1 upa wp3998-10-final.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.3998 OF 2010 PepsiCo India Holdings Limited, ) A company duly incorporated under the ) Companies Act, 1956, having its ) registered office at 3-B, DLF, Corporate Park, ) "S" Block, Qutub Enclave, Phase-III, Gurgaon and ) having its one of the Plants at Plot No.5, Ranjangaon, ) MIDC, Taluka-Shirur, District-Pune, through its ) Authorised representative and Finance Manager ) Shri Mayank Jaju, having his office at ) Xcellency Chamber, Sion-Trombay Road, ) Bombay- 400 088. ).. Petitioner Versus 1. State of Maharashtra, ) through the Secretary, Food and Drug ) Admiinstration, Consumer Protection Department, ) Mantralaya, Mumbai - 400 032. ) 2. The Commissioner, Food and Drug ) Administration, Maharashtra, having his ) Office at Bandra-Kurla Complex, ) Bandra (E), Mumbai- 400 051. ).. Respondents Mr. Janak Dwarkadas, Senior Advocate with Mr. Rajeev V. Talasikar for the petitioner. Mr. S.N. Patil, Assistant Government Pleader for respondent Nos.1 and 2. CORAM : MOHIT S. SHAH, C. J. AND DR. D.Y. CHANDRACHUD, J. 2 upa wp3998-10-final.sxw JUDGMENT RESERVED ON : 01 OCTOBER 2010 JUDGMENT PRONOUNCED ON : 23 DECEMBER 2010 JUDGME NT (Per Chief Justice) What is challenged in this petition under Article 226 of the Constitution of India is the order dated 17 April 2010 of the Food (Health) Officer & Commissioner, Food & Drug Administration (Maharashtra State), Mumbai, dismissing Appeal No.14/2009 and confirming the order dated 11 June 2009 of the Licensing Officer & Officer (Food) Food & Drug Administration, Pune, suspending the license of the petitioner-factory for a period of two days. The license was issued under Rule 5 of the Maharashtra Prevention of Food Adulteration Rules, 1962. During pendency of this writ petition, the said orders of the authorities were stayed. 2. By consent of the parties, petition was taken up for final disposal. 3. The facts leading to filing of this writ petition, briefly stated, are as under: One complaint was received by the office of Food Inspector, Pune on 7 October 2008 regarding infection of larves in “oats Break Fast special” manufactured by the petitioner. The Food Inspector, Pune inspected the petitioner-factory on 8 October 2008 and 12 May 2009. On the basis of inspection reports of the above dates, the Licensing Authority, Pune sent a show cause notice to the petitioner on 15 May 3 upa wp3998-10-final.sxw 2009 at Exhibit `B'. The petitioner submitted its explanation dated 1 June 2009 at Exhibit `C'. By order dated 11 June 2009 at Exhibit `D', the Licensing Officer suspended the petitioner’s license for two days. 4. For the sake of convenience, we have given the allegations in the show-cause notice, the explanation in the reply and finding given by the Licensing Officer item wise. 5. Allegation -A : Use of raw materials beyond "Best Before" date: Spinach powder Manufacturer- Sensienf Production date 14.08.08, Best buy –Feb.2009, stock 52 nos. The said food product is stored for production even after expiry of Best buy date. It was observed that you have used for production the raw food items which are out of date. You have not confirmed by taking test of said food items whether it is proper to eat out of date food product. Hence you have violated Rule 32(i) of the Prevention of Food Adulteration Rules, 1955 (hereinafter referred to as “PFA Rules, 1955) Besan – Manu. Rajdhani Flour Mill Ltd., Delhi, 35 Kg. Packing Mfg. Date : 03.03.09, Best before 60 days, Stock 77 nos. It is observed that this out of date raw food item is used for production by you. You have not confirmed by taking test of said food item whether it is proper to eat such out of date food product or how. Hence you have violated Rule 32(i) of PFA Rules, 1955. Out of date stock of food item like (i) Kesar flavour (ii) Strawberry flavour was observed at the time of inspection on 8.10.2008. 4 upa wp3998-10-final.sxw Explanation : For materials Spinach powder and Besan, the suppliers have specified shelf life as 6 months and 3 months respectively. On the basis of the nature of the product and processing, the R&D department which technically controls quality of the product, has defined the shelf life as 1 year and 4 months respectively. Hence as recommended by you, in future usage, validation for best before date materials will be validated by respective suppliers only and we have already started the process. In addition we are in the process of having single shelf life as recommended by suppliers in our internal system. The supplier validated shelf life for best before materials certificate was also furnished with the reply. Finding given by the Licensing Officer : It has been observed that Spinach powder manufactured by Sensient with manufacturing date 14.08.08 and “Best Before by Feb 09” has been used for manufacturing. You have not done any testing to find out whether it is good for consumption. Because of that you have violated Rule 32(i) under the PFA Rules, 1955. It has been observed as regards material Besan, manufacturer, Rajdhani Flour Mills Ltd., Delhi, product date 03.03.09 “Best Before 60 days”, that the said raw material has been used by you even after the expiry date. You have not carried out any testing to prove whether the said item is good for consumption. It is a violation of Rule 32(i) under PFA Rules, 1955. 