The Supreme Court on Friday quashed criminal proceedings initiated against beverage giant PepsiCo by the State of Punjab for misbranding and mislabeling under the Prevention of Food Adulteration Act, 1954. [PepsiCo v. State of Punjab].A Bench of Justices Abhay S Oka and Ujjal Bhuyan said, “Leave granted. Heard Learned Counsels. Complaint subject matter shall stand quashed subject to the appellant paying Rs 3 lakhs with Adjudicating officer Jalandhar appointed under FSSAI.”.The controversy began when a government food inspector inspected Doon Bakers in Jalandhar on August 9, 2007 and found 20 bottles of Gatorade that were allegedly misbranded. The inspector purchased three bottles for testing, and the subsequent analysis revealed that the product labels did not comply with specific regulations regarding batch numbers and manufacturing dates. Consequently, a complaint was filed against PepsiCo and its associates for breaching food safety laws.Doon Bakers, Pepsico and Tropicana Beverages were charged in a complaint filed before the Additional Chief Judicial Magistrate (ACJM). On December 13, 2007, the ACJM issued an order finding a prima facie case for the commission of an offence under Section 7 read with Section 16 of the Prevention of Food Adulteration Act, 1954 (PFA Act) and Rules 32 & 50 of the Prevention of Food Adulteration Rules, 1955 (PFA Rules)..During the pendency of the complaint, the PFA Act was replaced by the Food Safety and Standards (FSS) Act, 2006, effective from May 28, 2008. The FSS Act established the Food Safety and Standards Authority of India (FSSAI) and reclassified offences like misbranding as civil wrongs rather than criminal acts. The case ultimately reached the Punjab and Haryana High Court in 2010 by way of a petition to quash the criminal proceedings. PepsiCo argued that the public analyst's findings were based on an incomplete examination of the product. It contended that while the main label lacked certain details, this information was actually printed on the cap of the bottle, which was overlooked during the analysis. The defense asserted that it is common practice for large-scale manufacturers to print variable information such as batch numbers on bottle caps rather than labels to streamline production.Additionally, PepsiCo highlighted that since the FSS Act has replaced the PFA Act, many pending cases against food businesses should be reconsidered for withdrawal. It referenced previous court decisions where similar complaints were quashed based on updated regulations.The High Court, however, refused the quash the complaint..A 2016 FSSAI letter urged state governments to review and consider withdrawing pending cases under the repealed PFA Act, particularly those involving minor offences with minimal penalties, to reduce the judicial burden.The High Court noted that the case involved misbranding, not adulteration, and was triable summarily under Section 16A of the PFA Act. Under the FSS Act, such offences now attract only a monetary penalty under Section 52, emphasising a shift towards a less punitive approach. It thus allowed the State to consider withdrawing the case if PepsiCo approached authorities within two months.It said that the State could impose penalties under the FSS Act before withdrawal. If the State chose not to withdraw, it was directed to issue a reasoned order, leaving the petitioner to face prosecution under the law..The case ultimately reached the Supreme Court in appeal. In December 2024, the apex court asked Punjab to consider closing the complaint as per the directions of the High Court and listed the case for hearing today. The State informed the Supreme Court that the complaint could be closed if PepsiCo pays ₹3 lakh, the maximum penalty contemplated under the FSS Act for misbranding. After PepsiCo agreed to pay the amount, the case was quashed..PepsiCo was represented by Advocates Rajesh Batra, Dheeraj Nair, Anjali Anchayil, Sonia Kukreja, Suparba Chattaraj and Rohit Chandra from JSA Advocates & Solicitors. The State of Punjab was represented by Advocate Karan Sharma.
