Top court halts criminal charges against Pepsico

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Pepsico India and its directors will not face criminal proceedings after the Supreme Court set aside a judgment by Kerala High Court that had ordered them to do so in a case alleging pesticides in its drinks exceeded permissible limits.

In Pepsico India Holdings Pvt Ltd v Food inspector & Anr the apex court held that mere presence of insecticide residue could not justify the conclusion that an article of food had become injurious to health. Providing relief to the directors of Pepsico the court also held that: “A mere bald statement that a person was a director of the company against which certain allegations had been made is not sufficient to make such director liable in the absence of any specific allegations regarding his role in the management of the company.”

Pepsi_stallThe court also observed that failure of the government to frame rules about which laboratories could be used for testing samples, or to specify the methods of analysis and the liability of the directors of a delinquent company were of “great importance” for the inability to establish a charge under the Prevention of Food Adulteration (PFA) Act, 1954.

Tests on a sample taken from the premises of an associate of Pepsico in Kerala in 2006 were found to contain residue of a pesticide, carbofuran, to the extent of 0.001mg per litre. As such, the sample was seen to be adulterated within the meaning of rules framed under the PFA Act and a magistrate initiated proceedings against Pepsico and its directors. Pepsico had unsuccessfully challenged the magistrate’s order before Kerala High Court.

In the Supreme Court, Pepsico’s arguments included that even the Indian government had indicated that no country had prescribed standards for pesticide residue for sweetened carbonated water.

The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at [email protected] Readers should not act on the basis of this information without seeking professional legal advice.