5 upa wp3998-10-final.sxw 6. Allegation B - Absence of manufacturing details on fiber plus pack : Fiber Plus WF 600, 20 Kg. Bag : on this raw food item the name of manufacturer and address is not mentioned on the packing. Hence there is violation of Rule 32(i) of PFA Rules, 1955 and you have stored this food item for production. Explanation : Fiber pulp- WF 600, 20 Kg is an imported item from Australia. We have received a confirmatory note from our principal supplier and importer for all the manufacturing details. However, we have highlighted this issue to our principal supplier at Australia and it has been agreed the future supply will carry the manufacturing details on all individual bags. Finding given by the Licensing Officer : It has been observed that the name and address of the manufacturer is not mentioned on the raw material, Fiber plus WF 600, 20 Kg bags. It is a violation of rule 32(c) under food adulteration administration. For the same the explanation given by you is not satisfactory. 7. Allegation C : Century Refined Table iodized Salt Mfg. Date 6/08, 50 Kg bags stock 120 bags on which “Best Before date” not mentioned. Hence violated Rule 32(i) of PFA Rules, 1955 by storing raw food items for production of food items by you. Explanation : The reference to Rule 32(i) is misplaced and is not maintainable. The package iodized salt shown to the visiting 6 upa wp3998-10-final.sxw officials did contain the declaration of “best before”. The package will be shown during the hearing to the satisfaction of this Ld. Authority. Finding given by the Licensing Officer : It has been observed that best before date has not been mentioned on raw material Centurian refined iodized salt, product date 06.08 of 60 kg and 120 kg bags. This is the violation of Rule 32(i). The explanation given by you is not satisfactory. 8. Allegation D - Non availability of Food Grade Certificate for GMS (Glycerol Mono Stearate) : GMS (Glycol mono separate) this item is stored, this items is used in the product of Baked Corn. There is no permission to use said item in Baked Corn Product. Hence you have violated Section 2(1a)(a), 2(in)(m) of PFA Act, 1954; also made violation of Rule 81. Explanation : The said material is used as a lubricant for extruder start up process and not as an ingredient of the product. We have already taken up with the vendor and the required food grade certificates are available with us now. Along with the reply, Food Grade Certificate for Glycerol Mono Stearate was also supplied. Finding given by the Licensing Officer : It has been observed that you are using GMS (Glycerol mono stearate) in your baked corn products. You are not authorized to use the said material in baked corn products. You have violated section 2(1a)(a), 2(ia)(m) and Rule 81. 7 upa wp3998-10-final.sxw 9. Allegation E - Manufacturing Area : In the production department, the tiles are broken in between, where food particles are kept. Therefore you have violated Rule 5(3) of Maharashtra Prevention of Food Adulteration Rules, 1962, read with License condition No.4 B. In the Production Department unclean tiles in between, in which stored on some times. Therefore you have violated Rule 5(3) of Maharashtra Food Adulteration Prevention Rule 1962, read License condition No.4 B. Explanation : 1. Repairing of broken tiles: We do have regular maintenance system for carrying out the repair work of building structures. The broken and damaged tiles are periodically replaced or repaired. The places identified are already replaced and in future we will plan it in our regular maintenance system and as ongoing activity. 2. During inspection the lines were under cleaning process as a part of sanitation, hence dirt accumulation was observed during the visit. For effective cleaning we have provided high pressure jet cleaning machines and the actions are being taken for minimizing the product spillages during production. Post sanitation line will be audited by Quality Control Department and will be cleared for production. Finding given by the Licensing Officer : It has been observed that some tiles are in broken condition in manufacturing area 8 upa wp3998-10-final.sxw and food items have been accumulated in it. It is a violation of rule no. 5(3) and permission condition 4(b). 