The Supreme Court of India recently quashed criminal proceedings against PepsiCo initiated by Punjab under the Prevention of Food Adulteration Act. This decision followed PepsiCo’s agreement to pay a Rs 3 lakh penalty related to misbranding issues identified in 2007. The case emerged after inspections found regulatory non-compliance concerning Gatorade labeling.
New Delhi: In a landmark decision, the Supreme Court of India on Friday (Jan 24th) quashed criminal proceedings initiated against beverage giant PepsiCo by the State of Punjab under the Prevention of Food Adulteration Act, 1954 (PFA Act). The case revolved around allegations of misbranding and mislabeling, and the apex court brought the matter to a close after PepsiCo agreed to pay a penalty of Rs 3 lakh.
The case dates back to August 9, 2007, when a government food inspector inspected Doon Bakers in Jalandhar and found 20 bottles of Gatorade allegedly misbranded. The inspector purchased three bottles for testing, which revealed non-compliance with regulations regarding batch numbers and manufacturing dates. Consequently, a complaint was filed against PepsiCo and its associates under Section 7 read with Section 16 of the PFA Act.
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On December 13, 2007, the Additional Chief Judicial Magistrate (ACJM) issued an order establishing a prima facie case against Doon Bakers, PepsiCo, and Tropicana Beverages for violating Rules 32 & 50 of the Prevention of Food Adulteration Rules, 1955.
While the case was pending, the PFA Act was repealed and replaced by the Food Safety and Standards (FSS) Act, 2006, effective May 28, 2008. The FSS Act established the Food Safety and Standards Authority of India (FSSAI) and reclassified offences like misbranding as civil violations, punishable by monetary penalties rather than criminal prosecution.
In 2010, PepsiCo moved the Punjab and Haryana High Court to quash the proceedings, arguing that the public analyst’s findings were incomplete. It contended that while the product label lacked certain information, details such as batch numbers were printed on the bottle caps, a common practice in large-scale manufacturing. PepsiCo also pointed out that under the FSS Act, many pending cases against food businesses should be reconsidered or withdrawn.
The case eventually reached the Supreme Court. In December 2024, the court directed the State of Punjab to consider closing the complaint as per the High Court’s recommendations. On Friday, the State informed the court that the case could be resolved if PepsiCo paid Rs 3 lakh, the maximum penalty under the FSS Act for misbranding.
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After PepsiCo agreed to the payment, the Supreme Court quashed the complaint. The bench, comprising Justices Abhay S Oka and Ujjal Bhuyan, stated:
“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.”
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.
Case Title – PepsiCo v. State of Punjab
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