Bombay HC refuses immediate relief to UB, Mohan Meakin over FSSAI liquor ban

The Bombay High Court on Monday declined to grant immediate relief to liquor manufacturers in their petition challenging prohibitory orders passed against them by the Food Safety and Standards Authority of India (FSSAI). [United Spirits and Anr v. FSSAI & ORs.]

Companies including United Spirits and Mohan Meakin, which own liquor brands like McDowell’s No.1 and Old Monk respectively, approached the High Court after FSSAI took regulatory action which effectively halted the sale of their Indian-Made Foreign Liquor (IMFL) since June.

The FSSAI took the action citing misleading labelling and unauthorised flavour additions. The manufacturers then approached the High Court.

Additional Solicitor General Anil Singh, appearing for FSSAI, sought time to file a short reply in the matter before any order is passed by the Court. 

The lawyers for the liquor manufacturers prayed for stay on the prohibitory orders.

They argued that the orders effectively stopped the sale of their existing stock unless they relabel their products as ‘rum-flavoured spirits’.

However, a bench of acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad deemed it fit to have a reply from the FSSAI on record before passing any orders.

“The learned ASG submits on instructions that an affidavit-in-reply would be served on the petitioners before the matter is listed for hearing. It is in the light of the above statement, that we are refraining from passing any ad-interim orders today, expecting that the respondent Union of India will ensure that the copy of the affidavits-in-reply are served upon the petitioners,” the Court said.

The dispute stemmed from an FSSAI directive prohibiting sales of popular liquor products that add external rum or whisky flavours to spirits sold under standard product names.

FSSAI claimed that incorporating artificial or nature-identical rum or whisky flavoring masks a spirit's natural compositions. It makes it sub-standard and misleading to consumers unless labeled as a flavoured product or spirit with rum flavour.

The manufacturers moved the Court contending that the banned products were safely and lawfully sold for over five decades under the same rules. They argued this alone entitled them to interim relief pending the final hearing.

Senior Advocate Navroz Seervai, appearing for Old Monk, argued that he could establish on statutory record that the products were 100 percent compliant.

"I am losing a crore a day, the revenue (department) is losing money. This is just some bee in the bonnet of two people who have got an ego trip all over India. For 50 years, it has been sold as rum under the relevant statutory provision; nobody has complained, fallen ill or taken action,” he stated.

Senior Advocate, Birendra Saraf representing McDowell's, also echoed the same view.

“If this product I were to sell as it stands, it has not misled anyone for five decades because people have been consuming it, people know what they consume. The court will have to balance equities. On one side is a running business coming to a standstill altogether,” he argued.

They also urged the bench to consider the practical impossibility of altering existing labels overnight. They explained that any label modification requires a lengthy approval process through the State Excise mechanism.

The Bench said that core issue before it was about statutory compliance and not product quality. 

The petitions will be heard next on August 24.

Saraf was briefed by advocates Harsh Hiroo Gursahani, Suhaan Mukerji, Pragati Mishra and Shubhank Patel from PLR Chambers.