Days after the Maharashtra Food and Drug Administration (FDA) issued show-cause notices to Shah Rukh Khan, Ajay Devgn and Tiger Shroff, the Delhi High Court on Monday dismissed a plea by PB Agro LLP, the maker of Vimal Elaichi, seeking to quash the notices issued to its brand ambassadors.
The notices alleged that advertisements for Vimal Elaichi amounted to surrogate promotion of Vimal Pan Masala, a chewable product banned in Maharashtra.
Justice Swarana Kanta Sharma held that the petition was not maintainable before the Delhi High Court for lack of territorial jurisdiction. The court said Maharashtra courts were the more appropriate and convenient forum for the petitioner to raise its grievances concerning the impugned notice, in line with the doctrine of forum conveniens.
"The petition is therefore dismissed on this ground, without expressing any opinion on the merits of the petitioner's challenge. Pending application, if any, also stands disposed of."
What does the petition say?
In its petition, PB Agro LLP said it engages reputed actors to promote its cardamom product under the brand ''Vimal''. It said its endorsement agreements with the actors require the company to ensure that its advertising campaigns are in full compliance with applicable laws.
The company said the Maharashtra FDA had issued regulatory notices alleging that advertisements for Vimal Elaichi amounted to surrogate promotion of Vimal Pan Masala, a chewable product banned in Maharashtra.
According to the plea, the Maharashtra FDA directed the actors featured in the Vimal Elaichi advertisements to provide documents demonstrating that Vimal Elaichi is a product distinct from the banned pan masala products. The FDA also called for a halt to the promotional campaign and the withdrawal of related promotional material from digital platforms.
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Counsel for the petitioner had argued that the August 11 FDA notice was issued only to the actors and not to the company itself, despite the company being the party that would suffer irreparably from any action taken by the state regulator.
The petitioner was not even given an opportunity to be heard, the counsel had argued.
What did the HC say?
The High Court said the petitioner had failed to establish that any substantial or material part of the cause of action had arisen within the court's territorial jurisdiction.
"The impugned show-cause notice was issued by the FDA, Mumbai, state of Maharashtra – to the brand ambassadors engaged by the petitioner, who are residents of Mumbai – in relation to alleged activities and alleged statutory violations in Maharashtra.
"Though the petitioner has impleaded the ministry and the FSSAI, which are situated in Delhi, as parties in the writ petition, neither any specific relief is claimed against either of them, nor any direction or order passed by these authorities has been challenged before the court or even placed on record with the writ petition," it said.
The court said the fact that the petitioner operates its business from Delhi or engages brand ambassadors from Delhi could not, by itself, confer territorial jurisdiction on the Delhi High Court, particularly when the impugned notice was not issued to the petitioner. It said this was also consistent with judicial precedents of the Supreme Court and the High Court.
Justice Sharma said the court could not allow jurisdiction to be created by selectively referring to facts such as the petitioner's registered office, the place from which payments were made, or where the advertising campaign may have been conceived or managed, when such facts had no direct bearing on the validity of the impugned notice.
The court also said it must guard against situations where pleadings are moulded to project incidental facts as constituting the cause of action, while the material facts relating to the actual dispute lie elsewhere.
It added that facts which have no bearing on the lis (suit), or which are merely background facts, do not confer territorial jurisdiction merely because they are pleaded in the petition.
The company had also claimed that the Maharashtra FDA lacked jurisdiction to direct it to halt the advertisements.
It further argued that the allegations of surrogate advertising were baseless since Vimal Pan Masala had not been manufactured or sold in Maharashtra since 2001, while pan masala containing tobacco had been barred by the Supreme Court nationwide since 2013.
( With inputs from PTI )