Govt moves consumer panel; seeks Rs 640 crore in damages from Nestle

In a first such action against any company, the Centre has sought compensation of around Rs 640 crore ($100 million) from Swiss food major Nestlé for damages caused by Maggi noodles to Indian consumers.

Officials at consumer affairs ministry said the quantum of damages was revised from the earlier estimate of Rs 426 crore at the time of filing the complaint with National Consumer Disputes Redressal Commission (NCDRC) on Tuesday, following advice from the law ministry.

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This is the first time that consumer affairs ministry has dragged a company to the National Consumer Dispute Redressal Commission (NCDRC), using a provision in the nearly three-decade-old Consumer Protection Act. Terming it a “class action suit”, an official said the move was meant to send a strong message to companies that they cannot sell sub-standard products in the country and put consumers' health at risk.

The damages are linked to unfair trade practices, false labeling and misleading advertisements. The damages are believed to have been clubbed under various sections of the Consumer Protection Act 1986 and one is for Rs 280 crore, the second one is of Rs 142 crore.

The development comes more than two months after Nestlé India had to withdraw its instant noodles brand Maggi from the market over allegations of high lead content and presence of monosodium glutamate (MSG).

When contacted, a Nestlé India spokesman said, “We are yet to receive official notice about the complaint filed before the NCDRC. Our current knowledge on this issue is only on the basis of media reports. We shall be able to provide substantive response after we receive the official papers.”

In the petition filed before the NCDRC, the ministry has alleged that Nestlé India has misled consumers claiming that its Maggi noodle was healthy — ‘Taste bhi, healthy bhi’. It also said, “Nestlé said it (Maggi) had no added MSG, despite the presence of MSG”.

The ministry has also charged that there was more than prescribed limits of “lead content” in Maggi noodles more than the prescribed limits and the company has not done “risk assessment nor taken product approval for the Maggi masala oats”, sources added.

Usually, NCDRC comes into the picture following complaints filed by a consumer, but a section of this Act also provides for the government to register a complaint.

In June, food safety regulator FSSAI had ordered recall of Maggi noodles after it found excess level of lead in samples, terming it as “unsafe and hazardous” for human consumption. Subsequently, Nestlé India had moved Bombay High Court against the FSSAI order, and a verdict is pending.