Bombay High Court
Red Bull (India Pvt. Ltd vs Downloaded On - 09/06/2013 14:53:23 on 13 August, 2009
Bench: Swatanter Kumar, S.C. Dharmadhikari
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 1184 OF 2009
1. Red Bull (India Pvt. Ltd., }
a company incorporated under the }
Companies Act, 1956, }
having its registered office at }
RF-1, Kakad Chambers Annex }
132, Dr. Annie Besant Road, }
Worli, Mumbai - 400 018. }
2. Red Bull GmbH, }
a Company incorporated under the
laws of Austria, having its
registered office at Am Brunnen 1,
}
}
}
A 5330 Fuschi am See, }
Austria. }
3. Narangs Hospitality Services Pvt.Ltd. }
a Company incorported under the }
Companies act, 1956, having its }
registered office at B-869, Sarkar }
Heritage, JPKS Complex, Kane Road, }
Bandstand, Bandra (West), }
Mumbai - 400 050. }
4. Red Bull Asia FZE }
P.O. Box 54310 }
Dubai Airport Free Zone, }
UAE. }
5. Rahul Narang, }
40, Pali Hill, Zig Zag Road, }
Bandra (West), Mumbai. }... Petitioners.
V/s.
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1. The Office of the Chief Commissioner }
of Customs, Jawaharlal Nehru Custom }
House, Nhava Sheva, Tal. Uran, }
Dist. Raigad, Maharashtra 400 707. }
2. The State Public Health Laboratory, }
Pune, through its Public Analyst, }
Pune - 411 001.
3. The Central Food Laboratory, }
Mysore, through its Director, }
Mysore - 570 020. }
4. Office of the Commissioner, }
Food and Drug Administration, M.S., }
Survey No.341, Bandra-Kurla }
Complex, 2nd Floor, Bandra (East),
Mumbai - 400 051.
}
}
5. The Port Health Organization, }
through the Port Health Officer, }
POC, JNPT, }
Nhava Sheva, Tal. Uran, Dis. Raigad, }
Maharashtra - 400 707. }
6. The Director, Public Health, }
State of Maharashtra, }
Mantralaya, Mumbai. }
7. The Union of India, }
through the Ministry of Health & }
Welfare and the Department of }
Revenue, Ministry of Finance, }
Government of India, }
Udyog Bhavan, }
New Delhi - 110 001. }... Respondents.
Mr. Virag Tulzapurkar, Sr. Counsel, Mr. Suhail Dutt, Miss.
Merlyn Monteiro, Mr. Abhixit Singh for the Petitioners.
Mr. D.A. Nalavade for the State.
Mrs. S.V. Bharucha for Respondent No.7.
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CORAM : SWATANTER KUMAR, C.J. &
S.C. DHARMADHIKARI, J.
RESERVED ON : 08th JULY 2009.
PRONOUNCED ON : 13TH AUGUST 2009.
ORAL JUDGMENT (PER DHARMADHIKARI, J.) :-
By this Petition under Article 226 of the Constitution of India, the Petitioner has applied for the following reliefs :-
"a. For a writ of mandamus or any other appropriate writ, order of direction under Article 226 of the Constitution of India ordering and directing the Respondents (i) to treat, classify, categorize and test and analyze Red Bull Energy Drink as Proprietary Food and NOT as a non-
alcoholic carbonated water under the provisions of the Prevention of Food Adulteration Act, 1954 and Prevention of Food Adulteration Rules, 1955 and release the consignments of the Petitioners lying at Nhava Sheva Port and warehouses of the Petitioners seized/detained by Respondent No.4 as detailed in Exhibit J on that basis and (ii) to treat/classify/categorize the Petitioners product Red Bull Energy Drink(R) as Proprietary Food and not as non-alcoholic carbonated water and to deal with the same on the basis that it is a Proprietary ::: Downloaded on - 09/06/2013 14:53:23 ::: 4 Food.
b. For a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the papers and records relating to the analysis report of Respondent No.2 dated May 20, 2009 and quashing/set aside all acts, actions and proceedings done or initiated on the basis thereof."
2. It is the case of the Petitioners that both First Petitioner and Second Petitioner are companies incorporated under the laws of Austria. The First Petitioner is a subsidiary of Petitioner No.2. They manufacture a Energy Drink known as "Red Bull Energy Drink". It is stated that this is a well known global brand and sold across about 150 countries in the world.
