Nestle India shares gain after NCDRC dismisses government’s plea in 2015 Maggi noodles case

Nestle India shares gained in morning trade on Friday after the company received a favourable order from the National Consumer Dispute Redressal Commission (NCDRC) in 2015 Maggi Noodles case.

The FMCG giant, in a filing to the stock exchanges on Thursday, said that the NCDRC has dismissed the Central government's plea against Nestle India on indulgence in 'unfair trade practice' in sale of Maggi noodles.

The order dated April 2 was passed by NCDRC in favour of the company and the apex consumer disputes resolution forum dismissed the Centre’s appeal against the sale of Maggi.

Nestle shares gained 1% to hit a high of ₹2,576 apiece on the NSE.

The National Consumer Dispute Redressal Commission (NCDRC) rejected the plea of the government seeking ban on Maggi sales and damages of more ₹600 crore for alleged unfair manufacturing practices. The Department of Consumer Affairs in 2015 pleaded before the NCDRC that by selling Maggi Noodles in the past, Nestle indulged in unfair trade practices by manufacturing and selling hazardous and defective goods to the public.

The government sought compensation of ₹284.55 crore and punitive damages of ₹355.41 crore and a ban on the sale of Maggi noodles.

Food safety regulator FSSAI in June 2015 banned sales of Maggi noodles for allegedly containing lead beyond permissible limits. Nestle India was forced to recall the product from the market. However, in November 2015, the popular noodles product was back in market following a legal battle by Nestle. The FMCG company maintained that it was a case of “application of incorrect standards". Nestle faced a fine of ₹45 lakh from district authorities for failing lab tests.

Nestle India shares were trading 0.34% lower at ₹2,542.15 apiece on the NSE at 11:50 am.