THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION No.23594 of 2007 Date: -01-2008 Between: Sai Venkata Lakshmi Chennakesava Industries, Rep.by its Managing Partner, Prakasam District. … Petitioner And 1.Bureau of Indian Standards, rep.by its Director, Hyderabad, and another. The Agricultural Market Committee, … Respondents THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION No.23594 of 2007 O R D E R: This Court issued Rule Nisi on 11.12.2007. Heard Sri M.Ravindra representing Sri M.Venkata Narayana, learned counsel for the petitioner and Sri O.Manohar Reddy, learned counsel representing the respondents. 2. The writ petition is filed for a writ of Mandamus declaring the impugned letter dated 12.10.2007 bearing No.MBH/3070/L-6656384 as illegal, arbitrary, in violation of Articles 14, 19 (1)(g) and 21 of the Constitution of India and the provisions of Bureau of Indian Standards Act, Rules, land Regulations made thereunder, and consequently to set aside the same and pass further orders. (a copy of this letter is placed before this Court) 3. It is stated in the affidavit accompanying the writ petition that on the application made by the petitioner for licence to use standard mark for I.S.14543:2004 dated 02.01.2007 along with necessary fees, the respondents granted a lience to the petitioner to use the standard mark in respect of packaged drinking water (other than packaged natural mineral water) for packing in one litre pet bottles by letter dated 15.02.2007 assigning licence No.CM/L-6656384 and the same is valid from 15.02.2007 upto 14.02.2008; a copy of the said letter is filed in the material papers. The petitioner pursuant to said licence has been carrying on business duly following the conditions of licence. It is also stated that the petitioner appointed one Sri T.Eswari as Micro-Biologist by appointment letter dated 01.09.2007 and one Sri T. Shekhar as Chemist by appointment letter dated 01.07.2006 to work in the petitioner industry. The copies of the said letters are filed in the material papers. It is also further stated that the petitioner made an application dated 06.07.2007 for permission to deal in 200ml pouch manufacturing by the application dated 06.07.2007 duly enclosing the test report and the same is pending with the respondents. The copy of the said application is filed in the material papers. The petitioner also made an application dated 21.08.2007 for permission to do business in 20 litres pet jars along with the test reports and the said application is also pending with the respondents. A copy of it is filed in the material papers. It is also stated that the anticipating permission for doing business in 200ml pouches and also 20 litre pet jars, secured necessary machinery, pet jars of 20 litres and material. While so, the respondents issued proceedings restricting the trading in packaged drinking water and to adhere to the item permitted alone and not dealing in flexible pouches. Challenging the same a batch of Writ Petition No.11711 of 2005 before this Court and Division Bench of this Court suspended the said restrictions by way of interim order and therefore the traders have also been dealing in flexible pouches of 200ml. Apart from that as the applications of the petitioner have not been disposed of for 200ml pouches inspite of expiry of two months statutory period as provided in regulation, it is deemed that permission has been granted. While so, the second respondent visited the petitioner industry on 24.09.2007 and noted as many as 8 discrepancies and served the said discrepancy report upon the petitioner. On the same date the petitioner submitted explanation to the second respondent under her acknowledgement. It is submitted that the Chemist and Micro-Biologist went on leave on 24.09.2007 and the copes of the said leave letters are filed in the material papers. It is further submitted that the petitioner acquired one number B.O.D. incubator under a receipt dated 27.03.2007 and another incubator under a receipt dated 29.07.2007 as the second incubator which broke down and which was sent for repair by 24.09.2007 was certified to be unfit for further working. The copies of said receipts are filed in the material papers. Further in the explanation given by the petitioner the above said fats were taken to the notice of the second respondent regarding the absence of Chemist and Micro-Biologist and about the second incubator. The discrepancy pointed out in the report that inoculation chamber being not available is not correct and the same is a mistake and infact the said chamber is available. Insofar as the discrepancy No.4 is concerned it is submitted that 200ml pouches were in process of preparation and no marketing was carried out. Regarding No.5 discrepancy about noticing 20 litre pet jars is concerned, it is replied that the pet jars