Supreme Court clarifies vendor protection under Prevention of Food Adulteration Act in M/s Sri Mahavir Agency vs. State of West Bengal (2023)

Date of the Judgment: 17 April 2023

Citation: 2023 INSC 375

Judges: Abhay S. Oka, J. and Rajesh Bindal, J.

Can a vendor be held liable for selling adulterated food when they have purchased it from a manufacturer with a warranty? The Supreme Court of India recently addressed this question in a case concerning the sale of ‘Pan Parag’ pan masala. The core issue was whether the vendor, M/s Sri Mahavir Agency, could claim protection under Section 19(2) of the Prevention of Food Adulteration Act, 1954, given that they had a warranty from the manufacturer. The two-judge bench of Justices Abhay S. Oka and Rajesh Bindal delivered the judgment, with Justice Rajesh Bindal authoring the opinion.

Case Background

The case originated from a complaint filed against M/s Sri Mahavir Agency (the appellant) under Section 16(1)(a)(i) read with Section 7 of the Prevention of Food Adulteration Act, 1954. The accusation was that the appellant sold adulterated ‘Pan Parag’ pan masala. The pan masala was purchased by Chanda Aggarwal from the appellant. Initially, the complaint was filed against Chanda Aggarwal and Binod Agarwal, but they were later given protection under Section 19(2) of the Act after producing a bill showing the purchase from the appellant. The samples of the pan masala, when tested, failed to meet the prescribed standards twice—once by the Public Analyst for Calcutta Municipal Corporation and again by the Central Food Laboratory at CFTRI, Mysore.

Timeline:

Course of Proceedings

The Senior Municipal Magistrate, Calcutta, convicted the appellant and sentenced him to six months of rigorous imprisonment. The Additional District & Sessions Judge, Fast Track Court, Calcutta, upheld this conviction in appeal. The High Court at Calcutta dismissed the revision petition filed by the appellant. The appellant then approached the Supreme Court.

Legal Framework

The case revolves around the interpretation of the Prevention of Food Adulteration Act, 1954, specifically Sections 14 and 19.

Section 14 of the Prevention of Food Adulteration Act, 1954 mandates that manufacturers, distributors, and dealers provide a warranty in writing to vendors regarding the nature and quality of the food article. It states:

“14. Manufacturers, distributors and dealers to give warranty .—No manufacturer or distributor of, or dealer in, any article of food shall sell such article to any vendor unless he also gives a warranty in writing in the prescribed form about the nature and quality of such article to the vendor:
Provided that a bill, cash memorandum or invoice in respect of the sale of any article of food given by a manufacturer or distributor of, or dealer in, such article to the vendor thereof shall be deemed to be a warranty given by such manufacturer, distributor or dealer under this section.
Explanation. —In this section, in sub-section (2) of Section 19 and in Section 20-A, the expression “distributor” shall include a commission agent.”

The proviso to Section 14 clarifies that a bill, cash memo, or invoice serves as a warranty.

Section 19(2) of the Prevention of Food Adulteration Act, 1954 provides defenses for vendors in prosecutions under the Act. It states:

“19. Defences which may or may not be allowed in prosecutions under this Act .—(1) It shall be no defence in a prosecution for an offence pertaining to the sale of any adulterated or misbranded article of food to allege merely that the vendor was ignorant of the nature, substance or quality of the food sold by him or that the purchaser having purchased any article for analysis was not prejudiced by the sale.
(2) A vendor shall not be deemed to have committed an offence pertaining to the sale of any adulterated or misbranded article of food if he proves —
(a) that he purchased the article of food —
(i) in a case where a licence is prescribed for the sale thereof, from a duly licensed manufacturer, distributor, or dealer.
(ii) in any other case, from any manufacturer, distributor, or dealer, with a written warranty in the prescribed form; and
(b) that the article of food while in his possession was properly stored and that he sold it in the same state as he purchased it.
(3) Any person by whom a warranty as is referred to in Section 14 is alleged to have been given shall be entitled to appear at the hearing and give evidence.”

Specifically, Section 19(2)(a)(ii) states that a vendor is not liable if they purchased the food with a written warranty.

Rule 12A of the Prevention of Food Adulteration Rules, 1955 specifies that the warranty can be given either separately or in the bill, cash memo, or a label, in Form VIA.

Arguments

Appellant’s Arguments:

• The appellant argued that they were merely a vendor who purchased the ‘Pan Parag’ from the manufacturer, M/s Kothari Pouches Limited, in sealed packaged condition and sold it to customers.
• The appellant contended that they had a warranty from the manufacturer in the form of a bill, which included a specific note regarding the nature and quality of the product.
• The appellant claimed protection under Section 19(2) of the Prevention of Food Adulteration Act, 1954, arguing that they had purchased the product with a written warranty.
• The appellant relied on the Constitution Bench judgment in Mangaldas Raghavji Ruparel and another v. State of Maharashtra [AIR 1966 Supreme Court 128] to assert that a “vendor” is simply someone who sells an allegedly adulterated food item.

