Rs. 640-crore class action suit filed by the Indian government against Nestle


New Delhi: The Rs. 640-crore class action suit filed by the Indian government against Nestle alleging unfair trade practices with regard to Maggi is scheduled to be heard by the apex consumer disputes forum on Friday, but the company expressed disappointment over the suit since the matter was sub judice.

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According to the media officer in the Department of Consumer Affairs, Rs.284.55 crore has been sought for unfair trade practice of selling defective and hazardous goods, and Rs.355.40 crore as punitive damage from Nestle at the National Consumer Disputes Redressal Commission (NCDRC).

“The department has filed this class action suit on behalf of the large number of consumers of Maggi in the country against Nestle India on the grounds of unfair trade practices, sale of defective goods and sale of Maggi Oats Noodles to the public without product approval,” he said.

“The punitive damages have been claimed on account of gross negligence, apathy, and callousness on the part of the opponent company.”

While Nestle in its latest statement expressed disappointment over the government’s action.

“We are disappointed with the unprecedented step of filing of a complaint before the NCDRC against Nestle India. It appears that the complaint makes similar allegations which were made to ban the product on 5th June 2015.”

These issues are awaiting judgment by the Bombay High Court, the company added.

Nestle also said, “We confirm that we do not add Mono-sodium Glutamate (MSG) in the manufacture of Maggi noodles.”

The company further added that MSG is one of several forms of glutamic acid found in natural foods such as groundnuts/peanuts, wheat flour, tomatoes and cheese.

“As we use some of these ingredients in Maggi noodles, the product will contain natural glutamic acid. We therefore strongly reiterate that the ‘No Added MSG’ statement on the product was not an attempt to mislead consumers.”

In recent months, over 2,700 samples of Maggi noodles were tested by several accredited laboratories in India and abroad. Each one of these tests have shown lead to be far below the permissible limits, said Nestle, who have had their presence in the country for over 103 years.

The complaint, the department’s media officer said, has been filed under Section 12(1)(d) of the Consumer Protection Act, 1986. Under this clause, the central or the state government may file such suits in the interests of the consumers in general file.

In a class action suit, a single case is filed collectively by a group of people or on its behalf. The central or state governments can also become the complainants.

According to legal practitioners, this is a first of its kind class action suit filed by the government of India against a company, since the Consumer Protection Act of 1986 was enforced.

According to one of the law officers representing the government, who did not wish to be named, the complaint was filed on three grounds — unfair trade practice, release of products without sanction, and presence of harmful substances.

Reacting to the suit filed in the consumer court, senior counsel Vivek Tankha, who was additional solicitor general in the previous United Progressive Alliance (UPA) government, felt such action could have come after some matters were settled.

“I feel it is over-reaching too early. Even today we’re getting inconsistent reports from different laboratories in India and abroad,” Tankha told IANS, also referring to the matter being sub judice in the Bombay High Court.

“Government should have shown patience. It should not have rushed into ill-advised litigation at this stage. Compensation suits are filed on crystallized facts,” he said.

“In this case, the fact that Maggi is bad for health is in dispute, sub judice. The Bombay High Court still has to give the judgment. Whosoever is unsuccessful will file an appeal before the apex court.”

Nestle India has continued to maintain that quality and safety in manufacture of its products have been of paramount importance to the company.