The Third Petitioner is a company incorporated under the provisions of Indian Companies Act, 1956 and inter-alia engages itself in the business of importing various food products alongwith Petitioner No.1 - it is the Indian Distributor of the above mentioned Energy Drink. Petitioner No.4 is also company manufacturing in and exporting the said Energy Drink from India. Petitioner No.5 is a Director and Share ::: Downloaded on - 09/06/2013 14:53:23 ::: 5 Holder of Petitioner No.3.
3. Respondent No.1 is the Commissioner of Customs whereas Respondent No.2 is the Public Health Laboratory of the State which has given a report dated 20th May 2009. It is stated in the Petition that Respondent No.3 is the Central Food Laboratory whereas Respondent No.2 is the State Public Health Laboratory. Respondent No.3 is a statutory laboratory established under the Prevention of Food Adulteration Act and Rules and is superior than Respondent No.2. Respondent No.4 is the Office of the Commissioner of the Food and Drug Administration, Maharashtra State whereas Respondent Nos.
5,6 and 7 are the Officers/Authorities incharge of Public Health. Respondent No.7 is controlling the Food and Health Laboratory.
4. It is the case of the Petitioners that the 2nd Petitioner is the manufacturer of Red Bull Energy Drink(R) which is a Proprietary Food under the provisions of Prevention of Food Adulteration Act, 1954. Red Bull Energy Drink(R) is not a "Non-Alcoholic Aerated/Carbonated Water", since even the Directorate General of Foreign Trade, Ministry of Commerce & ::: Downloaded on - 09/06/2013 14:53:23 ::: 6 Industry, Government of India ("DGFT") has, vide letter dated April 8, 2003, specifically classified "Red Bull-Energy Drink"
under the category ITC (HS) Code No. 2202 90 90 (i.e. Non-
Alcoholic Beverage other than aerated/carbonated water) and not anywhere under the category ITC (HS) Code No.2202 10 (i.e. aerated/carbonated water). The Annexure 'A' to the Writ Petition is a copy of the letter of the Director General of Foreign Trade. It is alleged that since the category of energy drink has not been standardized under the Prevention of Food Adulteration Rules, the energy drink falls under category of "Proprietary Food" as defined in Rule 37A of the said Rules. A Proprietary Food would not be required to comply with any standards prescribed in Appendix B to the PFA Rules inasmuch as there are no standard prescribed for such products.
However, the Petitioners do not dispute that their products would have to comply with other requirements of the PFA Act and the PFA Rules. Thus, substance of the Petitioners' grievance is that their Energy Drink is non-alcoholic aerated, carbonated water. It would not be required to conform to the standards laid down for carbonated water under Item A.01.01 of Appendix B to the PFA Rules. The further grievance of the ::: Downloaded on - 09/06/2013 14:53:23 ::: 7 Petitioner is that Respondent No.2 is treating their product as a "carbonated water". In such circumstances, the consignment of the product which has been imported into India has been seized and details of the seizure are set out in the Petition.
5. The Petitioners state that Petitioner Nos. 1 and 3 have been importing the said Energy Drink from Petitioner No.2 for last several years and the same is being released by the Respondents after testing, in accordance with the findings and orders of the Hon'ble Madras High Court. It is stated that on 10th January 2005 Respondent No.3 tested the Petitioners' Energy Drink as non-alcoholic beverage/carbonated water and determined that the product did not conform to the standards prescribed for non-alcoholic beverage/carbonated water as provided by Prevention of Food Adulteration Act and Rules.
Therefore, a Show Cause Notice was issued by the Joint Commissioner of Customs, Office of the Commissioner of Customs, Chennai. The proceedings were initiated against the Petitioners when they sought to import into India a container of 63,816 cans of energy drink at the Chennai Port. It is stated that Respondent No.3 gave its erroneous analysis ::: Downloaded on - 09/06/2013 14:53:23 ::: 8 testing the product as non-alcoholic beverage/carbonated water instead of proprietary food. Challenging this illegal and erroneous act, a Writ Petition was filed by the Petitioners in the Hon'ble Madras High Court. The Petitioners' contention was that the product was a proprietary food and therefore, had to be tested as such and not carbonated water. The action of the Respondents came to be challenged based upon this contention.
