Relief for Nestle as NCDRC dismisses government’s plea against sale of Maggi noodles
In a significant development, the National Consumer Dispute Redressal Commission (NCDRC) has dismissed the government’s 2015 plea against the sale of Maggi noodles by Nestle India Ltd. The FMCG major announced this decision in a stock exchange filing on April 4, marking a victory for the company in a long-standing legal battle.
Key Details
• NCDRC rejects government appeal against Nestle India on unfair practices
• Complaint lodged in 2015, accusing Nestle of selling unsafe goods
• The government had demanded Rs 285 crore in compensation
The government’s plea, filed by the Union of India’s Department of Consumer Affairs in 2015, alleged that Nestle had engaged in unfair trade practices by manufacturing and selling hazardous and defective goods to the public through its Maggi noodles. The government was seeking compensation of Rs 284.55 crore and punitive damages of Rs 355.41 crore.
Nestle India revealed that the NCDRC’s order, dated April 2, 2024, dismissed the government’s complaint in favor of the company. The receipt of the order was acknowledged by Nestle on April 3.
Following this positive outcome, Nestle India’s shares on the Bombay Stock Exchange (BSE) closed trading nearly flat at Rs 2,551 apiece on April 4.
The legal battle dates back to June 2015 when Maggi noodles were banned across the country for six months due to allegations of containing chemicals beyond prescribed limits. Nestle had to recall and destroy 38,000 tonnes of Maggi noodles from retail shelves. However, the ban was relaxed in November 2015 after subsequent tests in India and abroad indicated the safety of Maggi noodles.
The government’s complaint came after the Food Safety and Standards Authority of India (FSSAI) took action against Maggi in 2015, citing high levels of lead in some samples and inadequate labelling of monosodium glutamate (MSG), commonly known as ajinomoto.
Despite initial bans and financial losses for Nestle, subsequent tests affirmed the safety of Maggi noodles, prompting the government’s complaint with the NCDRC. This marked the first instance of the Consumer Affairs Ministry invoking a provision in the nearly four-decade-old Consumer Protection Act to bring a company before the NCDRC.
In its petition, the government accused Nestle of misleading Indian consumers by promoting Maggi as a healthy food choice with its slogan ‘Tasty Bhi, Healthy Bhi.’ Despite the legal challenges, Maggi returned to store shelves five months after the initial ban, following clearance from government authorities.
