NEW DELHI, Aug 12:
The damage claim from first of its kind class action suit against Nestle India is likely to go beyond Rs 640 crore as the Government is “tabulating further damages” for selling “defective and hazardous” Maggi noodles.
Yesterday, the Consumer Affairs Ministry had flied a case before the consumer forum NCDRC seeking Rs 284.45 crore in basic damages and another Rs 355.50 crore in punitive damages totalling Rs 639.95 crore from the Swiss giant.
Nestle India is also liable to pay interest at a rate of 18 per cent per annum until the date of actual payment.
In the petition, the ministry said it is in the process of “tabulating further damages” and will seek additional damages when further facts and data emerges.
The amount claimed will be deposited in the consumer welfare fund in the interest of consumers, the ministry said.
The claim is based on Nestle India’s total revenue in 2014, which stood at Rs 9,485.32 crore, of which Maggi and its variants accounted for 30 per cent share at Rs 2,845.59 crore.
The Consumer Affairs Ministry had filed a complaint against Nestle India before the National Consumer Disputes Redressal Commission (NCDRC) using a provision for the first time in the nearly three-decade-old Consumer Protection Act.
The first hearing of the case is expected on August 14.
The ministry in a statement today said: “The Department has filed this class action suit on behalf of the large number of consumers of Maggi against Nestle India on grounds of unfair trade practices, sale of defective goods and sale of Maggi Oats Noodles to the public without product approval.”
Meanwhile, in the petition, the department said, “The complaint is being filed to safeguard and protect the interest of millions of consumers who have been victims of defective, misbranded and hazardous goods/products…”
The ministry has claimed damages to the tune of Rs 639.95 crore as the loss and injury has been suffered by a large number of consumers who are not identifiable conveniently.
“The complainant has sought a sum of Rs 284.55 crore that the Opponent Company is liable to pay a sum of Rs 355.40 as punitive damages on account of the gross negligence, apathy and callousness on the part of the Opponent Company. Thus, the total claim is Rs 639.95 crore,” today’s statement said.
While the Consumer Protection Act provides for an individual to seek a minimum 5 per cent of the total sales of the company as damages, but the department has doubled it for Nestle India, sources said.
The department has claimed 10 per cent of the total domestic sale of Maggi noodles in 2014, which comes to Rs 284.45 crore, for causing damages to consumers by selling “defective and hazardous goods” and unfair trade practice.
Since Maggi masala noodles accounts for 30 per cent of the company’s total profit in 2014, the punitive damages of Rs 355.40 crore has been calculated accordingly.
“The punitive/exemplary damages are significant in the present case and are intended to reform and deter the Opponent and other food companies from engaging in conduct similar to that of the Opponent company, so that the common public does not suffer and is not helpless to protect its health and wellbeing,” it said in the petition. (PTI)
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