the Designated Officer. The Designated Officer, under Section 31(4), is
entitled to either grant the license or reject the same. The proviso to the said
Section enables a person to commence a food business, in case, the
application seeking license is not disposed of within a period of 2 months
from the date of filing of the application.
34. Section 32 of the Act contemplates issuance of a notice termed 'an
improvement notice'. This notice is defined in Section 3(10) of the Act. An
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improvement notice is issued, if the Designated Officer, has reasonable
grounds to believe that the FBO has failed to comply with any regulation
issued under the Act. An improvement notice must state the following:
(i)The grounds for believing that the FBO has failed to comply with
the regulations;
(ii)Specify matters which constitute the FBO's failure to comply;
(iii)State that the FBO should take steps to secure compliance;
(iv)Measures that have to be taken by the FBO within a time period not
less than 14 days.
35.Under Section 32(2), in case, the FBO fails to comply with the
improvement notice, her / his license is liable to be suspended. If the defects
pointed out in the improvement notice persist, the Designated Officer is
entitled to cancel the license granted. He can do so, after issuance of a show
cause notice, to the FBO. Proviso to Section 32(3) empowers the Designated
Officer to suspend or cancel the license forthwith in the interest of public
health. Under such circumstances, the Designated Officer need not resort to
procedure of issuance of an improvement notice and may proceed straight
away to suspension. An appeal is maintainable under Section 32(4) against
the issuance of the improvement notice or refusal to issue a certificate as
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regards the rectifications made pursuant to improvement notice or against the
order suspending or cancelling the license.
Maintainability of the writ petition
36.The preliminary objection that has been raised is that this writ
petition is not maintainable as there is an effective and alternate remedy
under Section 32(4) of the Act. Before proceeding to the merits of the case, I
have to recollect certain principles, on the basis of which, this Court had to
look at this issue.
37.The power to issue writs was vested with this Court, much before
the adoption of the Constitution of India, by the actual sovereign namely, the
people of India. The nation established the political sovereign the
Constitution of India. This, in turn created the institutional sovereigns viz. the
legislature, the executive, the judiciary, and other Constitutional organs. The
power to issue writ petitions, though founded in English jurisprudence,
obtained statutory recognition under the Specific Relief Act, 1877. As per
proviso (d) to Section 45 of that legislation, the High Court, prior to issuing a
writ, had to come to a conclusion that the applicant had no other specific and
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adequate legal remedy. This provision was inserted to prevent persons from
approaching the High Court directly without exhausting the remedy available
to them, under other statutes.
38. Under the Regulating Act of 1773, the Supreme Court was created
in Calcutta. Under Clause IV of the Charter of 1774, the Supreme Court at
Calcutta was given “such jurisdiction as the Court of King's Bench may
lawfully exercise in England”. This included the power to issue prerogative
writs. Insofar as the presidency of Madras is concerned, Recorder court which
was existed at the Fort St. George was replaced by the Supreme Court of
Judicature through the Madras Charter of 1800. Clause 47 of the said Charter
reproduced Clause 21 of the Calcutta Charter and enabled the Supreme Court
at Madras to issue Writs. Similarly, through clause 13 of the Bombay Charter
of 1823, the Supreme Court of Bombay was empowered to issue prerogative
writs.
39. With the abolition of the Supreme Courts and creation of the High
courts under the Indian High Courts Act of 1861, the powers which were
vested with the Supreme Courts, stood transferred to the High Courts. This
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becomes clear from a casual glance of Section 9 of the Indian High Courts
Act of 1861. Under this Act, Charters were issued by her Majesty in England
and three Charter High Courts were created at Calcutta, Madras and Bombay
were created. Therefore, these Courts continued to issue writs as their
predecessors, the Supreme Courts and earlier, the King's Court in England. It
was under 1877 Specific Relief Act that the restrictions as cited above were
brought in.
40. The power of High Courts under Section 9 of the High Courts Act,
1861 was more or less reproduced under Section 106 of the Government of
India Act, 1915 and by Section 223 of the Government of India Act, 1935.
Apart from this restriction, Section 45 also imposed limitation that the High
Court of Calcutta, Madras and Bombay. They could not issue Writs of
Prohibition and Certiorari or any other order deciding the legality of
proceedings outside of their Original Civil jurisdiction. (For an expansive
understanding see, Ryots of Garabandho v. Zemindar of Parlakimedi, AIR
1943 PC 164).
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41.I shall slightly digress here to speak about the Writ of Habeas
Corpus also. The three High Courts of Charter at Fort William, Madras and
Bombay were statutorily empowered under Section 491 of the Cr.PC of 1898
to issue writs of Habeas Corpus, within the limits of their ordinary original
civil jurisdiction. This Section was enlarged by the Criminal Law
Amendment Act, 1923. Power to issue writs of Habeas Corpus was conferred
on all the High Courts in the British India and territorial limitation placed by
Section 491 was removed. It removed the bar that was placed by the 1898 Act
for issuance of writs only within the limits of the ordinary original civil
jurisdiction of the three Charter High Courts. By virtue of the 1923
amendment, the Cr.P.C empowered the High Courts to issue writs or
directions over any person or authority within their appellate criminal
jurisdiction, thereby expanding the power to issue writs to the remaining
province or provinces over which the High Court had authority.
42.With the advent of the Constitution of India, this power found
Constitutional recognition under Article 226. The power under Article 226 is
not confined only to the well-known five writs of Certiorari, Mandamus,
Prohibition, Habeas Corpus, and Quo Warranto. It enables a High Court to
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issue such writs to suit the circumstances which arise before it.
43.Yet, the limitations developed during the colonial era continue to
haunt the Constitutional Courts even today. The limitations which were found
under the Specific Relief Act, 1877, have, unfortunately, been adopted even
after India, i.e., Bharat became a Republic. History shows it was initially
imposed by a statute, which thereafter became self-imposed, though no such
limitations are found under Article 226 of the Constitution. The bar
developed during colonial era exists in our Constitutional jurisprudence even
after 75 years of independence.
