2020 (3) TMI 1495 - HC - Indian Laws

Prosecution for peanut butter labeling quashed under LM Act; Rule 5 LMPC Rules misapplied, no milk content proven

HC quashed prosecution proceedings against petitioner regarding classification and labelling of peanut butter sold in sealed plastic bottles. The court ... Classification of peanut butter sold in sealed plastic bottles - un-canned packaged butter or not - 2nd schedule to the LMPC Rules does not classify the names of specific products and the classification is based on usage, type and nature of products - HELD THAT:- In the instant case, there is no finding to the effect that the product contains any milk or milk derivatives. In the absence of such a contention and in view of the specific provisions of the LM Act and Rule 5 of the LMPC Rules, it is failed to see how prosecution as provided to Sec. 36(2) of the LM Act would be liable to be initated as against the petitioner. The learned counsel for the petitioner also brought to notice the notifications later issued in the year 2017 under the Food Standard Regulations 2011, which included Peanut Butter as meaning cohesive, comminuted food product prepared from clean, sound, shelled peanuts or groundnuts by grinding roasted mature kernels from which the seed coats have been removed and which may contain sugar, liquid glucose and edible oils and fats permitted in the regulations. The contention in Ext. P2 notice as also in the counter affidavit is only to the effect that the petitioner had been selling Peanut Butter in violation of the declarations contained on the packages. However, such a finding is not supported by any material. The notices as impugned are unsustainable in view of the provisions of law as they stood as on the date when Ext. P2 notices were issued - Petition allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether 'peanut butter' sold in sealed plastic bottles can be treated as 'uncanned packages of butter' under the Second Schedule read with Rule 5 of the Legal Metrology (Packaged Commodities) Rules, 2011 for purposes of standard weights and prosecution under Section 36 of the Legal Metrology Act, 2009. 1.2 Whether initiation of prosecution under Section 36 of the Legal Metrology Act, 2009 was competent in the absence of any finding or material that the declarations on the peanut butter packages were incorrect or in contravention of the Act and Rules, and in the absence of any prescribed standard packaging for peanut butter at the relevant time. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Classification of 'peanut butter' under Legal Metrology (Packaged Commodities) Rules, 2011 Legal framework 2.1 The notices were issued by treating peanut butter in sealed bottles as 'uncanned packaged butter' under the Second Schedule read with Rule 5 of the Legal Metrology (Packaged Commodities) Rules, 2011, thereby requiring sale only in prescribed standard weights, and proposing prosecution under Section 36(2) of the Legal Metrology Act, 2009. 2.2 The Second Schedule to the Legal Metrology (Packaged Commodities) Rules, 2011 refers to 'uncanned packages of butter and margarine' but does not define 'butter' or 'peanut butter'. Neither 'uncanned package' nor 'peanut butter' is defined in the Legal Metrology Act, 2009 or in the said Rules. 2.3 The Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 define 'butter' as fatty products derived exclusively from milk of cow and/or buffalo or its products. Later notifications under the Food Safety Regulations (including the 2016 amendment and 2017 notifications) recognise 'peanut butter' as a cohesive comminuted food product prepared from peanuts/groundnuts, with permissive additions such as sugar, liquid glucose and edible oils/fats. Interpretation and reasoning 2.4 The Court noted that the proceedings against the petitioner were premised on the assumption that peanut butter is 'uncanned packaged butter' and that the declaration on the package that the product contains no milk or milk derivatives is incorrect merely because the product is called 'peanut butter'. 2.5 The Court accepted the contention that peanut butter is a distinct proprietary food, constituted almost entirely of peanuts/groundnuts with additives like sweeteners and edible oils, and that its name cannot, by itself, be determinative of its contents. 2.6 The Court observed that there was no allegation or finding that the product contains any milk or milk derivatives. On the contrary, the available food standards material (including the definition of butter and the later specific recognition of peanut butter) showed that 'butter' in the food regulatory regime is restricted to milk-based products, whereas peanut butter is a separate category of peanut/groundnut-based food product. 2.7 In the absence of any statutory definition of peanut butter in the Legal Metrology statutes, and in view of the specific food safety definitions and subsequent recognition of peanut butter as a peanut-based product, the Court rejected the respondents' assertion that peanut butter necessarily contains butter or is equivalent to butter. Conclusions 2.8 Peanut butter sold in sealed plastic bottles cannot, on the materials and legal provisions considered, be treated as 'uncanned packages of butter' under the Second Schedule read with Rule 5 of the Legal Metrology (Packaged Commodities) Rules, 2011. 2.9 The assumption in the impugned notices that peanut butter necessarily contains butter or milk derivatives, and that it therefore falls within the category of 'uncanned packages of butter', is unsustainable. Issue 2 - Validity of proposed prosecution under Section 36 of the Legal Metrology Act, 2009 Legal framework 2.10 Section 36 of the Legal Metrology Act, 2009 provides for penalty in cases where a pre-packaged commodity is packed, sold, etc., in a manner that does not conform to the statutory declarations on the package as required under the Act and Rules. 2.11 Rule 5 of the Legal Metrology (Packaged Commodities) Rules, 2011 and the Second Schedule prescribe standard quantities for specified commodities including 'uncanned packages of butter and margarine'. Interpretation and reasoning 2.12 The Court found that the impugned notices under Section 36 proceeded on the premise that the petitioner had violated the declarations contained on the packages by declaring that peanut butter contained no milk or milk derivatives, which the department considered to be incorrect, assuming that peanut butter contains butter. 2.13 The Court emphasised that the notices did not contain any allegation, supported by material, that the actual contents of the product were different from the declarations on the package, or that there was any misdeclaration regarding ingredients or quantity. 2.14 The Court noted that there was no finding that the product contained milk or milk derivatives, nor any prescribed standard packaging for peanut butter at the relevant time which could justify treating the goods as violative of standard quantity prescriptions. 2.15 In the absence of any material showing that the declarations were false or that the commodity fell within the scheduled category (uncanned packages of butter), the foundational requirement for invoking Section 36 of the Legal Metrology Act was not met. Conclusions 2.16 Prosecution under Section 36 of the Legal Metrology Act, 2009 cannot be validly initiated merely on the assumption that peanut butter is butter, without any finding or material that the declarations on the package are incorrect or that the product is misclassified under the Second Schedule. 2.17 As there was no prescribed standard packaging for peanut butter at the relevant time, and no established misdeclaration or non-conformity with statutory declarations, the proposal to initiate prosecution under Section 36 was incompetent. 2.18 The impugned notices seeking to proceed under Section 36 of the Legal Metrology Act, 2009 were contrary to the provisions of law as they stood on the date of issuance and were therefore set aside.