NEW DELHI — The government might seek Rs 426 crore as damages from the Indian unit of Swiss giant Nestle for allegedly indulging in unfair trade practices and misleading advertisements of banned Maggi noodles.
Seeking financial penalties among other actions, the Consumer Affairs Ministry may soon file a complaint against the company before the National Consumer Disputes Redressal Commission (NCDRC) using a provision for the first time in the nearly three-decade-old Consumer Protection Act.
"The file on the Maggi issue has been cleared by the Minister. The Department of Consumer Affairs will seek about Rs 426-crore damages from the company," according to sources.
The Department will file a complaint against Nestle for causing damage to Indian consumers by allegedly involving in unfair trade practices and misleading advertisements related to the Maggi noodles product.
Describing the alleged lapses related to food safety standards in Maggi noodles as a "serious issue", Consumer Affairs Minister Ram Vilas Paswan had earlier said NCDRC will investigate the matter and take appropriate action.
Usually, NCDRC comes into the picture following complaints filed by a consumer, but a section of this Act of 1986 also provides for the government to register a complaint.
For the first time, the government is taking action under Section 12-1-D of the Consumer Protection Act, under which both the Centre and states have powers to file complaints.
This particular section deals in the manner in which a complaint can be made before NCDRC.
In June, food safety regulator FSSAI had banned Maggi noodles after it found excess level of lead in samples, terming it as "unsafe and hazardous for human consumption". Subsequently, a few states decided to ban the noodles.
FSSAI had also said Nestle violated labeling regulations on taste enhancer 'MSG' and ordered the company to submit a compliance report on its orders.