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Delhi High Court Dismisses Vimal Elaichi Maker's Plea Over Lack of Territorial Jurisdiction
The on Monday dismissed a petition filed by P B Agro LLP, the manufacturer of Vimal Elaichi, which sought to quash show-cause notices issued by the to brand ambassadors Shah Rukh Khan, Ajay Devgn, and Tiger Shroff over allegations of . Justice Swarana Kanta Sharma held that the court lacked to entertain the matter, ruling that the dispute properly belongs before the courts in Maharashtra.
The Regulatory Notice and the Company's Challenge
The dispute originated from an , issued by the Assistant Commissioner (Food), FDA, Greater Mumbai Division, to the three actors. The Maharashtra regulator alleged that advertisements for Vimal Elaichi constituted surrogate promotion of Vimal Pan Masala, a product containing tobacco that is banned in the state. The notice directed the actors to provide documentary evidence establishing Vimal Elaichi as an independent product available for sale and to immediately cease participating in the campaign and remove all promotional content from their digital platforms.
P B Agro LLP, which is based in Delhi and serves as the master licensee for the manufacture and sale of Vimal Elaichi and pan masala not containing tobacco, argued that although the notice was addressed solely to the brand ambassadors, its directives effectively targeted the company and its advertising campaign. The petitioner contended that it had not been issued any notice nor afforded an opportunity to be heard, despite facing irreparable harm from the regulatory action. The company further asserted that the allegations were baseless, pointing out that Vimal Pan Masala had not been manufactured or sold in Maharashtra since 2001 and that a nationwide ban on pan masala containing tobacco had been in place since 2013.
Arguments on
Senior advocates for P B Agro argued that the petition was maintainable under . They highlighted that the company operates from Delhi, its advertising campaign is managed and financed from the capital, and all payments to brand ambassadors are made from Delhi. Additionally, they pointed to the location of key regulatory bodies—the , the , and the —all situated in New Delhi. The petitioner also noted that the had been marked to the CEO of FSSAI in Delhi, and that CCPA was already conducting its own proceedings on the issue of .
The respondents, including the , FSSAI, and CCPA, countered that the notice was an independent action by the FDA, Mumbai, a state authority under the . They emphasized that the three noticees were all residents of Mumbai and that none of them had challenged the notice before the . The Central Government Standing Counsel argued that the State of Maharashtra, the principal authority responsible for the notice, was not even a party before the court to defend its action.
Court's Analysis: No Substantial in Delhi
Justice Sharma conducted a detailed analysis of the pleadings and the nature of the impugned action. The court observed that the bore the heading of the and was issued by an authority functioning under the state's food safety framework. There was no material on record to suggest that FSSAI had directed the Maharashtra FDA to issue the notice or initiate any specific action against the brand ambassadors.
The court emphasized that the mere location of FSSAI as the apex statutory body in Delhi could not transform the character of an independently initiated state action.
"The mere fact that FSSAI is the apex body under the enactment, or that it is situated in Delhi, cannot alter the source or character of the show cause notice impugned in the present petition,"
the judgment stated.
Addressing the petitioner's reliance on its Delhi-based operations, the court held that such facts do not constitute a material part of the . The judgment noted that the had not been issued to P B Agro, and the company had not been called upon to submit any reply, remove advertisements, produce documents, or appear before any authority. The alleged injury was based largely on the company's apprehension about consequences of a notice issued to others.
"The factum of petitioner operating its business from Delhi or engaging brand ambassadors from Delhi, especially when the
has not been issued to the petitioner herein, cannot by themselves confer
upon this Court,"
the court observed.
Precedents and the
The court relied on a series of precedents, including , , , and . These cases establish that not every fact pleaded constitutes a part of the ; only material, essential, or integral facts have that effect. The court also invoked the , noting that even if a slender part of the arose in Delhi, the principal controversy was located in Maharashtra.
The judgment further distinguished the 's decision in , which the petitioner had cited. That case involved the dismissal of a member and turned on specific statutory provisions making the Director General in Delhi a necessary party. The present case, the court held, involved no such statutory compulsion.
Key Observations
The court made several pivotal observations in its reasoning:
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"The mere fact that the petitioner is incorporated, carries on business or maintains an office in Delhi cannot mean that every regulatory action taken against its product by an authority in another State becomes amenable to the jurisdiction of this Court."
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"If such a principle were accepted, a company carrying on business throughout the country could challenge every order or notice issued by a State authority before the High Court within whose jurisdiction its registered office or principal place of business is situated, irrespective of the place of issuance of the order, the authority issuing it, the persons affected by it or the subject matter of the proceedings."
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"The petition is therefore dismissed on this ground, without expressing any opinion on the merits of the petitioner's challenge."
Final Decision and Implications
The dismissed the as for want of , holding that the courts in Maharashtra are the natural and convenient forum for P B Agro to raise its grievances. The court expressly refrained from commenting on the merits of the allegations, leaving that question open for adjudication before the appropriate forum.
The ruling clarifies that companies cannot rely on their Delhi headquarters or the location of national regulatory bodies to challenge state-level enforcement actions before the . For P B Agro, the path forward lies in approaching the or other appropriate forums in Maharashtra to contest the show-cause notices issued to its brand ambassadors.
