Bombay High Court: While considering a writ petition challenging the continued suspension of a Pune sweet shop’s food licence by the Maharashtra Food and Drug Administration (FDA) despite a subsequent inspection recording 98 per cent compliance, the Division Bench of Ravindra V. Ghuge, ACJ., and Gautam A. Ankhad, J., held that food licence suspension cannot continue after 98 per cent compliance is achieved. The Court found the explanation that the suspension could not be revoked because an appeal was pending to be wholly unconvincing, observed that all deficiencies had been rectified, and consequently vacated the suspension order, restored the retail food business, and ordered Maharashtra FDA to pay ₹5 lakhs compensation for the loss suffered during the period of closure.
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Background
The petitioner was a dealer of sweets and dairy products since 2006. Its food licence under the Food Safety and Standards Act, 2006 (FSSA) had been renewed on 12 October 2022 and was valid up to 12 October 2027.
On 11 June 2026 and 12 June 2026, the petitioner’s premises were inspected by the Food Safety Officer pursuant to a complaint of food poisoning. During the inspection, deficiencies pertaining to sanitation, record-keeping, labelling and staff hygiene were noticed. Consequently, an order dated 12 June 2026 was passed suspending the food licence and directing closure of the business. The petitioner preferred an appeal before the Commissioner, FDA. Thereafter, a comprehensive compliance report dated 9 July 2026 was submitted addressing every observation and objection recorded during the inspection. Pursuant thereto, the authorities carried out a fresh inspection on 13 July 2026, awarded 35 out of 36 marks and recorded a compliance score of 98 per cent. The report further observed that the establishment was engaged only in retail activity and was required to modify its licence by removing the manufacturing category.
The respondents submitted that the suspension order had not been revoked because the appeal filed by the petitioner was pending and had already been heard and closed for judgment on 11 August 2026. It was also stated that the application seeking deletion of the “general manufacturing” category from the food licence was also not dealt with for the same reason.
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Analysis
The Court found the respondents’ submissions to be wholly unconvincing. The Court noted that the licence was suspended because deficiencies had been observed during the initial inspection. However, the petitioner subsequently removed all deficiencies and submitted a comprehensive compliance report.
The Court opined that if the pendency of the appeal was not an impediment for the respondents in inspecting the petitioner’s premises, there was no reason for them to continue with the suspension of the retail food licence only because an appeal was pending. The Court observed that if re-inspection was permissible notwithstanding the pendency of the appeal, the petitioner scoring 98 per cent compliance marks, should have fetched an order of instant recalling of the suspension order.
Describing the respondents’ explanation as a “lame excuse”, the Court questioned whether the authorities would have continued sitting over the suspension order even if no appeal had been filed, even though 98 per cent compliance had already been established. The Court emphasised that the removal of deficiencies was itself a lawful ground for immediate revocation of the suspension. The Court also noted that the petitioner earned around ₹25,000 per day and lost its business for almost 35 days, resulting in a loss of around ₹9 lakhs.
The Court noted that the petitioner’s reliance on its own earlier order in Pind Punjab v. Union of India, 2026 SCC OnLine Bom 8597, decided on 16 July 2026, was well placed. In that case, involving a nearly identical fact pattern, a fresh inspection had recorded 100% compliance after the petitioner cured all deficiencies, yet the suspension had not been revoked because an appeal remained pending. The Court had held that the proceedings initiated through that appeal “need not be taken forward” since full compliance had already been achieved, vacated the suspension forthwith, and directed that the pending appeal be treated as having achieved its purpose and disposed of accordingly.
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Decision
Considering the entire report and the compliance score, the Court directed Maharashtra FDA to compensate the petitioner’s loss of ₹9 lakhs, along with a compensatory payment of ₹5 lakhs only.
Accordingly, the Court allowed the writ petition and vacated the suspension order forthwith. The petitioner was permitted to restart its retail business while the FDA was directed to deposit ₹5 lakhs within 30 days. The pending appeal was disposed of as withdrawn at the petitioner’s request, and a formal order recording such withdrawal was directed to be passed. The Court further directed that the application seeking modification of the Food Safety and Standards Authority of India (FSSAI) licence by removing the “general manufacturing” category be decided within 72 hours and, if allowed, the modified licence be issued accordingly.
[Gurunanak Dairy & Sweets v. Union of India, 2026 SCC OnLine Bom 9410, decided on 17-8-2026]
Advocates who appeared in this case:
For the Petitioner: Abhijeet Desai with Vijay Singh, Mohini R. and Deepesh Ramakhiani, Advocates.
For the Respondents: A.P. Thipsay, ‘B’ Panel Counsel.