of different industries were found and the jars of the petitioner company were not returned. Regarding discrepancy No.6 that as the production Register was with the manager the same could not be produced. Regarding discrepancy No.7 about test report, it is submitted that they were available upto date. Regarding 8th discrepancy about noticing pouches packing machinery and vibrating machinery, it is submitted that they were secured anticipating permission but no work was being carried. In the reply, the petitioner categorically stated that the manufacturing and marketing will be done after obtaining necessary permission. As submitted above the respondents cannot have any objection in relation to manufacturing of 200ml flexible pouches in view of the order of the Division Bench of this Court. A copy of the said order in W.P.M.P.No.14944/2005 is filed in the material papers. The discrepancy report of the second respondent and the explanation given by the petitioner are filed in the material papers. Unfortunately, the first respondent issued a telegram followed by a letter dated 12.10.2007 imposing stop marking with immediate effect under regulation 5(7) of the Bureau of Indian Standards Regulation 1988 and on account of the same, the petitioner is unable to do the business and a copy of the said letter dated 12.10.2007 which is impugned in this writ petition is filed in the material paper. The first respondent failed to consider the explanation submitted by the petitioner to the second respondent dated 14.09.2007 explaining the discrepancies pointed out. The first respondent issued the impugned letter mechanically, without considering the explanation of the petitioner. Apart from that the first respondent also failed to follow the principles of natural justice in not serving any notice upon the petitioner prior to the impugned letter. Therefore, the impugned letter is illegal, arbitrary and unjust. The business being carried on by the petitioner with licence granted by the respondent has the investment Rs.25,00,000/-; apart from that the petitioner has been maintaining the regular staff and making necessary recurring expenditure. On account of the slapping of impugned letter for no conceivable grounds, the business of the petitioner is stopped and the licence would also expire by 14.02.2008. Therefore, the petitioner is constrained to file this writ petition. 4. In the counter-affidavit filed by the first respondent, before adverting to the various allegations made in the affidavit filed in support of the writ petition, it is stated that the Bureau of Indian Standards was established under the Bureau of Indian Standards Act, 1986, and has been functioning under the Ministry of Consumers Affairs, Food and Public Distribution, Government of India and has been discharging its duties as per the Rules and Regulations framed thereunder. It is relevant to mention that Bureau of Indian Standards Act, 1986 has ;been enacted and as per the provisions of the Act and the Rules made thereunder, it is obligatory on the part of the manufacturer to obtain a standard mark in respect of the products which are covered under the provisions of the Act. The certificate of the product is governed under the provisions of the Bureau of Indian Standards (Certification) Regulations, 1988. In reply to the averments made in para-2 of the affidavit, it is submitted that the petitioner company was granted a licence for “packaged drinking water” (other than packaged natural mineral water) for packing in 1 litre pet bottles as per IS 14543:2004 with three amendments. The petitioner company has sent a letter on 06.07.2007 seeking permission for using BIS mark on 200 ml pouches in their existing licence for inclusion. To the application so received, a letter was sent on 17/19.07.2007 advising the firm to pay a special inspection charges for arranging a verification visit for verification of the manufacturing and testing facilities for 200ml pouches. The letter was sent by Speed Post and no reply was received till 24.09.2007. It is also submitted that the petitioner company has again sent a letter on 21.08.2007, which was received in the office of the Hyderabad on 30.08.2007 seeking permission for using BIS mark on 20 litres pet jars in the existing licence for inclusion. On scrutiny of the application, it was noticed that the name of the petitioner company was wrongly mentioned on the test report as M/s. Sri Venkata Lakshmi Chennakesava Industries instead of “M/s Sai Venkata Lakshmi Chennakesava Industries. A copy of the SSI certificate issued by Industries Department, Government of Andhra Pradesh was submitted by M/s Sai Venkata Lakshmi Chennakesava Industries at the time of applying for grant of BIS certificate marks. It is also submitted that in the meantime, a visit was conducted on 24.09.2007 to monitor