Dalmia Continental P. Ltd. vs Food Safety and Standards Authority of India

Heard the learned Senior Counsel appearing on behalf of the petitioner and the learned Counsel appearing on behalf of the respective respondents. By this petition which is filed under Article 226 of Constitution of India, the petitioner is seeking an appropriate writ, order and direction for inter alia striking down the impugned Note dated 23-4-2014 and the undated impugned directive - uploaded on respondent No. l''s website on 15-7-2014 - and also challenging decision dated 21-6-2014, rejecting the June consignment of the petitioner on the ground that the label does not conform to the Packaging and Labelling Regulations under Clause 2.2.2(2). The petitioner is also seeking an appropriate direction for release of the Canola Oil consignments, which are detained at JNPT since 26-1-2014 and 18-6-2014.

The case of the petitioner, in brief, is that the petitioner is an importer of Canola Oil which is manufactured in Canada and the petitioner is carrying on its business since 2007.

The grievance of the petitioner is that though in the past the petitioner was permitted to import the said Canola Oil and no objection was taken by respondent No. 1 - Food Safety and Standards Authority of India regarding consignments imported earlier by the petitioner, however, consignments imported in January, 2014 and June, 2014 have not been cleared. The petitioner is aggrieved by rejection of the said consignments, which has been done on the ground that the label does not conform to the Packaging and Labelling Regulations under Clause 2.2.2(2). The petitioner is aggrieved by the reasons given for not clearing the consignments and which are found on page 68 r/w page 65 of the petition, which is a letter dated 23-4-2014, addressed by respondent No. 1 to the Forum of Indian Food Importers.

Mr. Kevic Setalvad, learned Senior Counsel appearing for the petitioner, submitted that it is not the case of the Food Authority that the product which is being imported does not conform to the safety standards which have been laid down under the Food Safety and Standards Act, 2006 (for short, "the Act"). It is submitted that in a most arbitrary manner the petitioner is now informed that the label is defective. It is submitted that the label in fact is in compliance with the regulations. It is also submitted that the regulations prescribe that name of the product has to be mentioned. It is urged that in fact the label in terms mentions the name of the product, namely, Canola Oil. A detailed affidavit in-reply has been filed on behalf of the respondents. According to them, it was necessary not to clear the said consignments. It is urged by the learned Counsel appearing on behalf of the Food Authority that the said label does not conform not only to Clause 2.2.2(2) but also it is clearly contrary to the provisions of Section 22 of the said Act. It is submitted that the said product contains genetically altered ingredients and, therefore, the Food Authority, in order to safeguard the interest of consumers, has rejected the said consignments.

We have heard the learned Counsel appearing on behalf of the respective parties at length. We are of the view that in substance the only reason which has been given for rejecting the consignments is to be found on the website of respondent No. 1, which has been uploaded on 15-7-2014 and the same reads thus:

The Note which has been uploaded on the website of respondent No. 1 does not give any other reason for rejecting the consignments and, therefore, the submission made by Mr. Pracha, learned Counsel appearing on behalf of respondent No. 1 that it is in violation of Section 22 of the said Act or that it is not in conformity with the standards laid down by the Rules and Regulations framed under the said Act is without any substance. The Food Authority ought to have taken a sample, analysed the same and then point out in what way the sample is not in conformity with the specifications laid down under the said Act.

We have perused the label. We find that in fact the said label prima facie appears to be in complete conformity with the said clause and, therefore, in our view, the action of rejecting the said consignments is absolutely arbitrary. It is pertinent to note that in fact the very same Food Authority, after having rejected the consignment of January, 2014, had cleared consignment of the same product in April, 2014 and thereafter again in June, 2014 the consignment of the same product has been rejected. The action of the Food Authority, therefore, is arbitrary and is violative of Article 14 of Constitution of India. The said action is contrary to the provisions of the said Act and the Rules and Regulations framed thereunder. Hence a prima facie case is made out for grant of ad-interim relief. Ad-interim relief is granted in terms of prayer clauses (c) and (e).

We direct the Food Authority to clear the consignments which have been detained by them, subject to compliance of provisions of the other relevant Act, Rules and Regulations.

Place the matter for final disposal at the admission stage on 17-11-2014. At this stage, learned Counsel appearing on behalf of respondent No. 1 prays for a stay of this order for a period of four weeks. We are not inclined to grant the stay. However, to enable respondent No. 1 to approach the Apex Court, the operation of this order is stayed for a period of two weeks.