10. Allegation F - Workers medically not checked: There are Contract Labours for handling food items in the production department, but not medical checking of said labours. Not produced certificate regarding labours whether they are free from skin & contagious disease & how, hence your have violated Rule 50(9) of Food Adulteration Prevention Rule, 1955. Explanation : We do have medical records for contract work force for packaging area. We do conduct medical test for contract employees on every year. However, some people change due to non availability/ absenteeism. Hence, in future we will place only medically examined contract labourers in food handling area and the medical examination of the current contract employees will be completed by June 09 end. The petitioner also enclosed with the reply, sample medical examination report of contract employee. Finding given by the Licensing Officer : It has been observed that you have not carried out medical examination with respect to contractual labours. This is the violation of rule no.50(9) under food adulteration administration. 9 upa wp3998-10-final.sxw 11, Allegation G - Packaging Area not clean : Plastic wrapper and food particles fallen on tiles in the Packing Department. Hence you have violated Rule 5(3) read with License condition No.4 C of Maharashtra Food Adulteration Prevention Rule 1962. Explanation : During inspection the packaging area was under cleaning process as a part of sanitation programme, hence the observation on fallen plastic wrappers and food particles on floor. The same was cleaned as a part of sanitation operation. During regular runs, the area will be clean and the production will be continued post clearance of line audit by Quality Control Department. Finding given by the Licensing Officer : It has been observed that plastic covers (packaging film) and food items have been spilled on floor. This is violation of rule no.5(3) under food adulteration administration and manufacturing permission condition 4(c). 12. Allegation H - Plastic Wrappers : Not produced the certificate regarding Plastic wrapper used for food packing whether these are good graded or how to Inspector. Hence you have violated Rule 49(v) of Food Adulteration Prevention Rule 1955. 10 upa wp3998-10-final.sxw Explanation : We do have vendor development system for supplying materials to us. Materials will be procured only from approved vendors by Corporate purchase department. We do take food grade certificate from packaging materials suppliers during first supply (the food grade certificate from film supplier M/s. Positive Packaging was shown to you during the visit). However as per your recommendation, in future we will get the same on yearly basis. We have already contacted our suppliers to issue a fresh food grade certificates which is expected in a week’s time. Finding given by the Licensing Officer : During the inspection the food grade certificate of packaging material was not presented and the certificate presented afterwards, is not clear. So you have violated rule 49(5) of food adulteration administration. 13. Aggrieved by the above order dated 11 June 2009, the petitioner preferred appeal before the Commissioner, Food and Drug Administration, Maharashtra State, Mumbai contending that the petitioner has been operating the license for manufacturing of potato chips and other food products in the manufacturing facility which is a state of the art facility accorded safety certification and environmental certification as per the certificate enclosed. That the total annual turn over of the facility within Maharashtra was exceeding Rs.90 crores and that the petitioner was contributing through this facility local taxes to the tune of Rs.9 crores or more per year, that the facility provides average daily employment to 335 regular employees and about 580 contract 11 upa wp3998-10-final.sxw workmen and that the plant also provides indirect employment to associated services for about 500 people and there are about 3600 farmers who are involved in the contract farming activity initiated by the petitioner through who grow potatoes for consumption by the petitioner in manufacturing of the products. The petitioner raised various legal contentions and factual defences. The appellate authority, however, dismissed the appeal by the impugned order dated 17 April 2010. Hence this petition. 