44.The reason for enforcing an alternate remedy was that a party's
grievance would be readily addressed, if he/she resorted to the said remedy.
The purpose being the litigant find a solution to the problem that he faced at
an early date. The development of alternate remedy as a bar to the issuance of
writ petitions was not because the court was not ready to resolve the issue but
in order to enable the party to get an early solution to her problems. This
shows that the approach of the court should litigant friendly and litigant
centric and not one to shirk off its responsibility to decide an issue.
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45.Be that as it may, the existence of an alternate remedy as a bar to the
issuance of a writ is only a self-imposed one. For the mere fact that an
alternate remedy exists, a Constitutional Court need not turn the party away
from its doors. Certain exceptions have been carved out by the Constitutional
Courts, whereunder the Courts, would not be necessarily prevented from
issuing a writ, despite the existence of an alternate remedy. They are:
(i)Breach of fundamental rights;
(ii)Violation of principles of natural justice;
(iii)An order issued by an authority who has no jurisdiction or is
suffering from an excess of jurisdiction;
(iv)Challenge to the validity of a statute or a delegated legislation.
46.A distinction has to be made with regard to ‘entertainability’ and
‘maintainability’ of writ petitions. The fact that there is an alternate remedy
does not mean that writ petition is not maintainable. Having come to a
conclusion that the writ petition is maintainable, does not mean that, the
Court should come to the conclusion that the writ is entertainable. The Court
should examine whether any of the exceptions that have been carved out by
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the Constitutional Courts apply to the facts of the case. If they do, the Court
need not turn the party away. When facts are not in dispute and no factual
allegation needs to be examined in detail, a writ petition can certainly be
maintained and entertained. For the aforesaid propositions, I rely upon the
judgments of the Supreme Court and of this Court in the following
chronological order:
(i)Hindustan Petroleum Corporation Limited Vs.
Geeta Kasturirangan and another, [(2010) 4 MLJ 255];
(ii)Assistant Commissioner of State Tax and others
Vs. Commercial Steel Limited, [(2022) 16 SCC 447]; and
(iii)Godrej Sara Lee Ltd., Vs. Excise and Taxation
Officer cum Assessing Authority and others, [(2023) SCC
OnLine SC 95].
47.Even in the judgment, referred to by Mr.S.Arunnithy, in Samsung
India Electronics Pvt Ltd Vs. State of H.P and others, [(2017) 102 VST 78],
a Division Bench of the Himachal Pradesh High Court pointed out that if the
High Court is satisfied that the alternate remedy is adequate or suitable, only
then it should refuse to exercise the jurisdiction under Article 226. However,
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the Bench added that a Court may issue writs if it comes to the conclusion
that there is a breach of principles of natural justice or a procedure that is
required be followed to arrive at a decision had not been followed. Hence, I
am not going to reject the writ petition at the threshold holding that the writ
petition is not maintainable. As will be seen latter, the papers reveal that this
case involves violation of principles of natural justice as well as
interpretation of the FSSAI Act and General Clauses Act. Hence, it will not
be appropriate to direct the petitioner to avail alternate remedy.
Statutory violations committed by the Petitioner and the Respondents
48.Before attempting to understand if the procedure adopted in
suspending the license of the petitioner by the respondents meets the
procedural requirements contemplated under the Act, the Court must first
proceed to evaluate the conformity of the actions of the parties with the
mandates of the Act and the Regulations framed thereunder. This becomes
necessary to understand the legality of suspension and the procedure for
suspension adopted in the present case.
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A. By the Respondents
49. Since I have already discussed the scope of Section 32 of the Act,
to address the statutory violations committed by the Respondents, I will now
turn my attention to the Rules.
50. In exercise of the powers conferred under Section 91 of the Act, the
Central Government framed the Food Safety and Standard Rules of 2011.
Under Rule 2.1.2, the State Government has been called upon to appoint a
Designated Officer. Rule 2.1.2(2)(v) enables the Designated Officer to
suspend, cancel or revoke the license of a FBO, when the said authority
notices, any threat or grave injury to the public, as noticed in the report of the
food analyst. The notices dated 20.09.2024, 27.09.2024 and 30.10.2024 point
out that the respondents relied upon the report of the food analyst, namely,
the NDDB CALF Lab, Gujarat, procured by TTD.
51.Under Section 40 of the Act, a purchaser of a food article is entitled
to get the food article analyzed by a food analyst. 40(1) has two provisos. The
first proviso being that the purchaser should inform the FBO, at the time of
purchase, that he intends to have the food so analyzed. There is no dispute
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that in this case, at the time of entering into the agreement for the supply of
ghee, the purchaser – TTD had stipulated that it will analyze the ghee that it
purchases. Under Section 40(2), the food analyst owes a duty to inform the
Designated Officer, if he finds that the sample sent for analysis by the
purshaser, contravenes the provisions of the Act and Rules. This procedure
was not followed in the present case at all.
52.On the admitted case, TTD had sent the samples to the NDDB-
CALF to find whether the samples were in compliance with the standards set
out in the agreement, Act, and Regulations. NDDB-CALF analyzed the ghee
and came to the conclusion that it does not meet the requisite standards. Yet,
NDDB-CALF never informed the Designated Officer nor the FBO about
such failure.
53.The reason why such reporting is mandated is because if the “food
analyst” finds a failure as aforesaid, under Section 42(3), the Designated
Officer must decide whether the contravention is punishable with
imprisonment or fine alone. In the case of contravention punishable with
imprisonment, the Designated Officer must send his recommendations, within
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fourteen days, to the Commissioner of Food Safety for sanctioning
prosecution. Further, the Act also contemplates a situation under Section
46(4) enabling the person aggrieved by the report of a food analyst to prefer
an appeal to the Designated Officer. The Designated Officer can then take a
call whether to refer the matter to a referral food laboratory, notified by the
Food Authority, under the Act for its opinion.
