Bombay HC Pulls Up Maharashtra FDA Over Enforcement Actions: What Businesses Need To Know

(MENAFN- Live Mint) The Bombay High Court's scrutiny of Maharashtra's Food and Drug Administration (FDA) has widened in recent months, with the court examining whether the regulator's action against businesses was proportionate and followed due process.

The latest case involves Cipla Pharma & Life Sciences, but the court's interventions have also covered restaurants, hotels, sweet shops, milk businesses and pharmaceutical companies, according to a CNBC-TV18 report.

The court's scrutiny has focused on the procedure followed by the FDA and the circumstances surrounding individual enforcement actions, rather than questioning the regulator's authority to enforce food and drug safety standards.

Cipla case

On August 29, the Bombay High Court questioned the Maharashtra FDA 's cancellation of wholesale drug-sale licences linked to Cipla Pharma & Life Sciences' primary distribution facility at Wadki in Pune.

The FDA had taken action following inspections that flagged alleged irregularities involving Reactin Plus tablets. The observations included issues with packaging and artwork, discrepancies between physical and computerised stock records, gaps in purchase and sale records and concerns regarding the recall of the tablets.

Cipla challenged the cancellation, arguing that it had not received an adequate opportunity to be heard.

According to proceedings reported by Bar & Bench, the FDA issued a show-cause notice on August 13, to which Cipla responded on August 25. A personal hearing was scheduled for August 26, which was a public holiday. After Cipla sought an adjournment, the authority proceeded with the cancellation order.

The High Court questioned the procedure and described the action as "high-handed". The FDA subsequently agreed to withdraw the cancellation order and issue a fresh notice, giving Cipla an opportunity to respond before taking a fresh decision.

The bench also advised the FDA to avoid scheduling hearings on public holidays unless there was a genuine emergency.

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A separate case involving five restaurants operating on the Mumbai Cricket Association's premises in BKC also resulted in sharp observations from the high court.

According to a News18 report, a division bench of Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad set aside the FDA's suspension orders and allowed the outlets to reopen.

The FDA had acted against the restaurants over alleged hygiene violations and issues relating to their operation by a third party. The food licences were held in the MCA's name, while the FDA maintained that the outlets were operated by M/s Shirke Infrastructure.

During the proceedings, the court had asked the FDA to take a pragmatic approach. However, the department continued with the suspension following a fresh inspection that found the restaurants to be 88% compliant with food safety requirements.

The court criticised the FDA for taking what it described as a "pedantic instead of pragmatic" approach and warned officials of possible contempt proceedings.

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The high court has also intervened in several other cases involving the Maharashtra FDA.

In the case of Gurunanak Dairy and Sweets in Pune, the FDA had suspended the establishment's licence following a food-poisoning incident. A subsequent inspection found the business to be 98% compliant, but the suspension remained in place. The high court quashed the suspension and directed the FDA to pay ₹5 lakh in compensation to the business.

In another case involving Park Inn by Radisson in Navi Mumbai, the hotel challenged an FDA licence suspension following an inspection that raised hygiene concerns. The high court subsequently restored the licence while examining whether the deficiencies justified continuing the suspension.

The Aurangabad bench of the Bombay High Court in July also stayed FDA action against milk vendors and suppliers. The proceedings raised questions about whether the statutory procedure, including improvement notices and an opportunity for a hearing, had been followed before suspension.

The regulator's powers have also come under scrutiny in the Cadila Pharmaceuticals case, where the high court examined action stopping the sale and distribution of certain medicines and whether the FDA had exercised its powers appropriately.

Court not against FDA enforcement

The recent cases do not indicate that the Bombay High Court has taken a blanket position against FDA action. In the case involving Udupi Swaad, a Thane restaurant whose licence was suspended after FDA officials found it serving analogue paneer, the court declined to grant urgent interim relief against the regulatory action.

The differing outcomes show that the court's interventions have depended on the circumstances of each case, including the nature of the alleged violation and the procedure followed by the regulator.

Why the cases matter to businesses

The proceedings have highlighted several issues that can become important when FDA action is challenged.

Businesses can question whether they were given an adequate opportunity to respond, whether the alleged violation justified immediate suspension or cancellation, whether subsequent corrective action was considered and whether the regulator gave sufficient reasons for its decision.

The developments come as Maharashtra's FDA has intensified inspections and enforcement against restaurants, food companies, dairies and other establishments since Tukaram Mundhe took charge as FDA Commissioner around three months ago.

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