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Kerala HC quashes ban on Coke and Pepsi

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`Power to prohibit manufacture and sale vests with Central Govt'

K.C. Gopakumar

Kochi, Sept. 22

A Division Bench of the Kerala High Court on Friday quashed the State Government orders banning the manufacture and sale of Coca-Cola and Pepsi Cola, saying that the Government had no power to pass such orders under the provisions of the Prevention of Food Adulteration Act.

The Bench comprising the Chief Justice, Mr V.K. Bali, and Mr Justice M. Ramachandran, quashed the orders while allowing the writ petitions filed by the Hindustan Coca-Cola Beverages Private Ltd and PepsiCo India Holdings Private Ltd challenging the ban orders.

The court held that the power to prohibit the manufacture and sale of the products under the provisions of the Act had been vested with the Central Government. The Bench pointed out that if the State Legislature and Parliament had concurrent powers on a matter, the executive power of the State Government was subject to and limited to the executive power of the Central Government.

Repelling a contention, the court said that since the adulteration of foodstuff had found a specific mention in the Concurrent List, it could not be said that they came under a separate entry such as public health and sanitation subject.

The Bench also observed that the provision in the Maharashtra Prevention of Food Adulteration Rules prohibited food articles in emergent situation.

In the absence of such a rule in the State, the State Government did not have power to prohibit the manufacture and sale of the petitioners' product.

Besides, it was not the case of the Government that the level of pesticide residues found in samples tested by the Centre for Science and Environment (CSE) or the Public Analyst of the Government could have resulted in an epidemic like situation. The Government had only contended that such level of pesticides would be injurious to health.

Besides, the court also noted that the Bureau of Indian Standards had not prescribed any standard for the finished products.

The court found that the orders were passed without observing the principles of natural justice such as issuing notice to the companies and hearing them. So, the State had no power to prohibit their manufacture and sale.

As for the contention of the State Government that the ban orders were passed on the basis of a communication from the Union Ministry of Health and Family Welfare about the CSE report, the court noted that there was no hint in the letter of the Ministry on the need to ban the products. If the very basis of the ban orders was the letter, the State Government should have reversed the ban orders on clarification by the Minister concerned on the floor of Parliament that the CSE report did not provide any details required for confirmatory interpretation of the results.

The court said that once the report was not accepted by the Central Government, which had the power to ban the products, it was not fair on the part of the State Government to have continued the prohibition of the products.

The Bench also pointed out that it was conceded that the report of the Central Food Laboratory would supersede the report of the Public Analyst of the Government. If that be so, the State Government ought to have waited for such report. The stand of the Government was that the ban order would be passed first and the hearing of the petitioners would be made later.

Related Stories:
Kerala HC admits two writs on cola ban
Kerala Govt bans Coke, Pepsi production, sale
LDF for ban on colas in Kerala

(This article was published in the Business Line print edition dated September 23, 2006)
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