54.Applying this provision to the facts of the present case, NDDB
CALF Lab, having come to the conclusion that the ghee sample sent by TTD
failed to comply with the requirements of the Act, it should have informed the
concerned Designated Officer, who could have proceeded under Section 42.
This was not done. The report was also not communicated to the FBO, which
could have enabled the FBO to prefer an appeal to the Designated Officer.
This crucial procedure was violated in the present case. The petitioner is
sought to be condemned on the basis of the report of the NDDB CALF Lab,
which was never put to the notice of the petitioner by the respondents but was
intimated only by the purchaser / TTD.
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B. By the Petitioner
55.On the admitted facts, the petitioner is not a person without
blemishes. The petitioner has committed the following statutory violations:
(i) Furnishing false information: The petitioner has contravened
Sections 26(1), 26(2)(v) and 27(1) of the Act. In the warranty
certificate submitted by the petitioner to TTD, the petitioner had
specifically mentioned the name of the manufacturer as “M/s. A.R.
Dairy Food Private Limited, Dindigul” and had provided its own
address. However, later, during the inspection by the Central Food
Safety Officer and the officials of the FSSAI and from its reply to the
notices, it took a stand that the ghee supplied to TTD was
manufactured by Vyshnavi Dairy and not by it. This shows it had
falsely claimed to be the manufacturer under the warranty certificate. In
fact, on 21.09.2024, when the premises of the petitioner was inspected
by the Central Food Safety Officer, the petitioner itself submitted a
self-declaration that the ghee supplied to TTD was purchased from
Vyshnavi Dairy. The said statement was also adopted by the petitioner
in its reply dated 22.10.2024;
(ii) False information constituting misbranding: The petitioner
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has contravened Sections 26(1), 26(2)(ii) and 27(1) of the Act r/w.
Section 3(1)(zf)(A)(i) of the Act.
(iii) The petitioner, knowing very well that the ghee has been
procured from Vyshnavi Dairy, has stated in the warranty certificate
that the ghee has been manufactured by it. Therefore, when the ghee
was supplied to TTD, it was falsely claimed by the petitioner, in the
warranty certificate, that it was the original manufacturer. This was
clearly not the case. The petitioner, as admitted by itself later, clearly
knew that the ghee was procured from Vyshnavi Dairy, yet it chose to
represent that the ghee was manufactured by it. This clearly amounts to
misbranding according to the definition provided for the term under
Section 3(1)(zf)(A)(i);
(iv) Unauthorized sale/distribution: The petitioner has
contravened Section 31(1) of the Act r/w. Regulation 2.1.2 of the Food
Safety and Standards (Licensing and Registration of Food Business)
Regulation, 2011 and Section 63 of the Act. As noted previously, the
petitioner has obtained the ghee from Vyshnavi Dairy. However, in the
invoice issued to TTD, the petitioner declared itself as the
manufacturer. As far as the license granted to the petitioner is
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concerned, it only permits the petitioner to re-label milk powder and
cream powder. This shows that the petitioner had engaged in
unauthorised repacking/relabelling of the ghee procured from
Vyshnavi Dairy for it did not have any license under Section 31 of the
Act to do so;
(v) Non-compliance of the labelling requirements in case of
non-retail container: The petitioner has contravened Section 23 of the
Act r/w. Regulation 10(1) and 10(2) of the Food Safety and Standards
(Labelling and Display) Regulations, 2020. Though, according to the
petitioner, Vyshnavi Dairy was the manufacturer of the ghee, the name
of Vyshnavi Dairy was nowhere mentioned in the container, or was
pasted on the label, or in any of the invoices, or in any of the
accompanying documents. This is clearly contrary to Regulation 10
which mandates the statement of the name and address of the
manufacturer. Hence, the traceability of the ghee has been
compromised;
(vi) Failure to report rejection of the supplied ghee to the food
authorities: The petitioner has contravened Section 28 of the Act r/w.
Food Safety Standards (Food Recall Procedure) Regulation, 2017.
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According to Section 28 of the Act, if an FBO has reasons to believe
that a food which he has processed, manufactured or distributed is not
in compliance with the Act, or the Rules or Regulations, made
thereunder, he shall immediately initiate procedures to withdraw the
food in question from the market and consumers, indicating reasons for
its withdrawal and inform the competent authorities thereof. In this
case, the petitioner has failed to inform the concerned authorities about
the rejection of ghee by TTD. In fact, the petitioner had admittedly re-
sold the rejected ghee to Vyshnavi Dairy, when it had an obligation to
withdraw the rejected ghee from the market and inform the concerned
authorities. Therefore, the action of the petitioner is inconsistent with
the recall procedure envisaged under the Act and the Regulations;
(vii) Non-disclosure and traceability: The petitioner did not
furnish the agreement whereunder it had procured the ghee from
Vyshnavi Dairy, nor did it produce the certificate of analysis and
traceability records. This position prevailed, despite repeated requests,
from the respondents. This non-disclosure has compromised the
traceability of the source and final disposal of the ghee. Further, the
petitioner claims that the ghee was returned to Vyshnavi Dairy after the
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same was rejected by TTD. On this aspect, another fact has to be noted.
While Vyshnavi Dairy claims the rejected ghee was sold to a soap
manufacturer, the petitioner alleges, it was re-sent to TTD and accepted
by it. However, the petitioner has not furnished any records to prove
the same;
(viii) Unfair Trade Practice: Section 24(2) prohibits the sale,
supply, use and consumption of food through any unfair trade practice.
In this case, the petitioner, knowing fully well that the ghee in dispute
has been rejected by TTD for failing to meet the standards requisite
under the Act, and that it had an obligation under Section 28 to prevent
the sale and distribution of such food articles in the market, had re-sold
the same to Vyshnavi Dairy. Moreover, the petitioner also does not
have any record to prove that the rejected ghee was returned to
Vyshnavi Dairy other than a few invoices. Till now, the whereabouts of
the rejected ghee remains unknown. This clearly amounts to supply
through an unfair trade practice.