Respondents’ Arguments:

• The respondents argued that the samples of ‘Pan Parag’ were collected from the business premises of Chanda Aggarwal, who had purchased the product from the appellant.
• The respondents pointed out that the samples failed the tests conducted by both the Public Analyst and the Central Food Laboratory.
• The respondents submitted that the appellant could not be allowed to escape liability on technical grounds and argued that the warranty produced by the appellant was not in the prescribed form.
• The respondents argued that the appellant could not be considered a vendor.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was:

1. Whether the appellant, as a vendor, could claim protection under Section 19(2) of the Prevention of Food Adulteration Act, 1954, given that they had a warranty from the manufacturer.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

• Mangaldas Raghavji Ruparel and another v. State of Maharashtra [AIR 1966 Supreme Court 128] – The Supreme Court of India defined the term “vendor” as a person who has sold the article of food, which is alleged to be adulterated.

The Court also considered the following legal provisions:

• Section 14 of the Prevention of Food Adulteration Act, 1954 – This section mandates that manufacturers, distributors, and dealers provide a warranty in writing to vendors regarding the nature and quality of the food article.
• Section 19(2) of the Prevention of Food Adulteration Act, 1954 – This section provides defenses for vendors in prosecutions under the Act, specifically stating that a vendor is not liable if they purchased the food with a written warranty.
• Rule 12A of the Prevention of Food Adulteration Rules, 1955 – This rule prescribes the procedure to give warranty.

Authority Consideration Table

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court relied on Mangaldas Raghavji Ruparel and another v. State of Maharashtra [AIR 1966 Supreme Court 128]* to define the term “vendor” as a person who sells the allegedly adulterated food item.
• The Court considered Section 14 of the Prevention of Food Adulteration Act, 1954* to understand the requirement of warranty by the manufacturer, distributor or dealer to the vendor.
• The Court considered Section 19(2) of the Prevention of Food Adulteration Act, 1954* to understand the defense available to a vendor in case of prosecution.
• The Court considered Rule 12A of the Prevention of Food Adulteration Rules, 1955* to understand the procedure to give warranty.

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the fact that the appellant, being a vendor, had purchased the ‘Pan Parag’ with a written warranty from the manufacturer. The Court emphasized that the invoice served as a valid warranty, thereby entitling the appellant to protection under Section 19(2) of the Prevention of Food Adulteration Act, 1954. The Court also relied on the definition of a ‘vendor’ as provided in the case of Mangaldas Raghavji Ruparel and another v. State of Maharashtra [AIR 1966 Supreme Court 128]. The Court emphasized on the fact that the vendor had sold the article of food after purchasing the same from the manufacturer through the invoices which contained the warranty as prescribed under the Act and the Rules.

Logical Reasoning

Judgment Analysis

The Supreme Court held that the appellant was entitled to the protection under Section 19(2)(a) of the Prevention of Food Adulteration Act, 1954. The Court observed that the invoice provided by the manufacturer contained a certification stating that the goods were warranted to be of the nature and quality they purported to be. This certification was deemed to be a warranty in the prescribed form as per the proviso to Section 14 of the Act. The Court stated, “A perusal of the aforesaid certification given by the manufacturer of the ‘Pan Masala’ shows that it was in terms of the requirement of law.”

The Court also clarified that the term “vendor” refers to a person who has sold the article of food alleged to be adulterated, as held in Mangaldas Raghavji Ruparel and another v. State of Maharashtra [AIR 1966 Supreme Court 128]. The Court noted, “The word “Vendor” though not defined in the Act, would obviously mean the person who had sold the article of food which is alleged to be adulterated.” The Court concluded that since the appellant had purchased the ‘Pan Parag’ with a warranty and sold it in the same condition, they were entitled to the protection under Section 19(2). The court stated, “In the case in hand, it is the appellant who sold the article of food after purchasing the same from the manufacturer through the invoices which contained the warranty as prescribed under the Act and the Rules.”

The Court did not delve into alternative interpretations of the law, focusing on the plain reading of Section 19(2) and the definition of a vendor. There were no dissenting opinions in this case.

Key Takeaways

• A vendor who purchases food items with a written warranty from the manufacturer, distributor, or dealer is protected under Section 19(2) of the Prevention of Food Adulteration Act, 1954.
• An invoice containing a warranty about the nature and quality of the food article is considered a valid warranty under the Act.
• The term “vendor” refers to a person who sells the allegedly adulterated food item.
• Vendors are not liable if they sell packaged food items in the same condition as they purchased them, provided they have a valid warranty.

Directions

The Supreme Court set aside the impugned judgment and final order of the High Court. The bail bonds of the appellant were discharged.

Development of Law

The ratio decidendi of the case is that a vendor who sells a packaged food item with a manufacturer’s warranty is protected under Section 19(2) of the Prevention of Food Adulteration Act, 1954, if the food is found to be adulterated. This case reinforces the protection afforded to vendors who rely on manufacturer warranties, provided the warranty is in the prescribed form. This ruling clarifies the scope of vendor liability under the Act, ensuring that vendors who sell packaged goods in the same condition as purchased are not held liable for adulteration, provided they possess a valid warranty.

Conclusion

The Supreme Court’s judgment in M/s Sri Mahavir Agency vs. State of West Bengal clarifies that a vendor who sells packaged food items with a manufacturer’s warranty is protected under Section 19(2) of the Prevention of Food Adulteration Act, 1954. The Court emphasized that an invoice containing a warranty is sufficient to provide this protection, thereby setting aside the conviction of the appellant. This decision provides clarity on the responsibilities and protections afforded to vendors under the Act.