Bombay High Court Slams FDA, Orders ₹5 Lakh Compensation for Unjustified Business Closure
MUMBAI: In a significant ruling, the Bombay High Court on Monday directed the Food and Drugs Administration (FDA) to pay ₹5 lakh in compensation to a Pune-based dairy and sweets retailer, M/s Gurunanak Dairy and Sweets, for its failure to revoke a business suspension despite the establishment demonstrating 98% compliance with safety norms. The court also immediately vacated the suspension order, allowing the retailer to resume operations.
The decision, delivered by Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad, came as a scathing critique of the FDA’s "perverse" and "strange" policy of prolonging a business closure even after significant improvements were made.
The case originated from a food poisoning incident on June 12, which led the FDA to suspend the retailer’s food license and order its immediate closure without any prior improvement notice or hearing. However, during a re-inspection by a Food Safety Officer on July 13, M/s Gurunanak Dairy and Sweets achieved an impressive 98% compliance score. Despite this, the suspension order remained in effect, prompting the retailer to appeal to the FDA commissioner on July 15.
With the appeal languishing undecided and causing severe financial hardship to the petitioner and its employees, the retailer sought redress from the High Court. Advocate Abhijeet Desai, representing M/s Gurunanak Dairy and Sweets, argued that all deficiencies had been rectified and compliance achieved, yet the suspension persisted. He highlighted a similar case, Pind Punjab, where the High Court on July 16 had ruled that a suspension order became void after a fresh inspection confirmed 100% compliance.
During the hearing, Justice Ghuge, while acknowledging the "laudable" intentions of the FDA in upholding food safety, sternly admonished the agency for "going overboard." He stated, "You should have immediately revoked the suspension of the licence once you noticed 98% compliance."
The State’s advocate attempted to justify the delay by stating that the petitioner’s appeal was pending before the commissioner and closed for orders on August 11. However, the judges dismissed this explanation as "plain and simple perversity" and "torturing citizens." Justice Ghuge questioned the logic of forcing a business to pursue an appeal after achieving near-complete compliance, asking, "What is this? Torturing citizens?"
When queried by the judges about the daily earnings of the shop, Advocate Desai revealed it to be approximately ₹25,000 per day. He calculated the losses incurred since the date of compliance to be around ₹8.5 lakh over 34 days.
In their order, the judges explicitly stated that the State’s submission was "unconvincing" and that the pendency of an appeal was not an impediment to revoking the retailer’s license. They emphasized, "The petitioner scoring 98% compliance should have fetched an order of instant revocation of the suspension order. The lame excuse that an appeal is pending should not have been put forth."
Considering the FDA’s own compliance report, which covered crucial aspects such as cleanliness, hygiene, maintenance, and sanitation, the High Court deemed it appropriate to direct the FDA to pay ₹5 lakh as "compensation for losses." The court further mandated that the FDA deposit this amount within 30 days, granting the petitioner the liberty to withdraw it.
This landmark ruling serves as a strong reminder to regulatory bodies of their responsibility to act with fairness and efficiency, and underscores the judiciary’s commitment to protecting citizens from arbitrary and unjustified actions that cause undue economic hardship.