Suspension under Section 32 of the Food Safety and Standards Act, 2006
56.Now that there is a certain clarity in the violations committed by the
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petitioner and the respondents, this Court would now proceed to understand if
the suspension and the procedure adopted for suspension are permitted under
the provisions of the Act.
57.Section 32 of the Act deals with improvement notice. Clause (1) of
the provision empowers the Designated Officer to issue “an improvement
notice” if she/he “has reasonable ground for believing that any food business
operator has failed to comply with any regulations to which this section
applies”. When the Designated Officer has reasonable ground(s) to believe
so, he may issue an improvement notice:-
(a) stating the grounds for believing that the food business
operator has failed to comply with the regulations;
(b) specifying the matters which constitute the food business
operator’s failure so to comply;
(c) specifying the measures which, in the opinion of the said
Authority, the food business operator must take, in order to secure
compliance; and
(d) requiring the food business operator to take those measures,
or measures which are at least equivalent to them, within a reasonable
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period (not being less than fourteen days) as may be specified in the
notice.
58.A reading clause (1) shows that the Section only applies to violation
of Regulations that can be redressed or remedied by undertaking certain
measures suggested by the Designated Officer.
59.There is a difference between Rules and Regulations under the Act.
Rules are framed by the Central Government under Section 91. Section 32
does not deal with Rules but only with Regulations. The power to make
Regulations has been conferred on the Food Authority, namely, the Authority
constituted under Section 4 of the Act- See Section 3(m). The Food
Authority, with the prior approval of the Central Government and after
publication, is entitled to notify the Regulations. This power to frame
Regulations is traceable to Section 92 of the Act. Under Section 94 of the
Act, the State Government too is entitled to frame the Rules but the same is
subject to the powers of the Central Government and the Food Authority to
make Rules and Regulations respectively.
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60.A combined reading of section 32 & section 92 of the Act reveals
the entire scope of the provision is restricted to those violations of
Regulations, whose compliance can be effected, by mandating the FBO to
engage in certain improvement measures. However, when no such
improvement is possible or if the violations are of such nature that the
issuance of improvement notice would be redundant, then the Section need
not and cannot be invoked.
61.It must be noted that Section 32 does not cast an obligation on the
Designated Officer to issue an improvement notice in all the cases of
violation of Regulations. The word used in clause (1) is “may” as opposed to
“shall”. Therefore, it is sufficient if the Designated Officer issues an
improvement notice when the resultant violation can be rectified by
suggestions and consequent, implementation of certain corrective measures.
As the name indicates, improvement notice can be issued only when there is a
possibility for improvement.
62.Apart from the issuance of improvement notice, Section 32 also
contemplates the suspension and cancellation of the license granted to the
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FBO. Such suspension or cancellation can take place:
(a) if the food business operator fails to comply with the
improvement notice; or
(b) if the violation committed by the food business operator
endangers public health.
63.When the Designated Officer issues “an improvement notice”, he
must give a minimum of 14 days for the FNO to comply with the measures
specified therein. When such measures are not complied with within the
period stipulated in the improvement notice, the Designated Officer may
suspend the license of the FBO after giving him a reasonable opportunity of
being heard and for reasons recorded in writing in accordance with Section
32(2) r/w. Regulation 2.1.8 (1) of the Food Safety and Standards (Licensing
and Registration of Food Businesses) Regulations, 2011 [hereinafter referred
to as “the Licensing Regulations”]. Even after the suspension of license, if the
Designated Officer, pursuant to an inspection report, is of the opinion that the
defects are still not rectified or the measures specified in the improvement
notice are still not complied with, then she/he after giving the FBO an
opportunity to show cause as provided under Section 32(3) of the Act r/w.
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Regulation 2.1.8(3) of the Licensing Regulation may cancel the license of the
FBO.
64. The procedure contemplated for suspension and cancellation under
Section 32(2) and 32(3) of the Act r/w. Regulation 2.1.8(2) and 2.1.8(3) of
Licensing Regulations need not be complied with and such suspension or
cancellation can take place forthwith for reasons to be recorded in writing in
circumstances, where the protection of public health, assumes exigency. The
power of the Designated Officer to do so stems from the proviso to Section
32(3) r/w. Regulation 2.1.8(4) of the Licensing Regulations.
65.Now, it must be remembered that the suspension and cancellation of
license contemplated under Section 32 of the Act are predicated on the issue
of an improvement notice or on the existence of conditions that would
constitute a public health crisis. However, there can be situations that could
neither constitute a public health crisis nor could be remedied by the
implementation of certain corrective measures, but still could constitute a
violation of the Act and the Rules. In such cases, the issuance of an
improvement notice becomes a futile exercise. It is for this reason that a
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Single Judge of the Kerala High Court in the case of V.B. Muraleedharan
Vs. The Assistant Commissioner of Food Safety and Ors., [W.P. (C). No.
35151 of 2018, dated 12.04.2019] had held that the issuance of improvement
notice under Section 32 is only directory and not mandatory. The Court held:
“8. The further contention of the petitioner that an
improvement notice is liable to be served on the petitioner
before any action is taken against him is also not sustainable
in view of the clear language of Section 32. Section 32 is
clearly a directory provision and it is well within the power
of the designated office to decide, in a given case, whether an
improvement notice is liable to be served and an opportunity
granted to rectify the non compliance. As such, the non
serving of an improvement notice will not be a ground for
challenging an action taken by the designated officer on the
basis of a test report.”
66.The decision of the Single Judge was appealed before a Division
Bench. The Bench in V.B. Muraleedharan Vs. The Assistant Commissioner
of Food Safety and Ors., [W.A. No. 2030 of 2019, dated 22.01.2020]
affirmed the decision of the Single Judge and held:
“23.... issuance of improvement notice is only discretionary
and it cannot be said that in all cases of adulteration,
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misbranding etc., improvement notice has to be given.”
67.At this stage, I will refer to the judgment cited by Mr.V.P.Raman.