14. Mr. Janak Dwarkadas, learned Senior counsel for the petitioner raised the following contentions: The authorities have erred in passing the impugned orders on the ground of violation of Rule 30(i) and Rule 32(i) of the Prevention of Food Adulteration Rules, 1955. He submitted that respondent-authorities erred in not considering the scope and ambit of explanation VII (i) to Rule 32 defining “best before”. The authorities erred in not considering that “best before" date is not akin to expiry date and that the product beyond the “best before" date may still be perfectly satisfactory. The petitioner had produced at the hearing of the appeal various certificates issued by the vendors/suppliers of respective produces confirming the above aspect. This fact was also informed to the visiting officials during the course of inspection. For instance, the specification sheet dated 28 April 2009 (Exhibit `G’ at page 38 of the petition) indicated the certificate dated 2 January 2009 read as under: 12 upa wp3998-10-final.sxw “Date : 02-01-2009 TO WHOMSOEVER IT MAY CONCERN Sub : Shelf life extension. Produce : 1327 Spinach Powder Lot No. : 264151 Manufacturing Date : 19th August, 2008 The Best before of 6 months from date of manufacture provided for Spinach Powder was conservative. This material is well acceptable in terms of quality attributes and safe and fit for human consumption 12 months from its date of manufacture when stored in original sealed packs at ambient conditions. Sensient India Private Limited” 15. It is submitted by the learned counsel for the petitioner that Spinach Powder in question was manufactured on 19 August 2008 and that six months "best before” period came to an end on 19 February 2009 but as mentioned in the certificate, the material was fit for human consumption for 12 months from the date of its manufacture when stored in original sealed packs at ambient conditions and was, thus, safe and fit for human consumption till 19 August 2009. Hence, when the material was used on the date of inspection i.e. on 12 May 2009, it was well within the safe and fit period and also shelf life product of potato chips made for spinach powder used on 12 May 2009 which was given three months best before period was also within the safe and fit period. In other words, the potato chips made was safe and fit for human consumption till 19 August 2009. The respondent-authorities, therefore, 13 upa wp3998-10-final.sxw erred in holding that the petitioner had violated rule 30(i) of the Rules. The learned counsel placed strong reliance on the decision of the learned Single Judge of Andhra Pradesh High Court in Hyderabad Breverages Pvt.Ltd. v. State of Andhra Pradesh, 2006 Cri.L.J. 3988, in support of the respondent-authorities who erred in suspending the petitioner’s license under the Prevention of Food Adulteration Act, 1954 without sending any sample of the raw material (spinach powder/Besan or all the finished product potato ships etc.) for analysis to the Central Food Laboratory. Without getting any such analysis done by the Central Food Laboratory, it is not open to the respondents to hold or even to allege that without a certificate from such laboratory that the sample has decomposed or that the sample is fit or unfit for analysis etc, the respondent authorities could not have held that the petitioner had violated the provisions of rule 30 or rule 32 of the Prevention of Food Adulteration Rules, 1955. 16. The learned counsel heavily relied upon the decision of the learned Single Judge of Andhra Pradesh High Court in Hyderabad Breverages case (supra) in support of the contention that expiry of “best before” date or shelf life of product would only enable the manufacturer to disclaim the liability regarding marketability and the specific qualities of the product but it would not automatically render the sample unfit for analysis or consumption. 17. The learned counsel further submitted that the authorities have erred in not considering the petitioner’s defence that in Turbo Extrusion machines, Glycerol Mono Stearate (GMS) is used as a 14 upa wp3998-10-final.sxw lubricant in a machine manufacturing certain food items and the petitioner relies on the certificate (Exhibit `I' at page 42) issued by the supplier manufacturer of the machine Schaaf Technologies GmbH, a Germane company which explains the important function of the schaaf knows for a successful start of a turbo extruder machine used for making potato chips and other food items. The learned counsel further submitted that during the course of hearing of the appeal, the appellate authority was also informed that tiles were replaced in the manufacturing area and accordingly, necessary documents were also brought to his notice, for instance, the check list reflecting maintenance in the process area, packaging area and raw material area and packaging material dispatch area for May and June 2009. 18. The learned counsel further submitted that the petitioner is not employing any contract labour which is suffering from any infectious, contagious or loathsome disease. The petitioner has an established protocol in the factory to ensure health check up regularly as soon as the contract labour commences work from established hospitals and/or registered medical practitioners. The contractual employees supplied by a registered labour contractor are assigned work involving packaging etc. The petitioner-company and the registered labour contractor execute a contract and the labour contractor is bound to supply the petitioner-company fit workers. The petitioner had produced before the appellate authority a chart (Exhibit `K’ at page 70 of the petition) reflecting the medical check up of the workers. 