Supreme Court Quashes ₹5 Lakh Compensation To Pune Dairy, Backs Maharashtra FDA Action Over Unsafe Food Sample

Mumbai: The Supreme Court on Monday set aside a Bombay High Court order directing the Maharashtra Food and Drug Administration (FDA) to pay Rs 5 lakh compensation to a sweet and dairy products establishment, holding that the regulatory action had been taken in the interest of public health.

Food Poisoning Complaint Triggered Inspection

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The case relates to M/s Gurunanak Dairy & Sweets, which was inspected by FDA food safety officers in Pune on June 12 following a complaint of food poisoning. During the inspection, officials found deficiencies related to hygiene, record maintenance, labelling and personal hygiene of employees. A sample of Malai Pedha was also collected for analysis and was subsequently declared unsafe, following which the establishment's food licence was suspended under the Food Safety and Standards Act, 2006.

The proprietor challenged the action before the Commissioner, FDA, on June 15. The establishment later submitted a compliance report on July 9, following which the FDA conducted a reinspection within four days, on July 13.

HC Had Awarded ₹5 Lakh

The establishment subsequently approached the Bombay High Court through Writ Petition No. 9905 of 2026. On August 17, the High Court revoked the suspension of the food licence and directed the FDA to deposit Rs 5 lakh as compensation for the business losses allegedly suffered by the establishment.

Challenging the compensation direction, the Maharashtra government told the Supreme Court that the FDA's action was based on food safety deficiencies and an unsafe food sample, and was undertaken in accordance with the provisions of the Food Safety and Standards Act.

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The State also submitted that the statutory appeal filed by the establishment was pending before the Commissioner, FDA, and that the authority had acted promptly by carrying out a reinspection within four days of receiving the compliance report. It argued that there was no malicious, arbitrary or deliberate delay on the part of the FDA and that time taken in good faith during a statutory process could not be a ground for imposing compensation on the government.

Accepting the State's submissions, the Supreme Court on October 5 quashed the Bombay High Court's direction requiring the FDA to pay Rs 5 lakh compensation.

The FDA said the ruling reinforces that regulatory action taken on the basis of deficiencies detected during food safety inspections, when carried out under the Food Safety and Standards Act and in the interest of public health, is justified.

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