He relied upon a judgment of this court in K.Karupanan v. District Collector
and another, W.P.(MD).No.15336 of 2022 dated 14.07.2022 to urge that no
action can be initiated for suspension or cancellation without a notice under
Section 32 of the Act.
68.A Careful perusal of the Judgment shows that the business of the
writ petitioner therein had been shut down without even a show cause notice.
Hence, the learned Judge had held that if the authority seeks to invoke
Section 32, he necessarily has to comply with the principles of natural justice.
The judgment certainly does not lay down a proposition that Section 32 is
mandatory in all cases. Hence, it does not help the case of the petitioner.
69.I respectfully agree with the views of the Kerala High Court that
issuance of an improvement notice is only a directory provision. It has been
inserted in the Act to enforce compliance of the Regulations framed pursuant
to the Act, when such compliance could be enforced on the implementation
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of certain measures. However, when no such appreciable measures could
possibly be undertaken to bring the actions of the FBO (as in this case of
misbranding, unauthorised sale, etc.) more in alignment with the provisions
of the Act, improvement notice need not be issued as a routine statutory
measure. In this case, the authority had rightly issued show cause notices on
21.09.2024, 27.09.2024 and 30.09.2024. It was on account of the orders of
this Court in W.P.(MD).No.23551 of 2024 dated 03.10.2024, that these show
cause notices underwent a metamorphosis and became “improvement
notices”.
70.For instance, if the FBO engages in a sale not authorized by the
license issued under Section 31, then, in such situations, there could not be
any possible measure suggested or undertaken to rectify or improve the
unauthorized sale. These are transactions which are illegal ab initio as they
contravene Section 31(1) of the Act. They cannot be effectively addressed or
remedied through the issuance of an improvement notice. In these cases, the
non-issuance of an improvement notice cannot be faulted.
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71.Nevertheless, in such situations, the Designated Officer cannot
resort to the suspension or cancellation of license under Section 32(2) or
32(3) for the same are predicated on the issuance of an improvement notice
nor could he resort to such course of action under Proviso to Section 32(3)
unless the outcome of the unauthorized sale has resulted in a public health
crisis.
72.In the instant case, I am able to perceive that there has been an
“improvement” in the show cause notice stage by stage. Initially, on
20.09.2024, when the notice, was sent, there was only a report of the Director
of Preventive Health, Mangalagiri. In the second notice dated 27.09.2024, the
respondents sought to improve the same by introducing a new case altogether
of false information, misleading certification, and supply issues. When this
notice was put in challenge before the Court, the respondents conceded that
they will issue a supplementary notice. The supplementary notices issued on
08.10.2024 and 07.11.2024 were issued as “improvement notice” invoking
Section 32 of the Act r/w. Regulation 2.1.8(4) of the Licensing Regulations.
73.As noted earlier, an option is given to the respondents either to give
an improvement notice or proceed straight away for suspension, if the
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circumstances so demand. When Regulation 2.1.8(4) of the Licensing
Regulations deals with the suspension of license forthwith to protect public
health, without issuance of improvement notice; the same provision cannot be
used to issue an improvement notice. The respondents, having concluded that
a situation to suspend the license forthwith does not arise in the facts of the
case, should have stated what is the “improvement” that they seek from the
petitioner. Instead, the so-called improvement notice merely sets out the
provisions contravened by the petitioner.
74.The discussion earlier made would reveal that the “improvement
notices” issued in this case only set out the violations committed by the
petitioner. These violations include both the provisions of the Act and the
Regulations framed thereunder. When in terms of Section 32, no
improvement notice can be issued to address the violation of the provisions
of the Act, the improvement notices issued on 08.10.2024 and 07.11.2024
have been purportedly issued to address the same. Even if it is assumed that
the improvement notice can be issued to address and rectify the violations of
the Act, the violations committed in the present case by the petitioner,
including furnishing of “false information”, “misbranding”, “unauthorized
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sale”, “non-traceability” of the source of the supplied ghee and the
whereabouts of the rejected ghee, cannot be cured or rectified through the
issuance of an improvement notice, for there is no scope for improvement per
se. Though these are grave violations of the Act and Regulations when
viewed from the angle of supply of several thousand kilograms of ghee to a
religious institution such as TTD, they cannot be effectively addressed under
Section 32 of the Act, for the said provision can be resorted to only while
dealing with rectifiable violations of Regulations.
75.Further, the impugned order does not disclose as to how, for a
supply made in July 2024, an order passed in February 2025 can be treated as
one falling under the category “forthwith” under Regulation 2.1.8(4) of the
Licensing Regulations. “Forthwith” has been interpreted to mean “as soon as
may be”, (i.e.,) the action should be performed by the authority with
reasonable speed and expedition with a sense of urgency without any
unavoidable delay. See, Navalshankar Ishwarlal Dave and another v. State of
Gujarat and Others, 1993 Supp (3) SCC 754.
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76.Though the delay and procedure adopted by the Designated Officer
fails to meet the requirements of Section 32 of the Act and Regulation 2.1.8
of the Licensing Regulations, this Court cannot lose sight of the fact that the
Act attempts to protect the consuming public and preserve their right to
healthy and wholesome food, and their right to know the contents of the food
and other details of manufacturing. Such valuable rights cannot be put in
jeopardy just because Section 32 of the Act does not attempt to address the
violations such as the ones in the present case.
Harmonious interpretation of the fundamental rights
77.As pointed out in the previous paragraph, the Act attempts to
protect the right to healthy and wholesome food of the consumers, and their
right to know the details of preparation and manufacturing of the food. These
are not mere statutory rights but are rights which are readable into Articles 14
and 21 of the Constitution of India. In this background, misbranding,
unauthorized sale, etc., contravene not only the provisions of the Act, but also
the rights of the consumers under Articles 14 and 21 of the Constitution.
Furthermore, the Act, itself, under Section 18(1) declares that the authorities
functioning under the Act must endeavour to protect human life and health.
