Uttarakhand HC Sets Aside Rs 1.5 Lakh Penalty on PepsiCo, Holds "Maha Value" Label Not Misbranding Under FSS Act
The High Court of Uttarakhand found that the food analyst's report gave no reason why "Maha Value" on a snack packet was false or misleading, and quashed penalties imposed on PepsiCo India.
The High Court of Uttarakhand at Nainital has set aside a Rs 1.5 lakh penalty imposed on PepsiCo India Holdings Private Limited after holding that the prosecution failed to establish that the phrase “Maha Value” on the label of “Lahar Aloo Bhujia” was false or misleading under the Food Safety and Standards Act, 2006. Justice Ravindra Maithani, sitting singly, delivered the judgment on 18 June 2026 in Appeal From Order No. 305 of 2024. The court found that the food analyst's report contained no reasoning to support its conclusion of misbranding, and that both the Adjudicating Officer and the Food Safety Appellate Tribunal had improperly shifted the burden of proof onto the appellant rather than requiring the prosecution to establish a violation.
The Inspection, Sample, and Prosecution
On 8 June 2015, the Food Safety Officer, Garhwal, inspected a shop owned by Mr. Shashi Bhushan Pant, trading as M/s N.S. Enterprise, Agency, Badrinath Road, Srinagar, Pauri Garhwal. After identifying himself to the shopkeeper, the officer purchased four packets of “Lahar Aloo Bhujia.” One sample was sent to the Food Laboratory for examination.
The public analyst, Rajeev Sharma, submitted a report bearing No. 180/SDFTL/JUN/15-PWL. Under the label section of the report, the analyst noted that the original label did not comply with the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 because “Maha Value” was written in the corner of the packet. The analyst's opinion declared the sample misbranded in contravention of Section 3(1)(zf)(A)(i)(a) of the FSS Act.
Sanction for prosecution was obtained and the matter was placed before the Adjudicating Officer, who was the Additional District Magistrate, Garhwal, as Case No. 2 of 2015.
PepsiCo's Defence Before the Adjudicating Officer
PepsiCo India responded to the notice issued by the Adjudicating Officer. The company's position was that “Maha Value” did not relate to the food itself, its quality, or its nutritive value. The phrase, the company argued, was used to inform consumers that the retail package was a value package in terms of quantity, and its use was in compliance with Rule 12 of the Legal Metrology (Packaged Commodities) Rules, 2011 and the scheme of the Legal Metrology Act, 2009.
The company also pointed to Rule 5(3) of the Legal Metrology (Packaged Commodities) Rules, 2011, which expressly permits a manufacturer or importer to sell a value-based package in denominations from Re. 1 to Rs. 10 after making the other declarations specified in Rule 6. PepsiCo contended that the product was not misbranded and that no false information had been conveyed to consumers.
The Adjudicating Officer rejected these submissions. By order dated 21 December 2018, the officer held that writing “Maha Value” on the label violated Section 3(1)(zf)(A)(i) of the FSS Act and Regulation 2.3.1 of the Food Safety and Standards (Packaging and Labelling) Regulations, 2011. A penalty of Rs 1.5 lakhs was imposed on PepsiCo India and separately on M/s Bikanerwala Food Products Pvt. Ltd. The shopkeeper, Mr. Shashi Bhushan Pant, was exonerated.
The Tribunal's Confirmation and the Appeal to the High Court
PepsiCo India and M/s Bikanerwala Food Products Pvt. Ltd. appealed to the Food Safety Appellate Tribunal, Dehradun. The Tribunal, by judgment dated 31 May 2024 in Appeal No. 1 of 2019, confirmed the Adjudicating Officer's order. PepsiCo India then filed Appeal From Order No. 305 of 2024 before the High Court of Uttarakhand.
Before the High Court, counsel for PepsiCo India argued that the food analyst's report was fatally deficient because it gave no reasoning for the conclusion of misbranding. It was submitted that the report did not identify what information on the label was false, and that without such reasoning, even prosecution was impermissible. Counsel also argued that the Tribunal had wrongly placed the burden on the appellant to explain the phrase “Maha Value,” when it was for the prosecution to establish that the label was misleading.
The Legal Framework on Misbranding
Section 3(1)(zf)(A)(i) of the FSS Act defines “misbranded food” to include food that is offered or promoted for sale with false, misleading, or deceptive claims upon the label of the package. Section 23 of the FSS Act requires that labels not contain any statement, claim, design, or device which is false or misleading concerning the food product, its quantity, or its nutritive value. Regulation 2.3.1.5 of the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 similarly prohibits labels from containing any statement, claim, design, device, fancy name, or abbreviation which is false or misleading in any particular concerning the food contained in the package.
The court noted that Form VIII A, the prescribed format for a food analyst's report, requires reasons to be given. The analyst's report in this case contained no such reasoning.
How the Court Reasoned
Justice Maithani examined the analyst's report closely. The report identified the phrase “Maha Value” in the corner of the packet and cited Section 3(1)(zf)(A)(i) of the FSS Act, but it did not explain which information on the label was false or misleading, or how a consumer would be misled by the phrase.
The court drew on a consistent line of authority. In Bal Kishan Thapar v. Municipal Corporation of Delhi, (1979) 2 SCC 459, the Supreme Court had held that a phrase on a label was not misbranding merely because it described a quality of the product. In Parakh Foods Limited v. State of Andhra Pradesh and another, (2008) 4 SCC 584, the Supreme Court held that pictures of vegetables on a soyabean oil packet did not amount to misbranding because they did not exaggerate the quality of the product.
The coordinate bench of the Uttarakhand High Court in Sterling Agro Industrial Ltd. and another v. State of Uttarakhand, 2014 SCC OnLine Utt 147, had addressed the phrase “dream of healthy India” on a packet of skimmed milk powder. That bench held that neither the food inspector nor the public analyst had stated that the words carried a false or misleading statement, and accordingly the prosecution could not proceed.
The Madhya Pradesh High Court in Pepsico India Holdings Pvt. Ltd. and another v. State of Madhya Pradesh, M.C.R.C. No. 6848/2011, decided on 18 June 2019, had observed that an opinion of the public analyst that is devoid of reasoning and not relatable to the result of analysis “is as good as no opinion given.” The Gauhati High Court in Glaxo India Ltd. v. State of Assam and others, (2003) 1 Gauhati Law Reports 407, had similarly held that where the analyst's report failed to indicate how the products were misbranded, there was no scope for prosecution to proceed.
Applying these principles, Justice Maithani held that the prosecution had not established that any information on the label was false or misleading. The court observed that the Tribunal had, in effect, shifted the burden onto PepsiCo India to prove the meaning of “Maha Value,” when the obligation lay with the prosecution to demonstrate that the label misled consumers. The appellant's explanation — that “Maha Value” referred to quantity and was used in compliance with the Legal Metrology Act and the Legal Metrology (Packaged Commodities) Rules, 2011 — had not been addressed by either the Adjudicating Officer or the Tribunal.
The court concluded that both the impugned judgments were not in accordance with law and were liable to be set aside.
Order
Justice Ravindra Maithani allowed Appeal From Order No. 305 of 2024. The judgment and order dated 31 May 2024 passed by the Food Safety Appellate Tribunal, Dehradun in Appeal No. 1 of 2019, and the judgment and order dated 21 December 2018 passed by the Adjudicating Officer/Additional District Magistrate, Garhwal in Case No. 2 of 2015, were set aside. The Rs 1.5 lakh penalty imposed on PepsiCo India Holdings Private Limited stands quashed.