15 upa wp3998-10-final.sxw 19. The learned counsel further submitted that at the hearing of the appeal, the petitioner had also relied upon the food grade certificate reflecting compliance to the respective standard regarding plastic packaging material. The learned counsel further submitted that the visiting officials were shown that the package had a proper sticker affixed to it indicating all the relevant details with reference to the commodities known as “Fiber Plus” used by the petitioner in one of its products. The learned counsel also relied upon the certificate dated 28.5.2009 issued by the supplier of Glycerol Mono Stearate (GMS) indicating that the said material is manufactured from materials obtained from vegetable oil and that the product is food grain in nature. 20. On the other hand, the learned counsel for the respondent- authorities has opposed the petition and pointed out that during the inspection, the Food Inspector had noticed all the illegalities / non- compliance of the relevant statutory provisions and conditions of license at the time of inspection on 8 October 2008 as under: “1. On the mezzanine floor 13 bags of quick oat’s were stored which were imported from Australia, but did not bear the name of importer & it’s address, manufacturing date, batch no. and Best Before date. 2. On the said mezzanine floor, keshar masala flavour was found stored in 14 boxes on which manufacturing date 01/2008 Best Before six months from manufacturing was found. The said food article was used after its before date without pre-analysis. 3. On the platform & steps food articles were found. 16 upa wp3998-10-final.sxw 4. In the packing section, the packing material was used which did not disclose the certificate to verify whether the said packing material was of food grade quality or not.” 21. The learned counsel for the respondents further submitted that even at the time of second visit on 12 May 2009, the Food Inspector noticed 52 bags of spinach powder bearing manufacturing date 14/8/2008 and best before date February 2009 was being used after its “best before" date for the production of various food articles without verification of pre-analysis. Similarly, 77 bags of 35 kg. each of Besan (Gram Flour) which was manufactured on 3 March 2009 and which was to be used within a period of 60 days i.e. by 3 May 2009, was being used after expiry of the best before period and without verification of pre-analysis. 22. It is also submitted that 20 kg. bags of fiber plus articles were found stored for use in manufacturing of various food articles but the container did not mention name and address of the manufacturer, so also 120 bags of 50 kg. each of centurian refined iodized salt had manufacturing date of July 2008 but did not mention the best before date. It was also submitted by the learned counsel for the respondent- authorities that at the time of inspection, the flooring in manufacturing area was found unclean and dirt was found accumulated on the tiles and that various food articles were handled by the contract labour without medical examination of all those workers to assure that they were free from contagious diseases. The learned counsel for the respondent – authorities further submitted that the certificates relied upon by the petitioner at the hearing of the appeal were not produced before the 17 upa wp3998-10-final.sxw Licensing Authority and that even after production of those certificates, the petitioner had not discharged the onus to show that the petitioner had got verification of pre analysis of the raw material at the time of using the same for manufacturing the food products after the expiry of its ‘best before’ period. 23. As regards the judgment of the learned Single Judge of Andhra Pradesh High Court, the learned counsel for the respondents submitted that the said judgment does not bind this Court and that even otherwise, the burden of proof on the licensing authority for the purpose of suspending the license cannot be as high as that in criminal trial for proving the offence which would have the consequence of sending the manufacturer to jail. 24. In rejoinder, the learned counsel for the petitioner submitted that the Andhra Pradesh High Court has placed correct interpretation on explanation VII (i) to Rule 32 and that the interpretation of such a statutory provision cannot vary depending on whether the licensee is facing a criminal trial or whether he is being proceeded against for suspension of license. The learned counsel submitted that suspension of license is also a penal measure and that license cannot be suspended unless all the ingredients of the Act constituting an offence are fully satisfied. 25. While the