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78.At the same time, the food business operator also has a fundamental
right under Article 19(1)(g) to “ practise any profession, or to carry on any
occupation, trade or business”. This right can be only reasonably restricted
under Article 19(6) through a legislation enacted in the interest of the general
public. Moreover, the FBO's are also entitled to “equal protection of the law”
under Article 14 and their license can be suspended or cancelled only after
strictly adhering to the formalities stipulated under the Act. This is because
the Act envisages a situation which would fall under Article 19(6), a
reasonable restriction of their right to carry on a business in the interests of
the general public. Therefore, the procedure under Section 32 cannot be
partly omitted and partly followed to suit the whims of the Designated
Officer. It is true that the issuance of improvement notice is not mandatory.
However, the suspension and cancellation that entails the non-compliance of
the improvement notice under Section 32 cannot be isolated to effect
suspension or cancellation without issuing the improvement notice.
79.When the fundamental rights of the consumers and the FBO's are
pitted against each other, the Court must not find ways to determine which
rights would subdue the others. On the other hand, the Court must
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harmoniously read the seemingly conflicting fundamental rights and must
endeavor to provide a space for both under the Indian Constitution. After all,
this Country is known for its diversity of interests and competing aspirations.
The Constitution, like a mother, caters to all and leaves none in the agony of
disappointed hopes.
80.In the same spirit, this Court proceeds to address the facts of the
present case. In this case, the petitioner is alleged to have engaged in several
contraventions of the Act including furnishing of false information,
misbranding, unauthorized sale/distribution of ghee agreed to be supplied to
TTD, etc. For the said violations, it would be but a futile exercise to issue an
improvement notice under Section 32 for the said violations are incapable of
being rectified through the issuance of an improvement notice. Moreover, the
violations have arisen under a contract entered into between TTD and A.R.
Dairy Food Private Limited and there is no scope for A.R. Dairy Food Private
Limited to undertake any measures to remedy the violations that have taken
place. However, that does not mean that suspension could be effected through
a procedure consequent to the issuance of improvement notice. Section 32,
though directory, has to be interpreted strictly for it directly interferes with a
FBO’s right to carry on his business.
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81.Even so, the alleged violations committed by the petitioner are
grave and if true, they seriously infringe the consumers’ rights under Article
14 and 21. Though Section 32 has to be strictly interpreted, the Designated
Officer is not a powerless entity to address the violations committed by the
petitioner. To say that the FBO's cannot be denied equal protection of laws is
to also imply that they are still equal before law. It would be unfair to assume
and even more dangerous to interpret that only those who commit violations
of Regulations, which are capable of being rectified through an improvement
notice, can get their license suspended or cancelled. To let other
contraventions go scot- free would not only adversely affect the fundamental
rights of the consumers, but also would affect the FBO's right to “equality
before law” under Article 14.
Suspension of license under Section 31 of the Act read with Section 21 of
the General Clauses Act
82.The Designated Officer is not without power to suspend the license
of the petitioner for the violations of the FSSAI Act committed by it. After
all, Rule 2.1.2(2)(v) of the Food Safety and Standards Rules, 2011
[hereinafter referred to as “ the Rules” for the sake of brevity] reiterates that
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the Designated Officer shall have all the administrative powers including that
of suspension, cancellation and revocation of the license of a food business
operator, in case of, any threat or grave injury to the public. This power to
suspend a license is not only readable under Section 32, but also under
Section 31 of the FSSAI Act r/w. Section 21 of the General Clauses Act.
83.Section 31 of the Act deals with licensing and registration of a food
business. Section 31(1) states that no person shall commence or carry on any
food business except under a licence. This power to grant or refuse the
license is vested with the Designated Officer under Section 31(4). Now to
understand whether this power to issue license also includes the power to
rescind the license so issued, one must take into account Section 21 of the
General Clauses Act. Section 21 of the General Clauses Act reads as follows:
“Where, by any Central Act or Regulations a power to issue
notifications, orders, rules or bye-laws is conferred, then that
power includes a power, exercisable in the like manner and
subject to the like sanction and conditions (if any), to add to,
amend, vary or rescind any notifications, orders, rules or
bye-laws so issued”.
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84.Though Section 21 of the General Clauses Act clarifies that the
authority who is empowered to issue the license also has the power to rescind
the license so issued, its application is restricted to legislative and executive
actions. It was elucidated by the Supreme Court in the case of Indian
National Congress (I) v. Institute of Social Welfare, [(2002) 5 SCC 685]
that the power to rescind as a corollary of the power to issue cannot be
exercised, by virtue of Section 21 of the General Clauses Act, in case of,
quasi-judicial orders.
85.Therefore, one must first decide the nature of function performed by
the Designated Officer under Section 31 of the Act to ascertain the
applicability of Section 21 of the General Clauses Act. Here, it would be
pertinent to refer to the judgment of the Supreme Court in Orissa
Administrative Tribunal Bar Assn. v. Union of India, [(2023) 18 SCC 1] to
understand the nuances that distinguish a quasi-judicial function from a
legislative and executive function. In the said case, Justice Dr.D.Y.
Chandrachud, speaking for the Bench, held that a quasi-judicial function
would involve deciding two competing claims.
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86.In the case of grant of license under Section 31(4) of the Act, the
Designated Officer is not performing any quasi-judicial act, but is only
deciding if an application for grant of license made under Section 31(3) of the
Act should be granted or not. The same cannot be construed as an
adjudication of competing claims. Therefore, the issuance of license by the
Designated Officer under Section 31 is only an administrative action and not
a quasi-judicial one. This conclusion is fortified by the fact that the Act
contemplates a situation of “deemed licensing” under the proviso to Section
31(4). Such a deemed approval would not be possible, if the power to grant
licence were to be termed quasi-judicial.
