11/08/2015 5:00 PM IST | Updated 15/07/2016 8:25 AM IST

Govt To Seek Rs 426 Crore In Damages From Nestle India Over Maggi Ads, Unfair Trade Practices

Bloomberg via Getty Images
Packets of Maggi 2-Minute Noodles, manufactured by Nestle India Ltd., which were located behind the counter at a store are displayed for a photograph in New Delhi, India, on Monday, June 15, 2015. Nestle SA said the U.S. Food and Drug Administration is testing samples of imported Maggi noodles after the worlds largest food company halted sales in India when regulators said they contained unhealthy levels of lead. Photographer: Kuni Takahashi/Bloomber

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.

READ: Nestle India's New Chief: Priority Is To Bring Back Maggi To The Market

READ: Nestle's Maggi Noodles Samples Found Safe By Government Approved Laboratory

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.

READ: Nestle Will Destroy 27,000 Tonnes Of Maggi Noodles -- That's Half The Weight Of The Titanic

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.

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