‘Cascading effect on employees’: HC pulls up Maha FDA for not revoking licence suspension even after violations fixed

The court said businesses should not be forced to litigate for licence restoration once inspections confirm that deficiencies have been rectified.

The Bombay High Court has pulled up the Maharashtra government and the Food and Drug Administration (FDA) for not revoking suspension orders issued against establishments once they have addressed all the deficiencies pointed out by the authorities.

Siddharth Agro, a Pune-based manufacturer of dairy products and animal cattle feed, approached the Bombay High Court against the suspension of its food licences. (HT Photo)

A division bench of acting chief justice Ravindra V Ghuge and justice Gautam A Ankhad said that the result of such inaction was “extremely serious” as the establishments are being prevented from carrying out their business. “This causes financial loss to the establishment and has a cascading effect on its employees and supply chains,” the judges said.

Pune dairy maker challenges licence suspension

The court’s observations came in response to a petition filed by Siddharth Agro, a Pune-based manufacturer of dairy products and animal cattle feed. The company had challenged the immediate suspension of its food licences for alleged violations of the Food Safety and Standards Act, following a surprise inspection by FDA officials on July 15.

FDA officials argued that a re-inspection on July 29 revealed that several deficiencies persisted and, therefore, it could not revoke the suspension. However, the petitioner claimed that the deficiencies had been rectified and sought a fresh inspection to ascertain its compliance.

Accordingly, the court directed the FDA to conduct a fresh inspection on August 31 and to prepare a compliance report. It also ordered the authorities to give the petitioner a copy of the auto-generated report indicating the marks and percentage of compliance.

HC flags financial impact of prolonged suspensions

The bench, however, expressed concern that the establishment continued to face the suspension or cancellation of its licences even after addressing the deficiencies.

“There cannot be any justification for requiring an establishment to approach the court merely to secure revocation of an order which has ceased to have any efficacy. Such litigation is wholly avoidable and unnecessarily burdens both the establishment and the court,” it said, adding that an establishment which has rectified the deficiencies “cannot be penalised further” due to the inaction of the state authorities.

Suspensions must end once deficiencies are rectified

To prevent recurrence and to ensure that the statutory regulatory mechanism operates in a fair, efficient and proportionate manner, the court directed that, in all cases, such suspensions should be revoked once the deficiencies have been rectified.

The bench said that Siddharth Agro’s July suspension order stands automatically revoked, upon issuance of the auto-generated report evidencing compliance, provided the establishment is said to be legally compliant. The authorities were also directed to take all consequential steps, including issuing formal orders, without requiring the establishment to approach the court again.