87.Further, in Orissa Administrative Tribunal Bar Assn. case, it was
also held that for Section 21 of the General Clauses Act to apply, the
proposed action sought to be taken under Section 21 should not be repugnant
to the subject-matter, content and effect of the legislation, and should be
harmonious to the object and scheme of the legislation. In the present matter,
the Act not only empowers the Designated Officer to grant license to the food
business operator, but also empowers her/him to check the violations of the
Regulations committed by it. Under Section 32, the said Officer has the
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power to suspend or cancel the license to ensure the FBO’s compliance with
the Regulations framed to give effect to the provisions of the Act. Similar
provision is also found under the Rules.
88.Therefore, invoking Section 21 of the General Clauses Act to read
the power of cancellation and its complementing power of suspension into
Section 31 to address violations of the Act and those incapable of being
addressed through an improvement notice would not be repugnant to the
contents of the legislation. In fact, it would be in harmony with the object and
scheme of the legislation. The Act is structured and framed in such a way as
to regulate the registration and the activities of the FBO's in order to secure
the availability of safe and wholesome food to the people of this country. The
Act, as discussed previously, is not incongruent to the business interests of
the FBO's for it provides an opportunity to such operators to remedy the
rectifiable contraventions committed by them.
89.However, it should not be forgotten that the measures of suspension
and cancellation, though adverse, are not unknown to the Act. They can be
used as preventive and punitive measures under Section 32 to redress the
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violation of the Regulations that are framed to give effect to the provisions of
the Act. When such is the function they perform, it would not be
unreasonable to hold that the same powers can be read into Section 31 to
redress the violation of the Act itself. Therefore, the Designated Officer, in
this case, has the power to suspend the license of the petitioner for the
contravention of the provisions of the Act committed by it.
90.At this juncture, this Court makes it clear that the exercise of the
power of suspension and cancellation under Section 31 of the Act r/w.
Section 21 of the General Clauses Act cannot be unilateral or arbitrary. This
is because, even administrative actions, are not beyond the application of the
principles of natural justice. Law demands that before an order of suspension
is issued, the party must be put on notice and heard. This is a basic
compliance of the principles of natural justice. I need not refer to God and
Adam as has been done by the English Courts. Indian epics and history like
Ramayana and Mahabharatha are filled with incidents where repeated
opportunities were given to the delinquents to rectify themselves, and still,
when they did not do so, they were visited with punishment. In fact, in this
very city where this Court has been established, a king lost his life when
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questioned by Kannagi as to why he punished her husband to death without
adhering to the principles of natural justice.
91.Therefore, before passing an order of suspension or cancellation
under Section 31 of the Act r/w. Section 21 of the General Clauses Act, the
Designated Officer must hear the FBO who has allegedly committed a
violation of the provisions of the Act or the Regulations for whom an
improvement notice cannot be issued under Section 32. See, U.P. Avas Evam
Vikas Parishad Vs. Noor Mohammad, [2021 SCC OnLine SC 1266].
92.In fact, Regulation 2.1.8(1) of the Licensing Regulations makes it
mandatory to hear the food business operator before suspending his license
and stipulates that the order of suspension must be a reasoned order.
Likewise, the food business operator must be issued with a show cause notice
under Regulation 2.1.8(3) of the said Regulations before his license is
cancelled. Therefore, such an order relating to suspension or cancellation,
though made under Section 31 of the Act r/w. Section 21 of the General
Clauses Act, must be preceded by a notice and hearing and must be a
reasoned order.
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93.I cannot find a violation of lack of notices in the present case
altogether. The petitioner had been given as many as five notices by the
respondents on 20.09.2024, 27.09.2024, 30.09.2024, 08.10.2024 and
07.11.2024. To all the notices, it sent a reply. However, the petitioner was not
heard after a reply was submitted to the notices. Therefore, though suspension
of the petitioner’s license was done upon issuance of a notice, procuring a
written reply and through a reasoned order, since the petitioner was not heard
before the impugned order was passed, the exercise was not properly done.
This Court makes it clear that although the suspension of the license of the
petitioner is permitted by the Act, it was improperly done for the same was
not preceded by a hearing. Further, there yet remains an issue of
proportionality.
Principle of proportionality
94.Section 18 of the Act lays down the general principles that will
guide the authorities constituted under the Act at the time of implementation
of its provisions. Section 18(1)(c) and 18(1)(d), in particular, emphasize that
any measure that is taken in the interest of the public should be proportionate
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and not restrictive of the trade than is required to achieve an appropriate level
of protection. The Act, clearly, favours the principle of proportionality and
instructs the authorities constituted thereunder to be mindful of the same
while implementing the provisions. Therefore, even while exercising
discretionary powers under the Act and the Regulations framed thereunder,
the Designated Officer cannot act beyond the requirements of proportionality
95.Proportionality, as understood in common parlance, is like using a
sledgehammer to swat over a fly. In the present case, the records reveal that
the petitioner had received ghee from M/s.Sri Vyshnavi Dairy Specialities
Private Limited, Andhra Pradesh, and sent it to TTD as if it had manufactured
the ghee on its own. On rejection of the ghee by TTD, the petitioner resold it
to M/s.Sri Vyshnavi Dairy Specialities Private Limited, Andhra Pradesh. As
per Section 28, on being informed by TTD of the rejection of the supplied
ghee, the petitioner ought to have informed the competent authorities before
disposing of the ghee to M/s.Sri Vyshnavi Dairy Specialities Private Limited,
Andhra Pradesh. The Food Authorities in Andhra Pradesh inspected the
premises of M/s.Sri Vyshnavi Dairy Specialities Private Limited, Andhra
Pradesh and found it is not capable of having produced the amount of ghee
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that had been supplied to TTD. The annual report filed by the petitioner also
shows that the petitioner does not have the capacity to manufacture the huge
quantity of ghee required by TTD. Hence, the issue of traceability arose.