6. The Writ Petition was placed before a learned Single Judge of the Hon'ble Madras High Court but it was dismissed by him. Therefore, a Writ Appeal was preferred before a Division Bench and Judgment and the Order of the Division Bench dated 20th December 2005 is relied upon by the Petitioners. The order set aside the report dated 10th January 2005 and the Madras High Court remanded the matter back to Respondent No.3 to test and re-analyise the product and issue appropriate analysis certificate. A copy of the order passed by the Hon'ble Madras High Court is annexed as Annexure `D' to the Writ Petition. Subsequently, a Contempt Petition had to be moved before the Division Bench and the Division Bench has passed an order recording that now the analysis is that the ::: Downloaded on - 09/06/2013 14:53:23 ::: 9 Energy Drink falls in the category of "proprietary food drink"
as per Rule 37A(2)(b) of the Rules. The Court, therefore, directed the Port Health Officer, Chennai to process the report of the Public Analyst and forward the same alongwith his comments/observations to the Commissioner of Customs, Chennai who on receipt of the report passed appropriate orders in accordance with law. It is in these circumstances that the certificate at Annexure `F' has been issued on 10 th March 2008 and all Respondents are bound by the same.
7. It was expected that the stand of all the Respondents would be in consonance with Annexure `F' but on 9 th April 2009, the Fourth Respondent to this Writ Petition visited the warehouses/godowns of the Petitioner situated at Worli, Bombay and at Kalamboli in Taluka Panvel, District Raigad.
They inspected the same and drew samples of the drink.
They seized the remaining stock under Section 10(4) of the PFA Act. The stocks seized are worth Rs.63,25,350/-. It is then alleged that on 13th April 2009 one part of the sample was sent to Respondent No.2 and remaining samples were sent for testing to the Local Health Authority (Food Drug Administration) Raigad. The Second Respondent in ::: Downloaded on - 09/06/2013 14:53:23 ::: 10 contravention of the orders, directions and findings of the Hon'ble Madras High Court and the analysis report wrongly concluded that the product is carbonated water and held that it does not conform to the standards laid down for such product under the Act and Rules. That report is dated 20th May 2009, which is annexed as Annexure `G' to the Writ Petition.
8. Pursuant thereto, Respondent No.4 initiated prosecution against Petitioner No.1 and its Directors in the Court of Chief Judicial Magistrate, Alibag, District Raigad being (i) Case No. 329/09 dated June 15, 2009, (ii) Case No.330/09 dated June 15, 2009, (iii) Case no.331/09 dated June 15, 2009, (iv) Case No. 332/09 dated June 15, 2009, (v) Case No. 333/09 dated June 15, 2009, (vi) Case No. 334/09 dated June 15, 2009, and
(vii) Case No. 335/09 dated June 15, 2009. Proceedings for release of goods are also pending therein.
9. Similarly, inspections and raids were carried out at a Warehouse at Andheri from which also stocks have been seized, samples were tested but pertinently the test report is that the product of the Petitioner is "proprietary food". This ::: Downloaded on - 09/06/2013 14:53:23 ::: 11 finding is in consonance with the order of the Hon'ble Madras High Court and the certificate at Annexure `F'. Based upon this certificate and test report dated 22nd April 2009, the Additional Chief Metropolitan Magistrate at 46th Court, Mazgaon, Mumbai passed an order dated 26th June 2009 releasing the seized products. Copy of the order is annexure 'I'.
10. Again similar seizure of their product is effected as per the Petitioners, in June 2009 and the details whereof are set out in paragraph 22 of this Writ Petition. It is their case that the seizures have resulted in huge losses to them. There is disruption of the business. The consignments which are lying therefore need to be immediately released. The orders of the Hon'ble Madras High Court need to be followed and the conflicting versions of the Officers of the food and drug administration be corrected is the basis on which Petitioners claim the aforementioned reliefs.
11. Mr. Tulzapurkar, learned Senior Counsel appearing for the Petitioners invited our attention to the PFA Rules as amended and contended that different criteria is evolved and ::: Downloaded on - 09/06/2013 14:53:23 ::: 12 determined by the authorities for different products and articles of food. The classification as far as Petitioners' product is concerned is that it is a proprietary food item and therefore does not fall in any of the entries such as carbonated water or non-alcoholic beverage/drink. He took us through all the Act and Rules and has urged that this Court should decide the controversy by referring to the Rules in question and therefore, issue appropriate orders and directions inconsonance with the findings recorded by the Hon'ble Madras High Court. Mr. Tulzapurkar has taken us also through the present Petition and all annexures thereto. He strenuously urged that all orders made by the Hon'ble Madras High court are in the case of the present Petitioners and they bind Respondent Nos. 2 and 7 so also all subordinate authorities. Once Central Government has not challenged these orders means they accept the correctness of the classification of the Petitioners' product as a proprietary food.