the operation of the licence granted to M/s Sai Venkatalakshmi Chennakesava Industries. During the visit it was found that the firm using BIS Standard Mark on 200ml flexible pouches and 20 litre pet jars filled with packaged drinking water with BIS certificate marks licence No.CM/L-6656384. Furher, around 50 Nos of 20 litre pet jars were found filled with packaged drinking water, carrying brand names of other manufacturers. As the firm was granted permission to fill packaged drinking water in 1 litre bottles only, the above observations has been treated as violation of BIS (Certification) Regulations, 1988. It is also submitted that during the above said visit carried out on 24.09.2007, additional discrepancies were also noted by the inspecting officer. They are as follows: i) Chemist and microbiologist were not available. In the writ petition, the petitioner has explained the absence of Chemist & Microbiologist as they were on leave on 24.09.2007. It is to be submitted that the firm was given a licence with the explicit condition that they test the product in accordance with the scheme of Testing and Inspection (STI) for which the firm had submitted their acceptance at the time of grant of BIS certificate Marks Licence. According to the scheme of testing and inspection, the firm has to test the product to ensure conformity before using the mark. It was noted that the firm produced packaged drinking water on 20.09.2007, 21.09.2007 and 22.09.2007. Copy of the firm’s test reports for daily/ECU testing according to Form-2 duly verified by the inspecting officer of BIS is enclosed. In the said report of the firm has reported the results for: a) Aerobic Microbial count (AMC) to be tested at 20- 22 degree C for the production done on 21.09.2007 and 22.09.2007; b) Yeast and Mould to be tested at 25 degree C for the production done on 20.09.2007, 21.09.2007 and 22.09.2007, whereas the results for aerobic microbial count (AMC) will be available after 72 hours (i.e., 3 days) and Yeast and Mould will be available after 5 days. Obviously, the firm did not test but reported the results. ii) It is mentioned that the BOD incubators broke down and were sent for repair on 24.09.2007. The BOD incubators are required to test for the present of MC and Yeast and Mould. In the absence of BOD incubator, the firm cannot test the product to ensure conformity to the requirements of IS 14543:2004 which is again non-compliance to STI. iii) It was also observed that the firm could not produce any evidence to the inspecting officer that they carried out the tests, which are to be carried out monthly like faecal streptococci and S. Aureus, Salmonella and Shigella Vibrio Cholera and Vibro Parathaemolyticus, mineral oil, fluoride for months July, August, September, once in 6 months tests like sliver, toxic substances like mercury, cadmium, arsenic, Cyanide, lead, chromium, nickel, selenium, sodium, PCB, PAH, and pesticides residues. In reply to the averments made in paras 9 and 10 of the affidavit, it is submitted that the petitioner has not made any representation as alleged and the explanation that has been given with respect to the discrepancies mentioned in the inspection report are the comments he made on the discrepancy/variation report. I submit that it is true that the first respondent has issued a telegram. The contention raised in para-10 of the affidavit that the respondent has failed to consider the explanation submitted by him to the second respondent dated 14.09.2007 explaining the discrepancies pointed out is all false. It is also submitted that the inspection itself was carried on 24.09.2007 and the question of giving explanation to the discrepancies prior to the inspection does not arise. It is also submitted that in the discrepancy variation report the petitioner has given certain comments. The provisions of the regulations empower the respondent to issue a stop marking order. The discrepancies found at the time of inspection are very grave nature and if the petitioner is permitted to mark the product, it would have an adverse impact on the health of the consuming public. Hence, it is submitted that the contention that the order that has been passed is in violation of principles of natural justice is wholly untenable. It is further submitted that the contention raised in Ground Nos.1 to 4 are wholly untenable. The order that has been passed by the first respondent is perfectly legal and valid and the same is in consonance with the provisions of the Bureau of Indian Standards (Certification) Regulations, 1988. It is submitted that at the time of inspection a report i.e., “Discrepancy/Variation Report is prepared and a copy of the same was furnished to the petitioner and his comments were also taken at the time of inspection. It is also submitted that the regulations does not prescribe issuance of any notice before passing the order. There is prima facie case or balance of convenience in favour of the petitioner. It is also submitted that the petitioner has misused the BIS mark. In fact, the Deputy Director General has also issued notice for cancellation of licence on 24.10.2007 and the said fact has not been stated in the affidavit filed in support of the writ petition. In such circumstances, the dismissal of the writ petition has been prayed for. These are the respective stands taken by the parties. 