96.While the report that has been produced by Mr.S.Arunnithy shows
that the ghee that had been returned by the petitioner to M/s.Sri Vyshnavi
Dairy Specialities Private Limited, Andhra Pradesh had been sold to an
unknown soap manufacturer, the petitioner, in its reply, has taken a stand that
the ghee sent to M/s.Sri Vyshnavi Dairy Specialities Private Limited, Andhra
Pradesh found its way back to TTD and had been accepted by the latter. The
disposal of the ghee is as mysterious as the Bermuda Triangle. It is traceable
till the premises of the petitioner, and thereafter, it vanishes without a trace.
The petitioner cannot use the law to wish away the mistakes that had been
committed by it.
97.In the present case, the Designated officer vide the impugned order
has suspended the license of the petitioner with regard to all the activities for
which the license was granted to the petitioner concern under Section 31 of
the Act. Though she has recorded her reasons for doing so, the reasons for
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suspending “all” the activities for which the license was granted to the
petitioner relate only to the supply of misbranded ghee to TTD, and the
consequent unauthorized and untraceable distribution of the rejected ghee.
98.A reading of Regulation 2.1.8(1) of the Licensing Regulations
would alone reveal that the Designated Officer has the right to suspend the
license of the petitioner with respect to “all or any” of the activities for which
the license was granted. However, as noted earlier, the discretion of the
Designated Officer is subject to the principle of proportionality and cannot be
arbitrarily exercised.
99.The petitioner manufactures several products as listed above. Of all
those products, ghee alone has put the petitioner on a sticky wicket. The
respondents, in terms of Regulation 2.1.8 (1) of the Licensing Regulations,
had to decide whether the activities of the petitioner were so detrimental to
the public that the suspension of “all” the activities was necessary or whether
the suspension of the manufacture of ghee products was alone sufficient.
When the Act and Regulations call upon the respondents to decide on this
issue, failure on their part to consider this aspect necessarily requires this
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Court to interfere. Proportionality, being one of the fundamental principles in
the administration and exercise of powers, in case it has not been done, this
Court necessarily has to interfere. Yet, as per the Regulations, it is for the
Registration or Licensing Authority to take a call on it. In exercise of Article
226, this Court cannot normally substitute its reasoning in the place of the
statutory authorities and take a call on the nature of the suspension.
100.I also have to take note of the fact that the authority on 27.09.2024,
had suspended only the manufacturing activities of the petitioner relating to
ghee. Within a matter of three days, that order too was rescinded and the
petitioner was permitted to continue to exploit the license granted to it. All of
a sudden, it cannot be called upon to shut down all its business activities.
Such a course of action would not be proportional to the activities of
misbranding, furnishing of false information, etc. It will also adversely affect
about 13,000 vendors of the writ petitioner.
101.Further, the Court should also take note of the fact that the license
of the petitioner has been suspended until further orders. This again would
not be a measure proportionate to the contravention sought to be redressed.
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This is a specific case of supply under a contract. It is true that the ghee
supplied to TTD was misbranded and was later sold in a manner not
authorized by the license nor by the Act. However, when the Act favours
proportionality and corrective action, and allows the FBO's to apply for a
fresh license after three months post the cancellation of the existing license
(see, regulation 2.1.8.6). Hence, the indefinite suspension is clearly not a
proportional measure for it adversely affects the ability of the FBO to apply
for a new license after cancellation.
102.The purpose of the legislation is not to shut down the activities of
an FBO but to ensure that the product is wholesome and healthy, when it
reaches the consumers. By suspending it until further orders without giving
any reason to support the same, the fundamental right of the petitioner is
affected. This is more so, the respondents themselves suspended only the
manufacture of ghee and that too for a period of three days in September
2024. Therefore, while deciding the issue of suspension, the authority would
also fix the period for which the licence should be suspended, if such a
conclusion is arrived at.
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Decision
103.In the light of the above discussion, I pass the following order:
(i)The impugned order dated 14.02.2025 is set aside;
(ii)The matter is remitted to the file of the 2nd respondent;
(iii)The 2nd respondent shall decide, by way of a reasoned
order, whether to suspend the license of the petitioner for all the
activities, or for manufacturing, transportation and sale of ghee
alone;
(iv)The said exercise shall be completed within a period of
four (4) weeks from the date of uploading of the order on the
website of the Court;
(v)The arrangement made by this Court under the interim
order in W.M.P. No. 3310 of 2025 on 21.02.2025 will continue
till the 2nd respondent passes the order;
(vi) It is made clear the remand is limited.There is no
necessity for the respondents to issue a fresh show cause notice.
On the basis of the available materials and the report of the
NDDB (CALF) dated 08.02.2025 (which has come into
operation just prior to the impugned order) and after hearing the
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petitioner, the respondents shall decide the issue of suspension
of license;
(vii)It is also made clear that suspension of license as a
measure to redress the violations of the Act and the Regulations
made thereunder, is only an interim measure. The same cannot
be allowed to operate indefinitely. If at all the Designated
Officer arrives at an opinion that the license of the petitioner
should be suspended, since suspension is an interim measure, it
cannot be allowed to operate for a period more than six (6)
weeks. Within the said period, the Designated Officer may take a
decision on the cancellation of the license of the petitioner,
following the procedure established.
104.In the result, this Writ Petition is allowed. As the writ petition is
being allowed on a technical point, the petitioner has to bear the costs. The
petitioner shall also pay the cost of Rs.2,00,000/- (Rupees Two Lakhs Only)
to the 2nd respondent within 2 weeks from today. Consequently, the connected
miscellaneous petition is closed.
16.05.2025
krk/nl
Index : Yes / No
Internet : Yes / No
Neutral Citation : Yes / No
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To
1.Food Safety and Standards Authority of India,
Ministry of Health and Family Welfare,
2nd Floor, South Wing, Central Documentation Complex,
Chennai Port Trust Building, Rajaji Salai,
Chennai – 600 001.
2.Central Designated Officer,
Central Licensing Authority under
FSSI Act, 2006 (TN-03),
Southern Regional Office,
Chennai Port Trust Building,
Rajaji Salai, Chennai – 600 001.
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V.LAKSHMINARAYANAN, J.
krk / nl
16.05.2025
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