2017 (11) TMI 1833 - HC - Indian Laws

Whether the noodles can be held to be misbranded because of the positive test of MSG? - HELD THAT - As per language of Rule 42 (s) of the Rules, in my considered view the word added has great significance. The aforestated declaration is required only when MSG is added from outside source in a particular food product and such declaration is not required when MSG is present in the food product in natural form. A Public Analyst can describe a food product misbranded in terms of Rule 42 (S) of the Rules only when he gives a definite finding based on test-results that MSG is added in the food product from outside source. Prosecution of the petitioner for violation of Rule 42(S) of the rules - HELD THAT - The Public Analyst has not clarified in its report whether the MSG in the sample is added from outside or it is naturally present in the product. Therefore, if the sample tested positive for MSG, it cannot be made a ground for prosecution of the petitioner for violation of Rule 42(S) of the rules in view of underlined portions of the said order. It is settled law that a criminal liability of transferor company into the tranferee company cannot be transferred or fastened on transferee company upon its amalgamation, because with the amalgamation, the transferor company suffers a civil death and it is ceased to exist. In the present case, the offence is occurred on 21.12.1996 and the Brooke Bond Lipton India Ltd merged with the Hindustan Lever Ltd on 20.3.1997. Thus, the Brooke Bond Lipton India Co. Ltd. committed the alleged offence before its merger with the petitioner Hindustan Lever India Co. Ltd. Consequently, the petitioner cannot be prosecuted. The petitioner cannot be prosecuted for the charges as mentioned in the complaint. Therefore, I allow this petition and quash the complaint and the subsequent proceedings in Criminal Case No.2473 of 2007 in respect of the petitioner only in exercise of powers under Section 482 Cr.P.C. Petition allowed.

Summary

Issues:
1. Interpretation of Rule 42(S) of the Prevention of Food Adulteration Act regarding Monosodium Glutamate (MSG) in food products.
2. Liability of a company for offenses committed before its merger with another company.

Issue 1: Interpretation of Rule 42(S) regarding MSG:
The petitioner sought to quash a complaint under the PFA Act related to the misbranding of "Top Ramen instant noodles" due to the presence of MSG. The Public Analyst found the noodles misbranded as MSG was not declared on the package. The petitioner argued that Rule 42(S) requires a declaration only when MSG is added from an outside source, not when naturally present. Citing precedents, the petitioner contended that the absence of a declaration is not mandatory if MSG is naturally present. The Public Prosecutor agreed on the necessity of the declaration but argued that the petitioner, post-merger, can be prosecuted for the offense. The judgment analyzed Rule 42(S) and emphasized that the declaration is required only for added MSG, as supported by legal precedents. The judgment also referenced a 2016 order stating prosecution should occur only if MSG is deliberately added without proper declaration. As the report did not clarify the source of MSG, the prosecution against the petitioner was deemed unwarranted.

Issue 2: Liability of a company pre and post-merger:
The prosecution argued that the petitioner, post-merger, could be held liable for offenses committed by the pre-merger company. However, the judgment highlighted legal principles that criminal liability does not transfer to the transferee company upon amalgamation. The judgment referred to a Bombay High Court decision supporting this stance. As the offense occurred before the merger, the petitioner could not be prosecuted. The judgment emphasized that with amalgamation, the transferor company ceases to exist, absolving the petitioner of liability. Consequently, the petition was allowed, quashing the complaint and proceedings against the petitioner in Criminal Case No. 2473 of 2007 under Section 482 Cr.P.C.

This detailed analysis of the judgment from the Madhya Pradesh High Court provides a comprehensive understanding of the legal issues involved and the reasoning behind the decision.