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Orders Maharashtra FDA to Pay ₹5 Lakh for Licence Suspension
The has directed the to pay ₹5 lakh in compensation to a Pune sweet shop, Gurunanak Dairy and Sweets, for its failure to revoke a licence suspension even after a re-inspection revealed 98% compliance with food safety norms. The bench, comprising Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad, quashed the suspension order, allowing the establishment to resume operations after a 34-day closure that resulted in a revenue loss of ₹8.74 lakh. The court termed the FDA’s approach “” and accused the department of “” by insisting on a pending appeal despite overwhelming compliance evidence.
Background
The controversy began on , when the FDA suspended the food licence of Gurunanak Dairy and Sweets following complaints of food poisoning. An initial inspection by the regulatory body had flagged deficiencies related to sanitation, hygiene, and maintenance. In response, the shop’s management promptly addressed the shortcomings and submitted a detailed compliance report to Food and Drug Administration Commissioner Tukaram Mundhe on . Four days later, a fresh inspection was conducted by an FDA official, who awarded the establishment 35 out of 36 possible marks—effectively a 98% compliance rating.
Despite this near-perfect re-inspection score, the FDA did not restore the licence. The shop remained shut, accumulating losses that its lawyer, , pegged at ₹8.74 lakh. Desai argued before the High Court that neither the initial inspection report nor the suspension order attributed any specific illness or adverse health consequences to any food article sold by the sweet shop. The regulator’s inaction forced the petitioner to approach the High Court for relief.
The Inspection and Compliance
The FDA’s own re-inspection report left little room for ambiguity. With 35 out of 36 marks, the shop had addressed nearly every issue flagged earlier. Yet the department refused to revoke the suspension, citing a pending appeal before an appellate authority. The FDA’s lawyer submitted that the petitioner’s appeal had been heard and reserved for judgment on , and that the department was awaiting the appellate order before taking further steps.
This explanation did not satisfy the bench. “Once you clear with 98%, you say, now, go and file an appeal. What is this? ?” Acting Chief Justice Ghuge remarked. The court observed that the FDA’s intention to enforce food safety was laudable but that the department had “gone overboard” by not immediately revoking the suspension once compliance was confirmed. The judges underscored that a pending appeal could not be a “” to keep a compliant business shut.
The Court’s Strong Remarks
In a series of sharp observations, the bench criticised the regulator’s approach as “” and a “strange policy.” The court noted that the FDA seemed to be adopting a rigid stance even when the scientific and factual basis for the original suspension had been largely remedied. “You should have immediately revoked the suspension of the licence once you noticed 98% compliance,” the bench stated.
The court cancelled the suspension order and directed the Maharashtra FDA to pay ₹5 lakh in compensation within 30 days. This amount was meant to cover the losses suffered by the sweet shop during the 34-day closure. The ruling also serves as a sharp rebuke to the regulatory mindset that prioritises process over proportionality. Earlier this month, the High Court had similarly rapped the FDA for not revoking the suspension of Hotel Pawan Bar and Restaurant in Navi Mumbai, even after a re-inspection found 100% compliance. In that case, the bench had indicated its intention to impose costs on the department.
Legal Implications and Precedent
This judgment reinforces a growing judicial trend against arbitrary or delayed regulatory actions that harm legitimate businesses. The is sending a clear signal that compliance re-inspections must be treated as conclusive for the purposes of licence restoration, barring compelling reasons to the contrary. By ordering compensation, the court has effectively applied the and accountability in administrative decision-making.
The ruling also invokes . The FDA’s insistence on a formal appellate process, despite favourable re-inspection results, was seen as an unnecessary procedural hurdle that caused real economic harm. Legal experts note that the compensation award could deter other regulators from similarly ignoring compliance reports, especially when the defects are minor and fully rectified.
Furthermore, the court’s remarks about “” indicate a zero-tolerance approach to bureaucratic indifference. The judgment may influence future petitions challenging similar licence suspensions under the , and other regulatory regimes. It also highlights the importance of timely administrative action and the need for regulators to act in .
Impact on Regulatory Practice
For legal professionals, this case underscores the increasing willingness of courts to award damages against statutory bodies for maladministration. The FDA’s conduct—holding a business hostage to a pending appeal despite 98% compliance—was deemed unacceptable. The judgment may spur other aggrieved licensees to seek compensation for losses caused by unreasonable regulatory delays.
Regulators across India will need to reassess their internal protocols for handling re-inspections. The principle that a near-perfect compliance score should trigger immediate restoration of licences, unless there is a demonstrated risk to public health, is now firmly on record. The ruling also cautions against using pending appeals as a shield to avoid taking timely decisions at the administrative level.
Conclusion
The ’s decision in the Gurunanak Dairy and Sweets case is a significant win for business rights and administrative accountability. By ordering ₹5 lakh in compensation and issuing stinging observations, the court has made it clear that regulators cannot treat citizens with impunity. The judgment serves as a precedent for challenging arbitrary suspensions and underscores the need for a balanced approach to food safety enforcement—one that respects both public health and the right to livelihood.