5. In the light of the specific stand taken in the counter-affidavit filed by the first respondent now the request made by the petitioner for re-construction or the conduct of re-inspection is to be permitted or to be rejected may have to be decided. It is stated that the impugned order dated 12.10.2007 is illegal and violative of Articles of 14, 19(1)(g) and 21 of the Constitution of India. It is also stated that the impugned letter referred to above had been made without considering the explanation of the petitioner and the same is unjust and invalid rules and regulations are made therein and the same is violative of principles of natural justice as well. The impugned letter dated 12.10.2007 reads as hereunder: “By Regd. AD Our Ref MDH/3070/L-6656384 12.10.2007 M/s. Sri Venkata Lakshmi Chennakesava Industries Opp. Industrial Estate, Ongole Road, Markapur – 523 316 Dear Sirs, This is with reference to the BIS Certification Marks Licence No.CM/L-6656384 granted to you for Packaged Drinking Water (Other than Packaged Natural Mineral Water) as per IS 14543:2004, which is valid upto 14.02.2008. We confirm having sent the following telegram: -------------------------------------------------------------------------------- - REFER YOUR LICENCE NO.CM/L-6656384 FOR PACKAGED DRINKING WATER AS PER IS 14543 : 2004(.) STOP USING ISI MARK ON YOUR PRODUCT WITH IMMEDIATE EFFECT DUE TO MISUSE OF STANDARD MARK ON POUCHES AND 20 LITRE PET JARS WHICH ARE NOT COVERED LUNDER THE SCOPE OF THE LICENCE WHICH WAS OBSERVED DURING THE VISIT ON 24.09.2007(.) DETAILED LETTER FOLLOWS(.) BUREAU OF INDIAN STANDARDS --------------------------------------------------------------------------------- You are, therefore, advised to stop using BIS Standard Mark (ISI Mark) on your product covered under the above mentioned licence with immediate effect which was already communicated to you telegraphically as per provisions of 5(7) of BIS Regulations 1988. It was observed that you have been using standard mark pouches and 20 Litre Pet Jars for filing packaged drinking water which are not covered under the scope of your licence observed during the visit on 24.09.2007. In view of this it has been decided to impose stop marking with immediate effect. The standard marked material lying in stock at the time of imposition of stop marking should be withheld, declared, reassessed and segregated by you. Based on evidence provided, permitting release of material will be considered by this office. Please also note that you are not permitted to dispatch ISI marked material subsequent to imposition of stop marking by this office. Please confirm that you have stopped using ISI Mark on your product and furnish us the information on the quantity of ISI marked Packaged Drinking Water (Other than Packaged Natural Mineral Water) as per IS 14543: 2004 held in stock along with the details of Batch number, pending orders for Standard Marked material. Decision regarding permission to use standard mark on your product shall be taken only after we receive your intimation regarding complete correct actions taken on the discrepancies mentioned above. Please note that if you use standard mark on your product during stop marking period, you are liable for prosecution under BIS Act, 1986 Rules and Regulations framed thereunder. Yours faithfully, (B. Ramakrishna Rao) Director 6. It is pertinent to note that the decision to use standard mark on the product shall be taken only after receiving the intimation regarding the correction action taken on the discrepancies mentioned above. The order made by this Court dated 5.10.2007 in W.P.No.1735 of 2007 also had been placed before this Court. 7. In view of the facts and circumstances, the writ petitioner has to be given one more opportunity and in view of the same, let the respondents inspect the petitioner unit to satisfy whether the defects pointed out had been rectified, within a period of four weeks from the date of receipt of this order and it is needless to say that after due inspection the respondents are at liberty to take appropriate decision in this regard. 8. The writ petition is, accordingly, disposed of. No order as to costs. _________________ P.S.NARAYANA,J 21st January, 2008. PNV THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION No.23594 of 2007 Date:21 -01-2008