Hence, the issue of classification is concluded and now cannot be re-opened once again by the State Government or its officers. He submits that the Petitioners be not relegated to any other forum but this Court should decide the controversy ::: Downloaded on - 09/06/2013 14:53:23 ::: 13 on the basis of the available material and grant the reliefs as prayed, more so, when there is no affidavit in reply nor any dispute is raised by the Respondents.
12. On the other hand, Mr. Nalavade, appearing for the State and Mrs. Bharucha, appearing for Respondent No.7 have urged that there is alternate and equally efficacious remedy available to the Petitioner inasmuch as pursuant to the seizure that has been effected, the Respondents have initiated proceedings which are pending in a Criminal Court. It is for the Criminal Court to decide now as to whether the Petitioners are guilty of any offence under the Prevention of Food Adulteration Act. This Court can not go into the disputed questions of facts and find out as to whether the drink / product is a proprietary food and falls in that category or is carbonated water and therefore, conforms or does not conform to the standards as laid down in the Rules. Both of them have taken us through the reports at Exhibits 'F' and 'G' to the Writ Petition and the relevant Rules. They have also taken us through the report of the Executive Health Officer, Public Health Department of the Bombay Municipal Corporation. However, according to them, the findings of the ::: Downloaded on - 09/06/2013 14:53:23 ::: 14 Public Analyst as set out in Exhibit 'G' are in consonance with the Rules and therefore, they are applicable. The Prevention of Food Adulteration Act contains various provisions and more particularly Section 20 which provides for cognizance and trial of offences. The power conferred upon the Criminal Court are specified in Sections 20A to Section 21. Further, there is power conferred on the Central Government to give directions under Section 22A of the PFA Act. There are Rules framed by the Central and the State Government. It is not as if the Petitioners cannot approach the authorities under the Act and Rules but instead of so doing, they have approached this Court requesting it to decide the issue as to whether the Petitioners' product is a proprietary food or not. In our view, these are technical matters as is clear from Rule 37A of the PFA Rules, 1955 to which our attention has been invited. Our attention is also invited to the amendments made to this Rule.
In our view, these are matters which are best left to the authorities under the Act and the Rules. In any event, it is also open for the Petitioners to raise the same. It will be open for the Petitioners to raise the issue in the pending criminal proceedings. Once, there is a dispute and it is raised in ::: Downloaded on - 09/06/2013 14:53:23 ::: 15 reference to various reports and analysis, then, in our view, writ jurisdiction is not the appropriate remedy for the Petitioners.
13. In our view, the Petitioners have an alternate and equally efficacious remedy available to them in law. The relief that is sought before us is to classify and categorize the energy drink as proprietary food and not as a non-alcoholic carbonated water. We do not possess the expertise to grant these reliefs inasmuch as whether the reports as annexed to the Writ Petition are conclusive or not is something which must be decided on the basis of evidence and more particularly expert opinion, by competent authorities and Courts. We cannot in our limited jurisdiction go into disputed questions of facts.
More particularly, when the order of the Division Bench of the Hon'ble Madras High Court is based upon a concession of the Additional Solicitor General appearing before it. The Hon'ble Madras High Court has not decided the matter finally but remitted the case at the stage of Show Cause Notice back to the Director of Central Food Laboratory. The Petitioners can therefore take up the matter with the authorities under the Prevention of Food Adulteration Act and Rules.
::: Downloaded on - 09/06/2013 14:53:23 ::: 1614. Further, the principal relief of the Petitioners is release of the seized stocks and goods. Admittedly, the case of the Petitioners is that Exhibit 'J' is a conclusive report and therefore, the seized/detained stocks must be released. Now, whether the report is conclusive or not can only be established after the parties produce further materials in the pending criminal cases. It is not as if the Petitioners cannot seek release of the stocks. If they approach the competent Criminal Court and request it to exercise its powers under Sections 451, 452 and 457 of the Code of Criminal Procedure, 1973, we have no doubt in our mind that such application would be considered by that Court on its own merits and in accordance with law uninfluenced by the disposal of the present Writ Petition.
15. Once we are of the view that the Petitioners have an alternate and equally efficacious remedy and that there are disputed questions of facts involved in the Writ Petition then, we have no alternative but to dismiss this Writ Petition. The Writ Petition is dismissed subject to above. We keep open all contentions and clarify that we have not expressed any ::: Downloaded on - 09/06/2013 14:53:23 ::: 17 opinion on the merits of the controversy. There will be no order as to costs.
CHIEF JUSTICE S.C. DHARMADHIKARI,J.
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