The story so far: The Maharashtra Food and Drug Administration (FDA) has intensified inspections of restaurants, hotels and other food businesses in recent months, with several establishments facing suspension of their food licences over alleged hygiene and food-safety violations.
What have the courts said?
It has drawn attention to a provision that allows authorities to suspend a food licence immediately in the interest of public health. The cases raise an important legal question: Can a food-safety authority immediately suspend a licence when it finds violations, or must it first allow the business to rectify them? What happens to the consumer if they sustain an injury? If the designated officer has reasonable grounds to believe that an FBO has failed to comply with the regulations, the officer may issue an improvement notice. The notice must state the grounds for believing that the business has failed to comply, specify the violations, specify the measures required to bring the business into compliance, and give the business a reasonable period to take corrective measures. In V.B. Muraleedharan v. The Madras High Court in A.R. Dairy Food (P) Ltd. v. The same cannot be allowed to operate indefinitely. If at all the designated officer arrives at an opinion that the licence of the petitioner should be suspended, since suspension is an interim measure, it cannot be allowed to operate for a period of more than six weeks. In Wardha Tahsil Go-Dugdha Utpadak Sahakari Sangh Ltd. v. It also found that industrial ice marked as non-edible had been added to buttermilk. The Bombay High Court did not treat all these findings alike. It held that immediate suspension without an improvement notice requires circumstances indicating a possible harmful effect on health, or reasonable grounds to suspect a risk to human health, depending upon the nature, seriousness, and extent of the risk identified. On the facts, the court identified the buttermilk prepared with industrial ice as presenting such a potential risk. The remaining deficiencies did not fall within the same category. In Akshay Dairy Farm v. In Saraswati Milk Products (P) Ltd. v. It also took into account the non-supply of the inspection report before action was taken. In Sayaji Hotels (Indore) Ltd. v. The hotel then moved the Bombay High Court, submitting that the order was drastic and disproportionate. The court ultimately restored the licence. It addressed the changed circumstances. The deficiencies that had led to the preventive suspension had substantially been rectified.
Under the Food Safety and Standards Act, 2006, food business operators (FBO) are defined as any undertaking, whether private or public, for profit or not, carrying out any of the activities related to any stage of manufacture, processing, packaging, storage, transportation, distribution of food, imports; including food services, sale of food, or food ingredients. Importantly, this period cannot be less than 14 days. Commr. of Food Safety (2020) , the Kerala High Court held that the non-serving of an improvement notice will not be a ground for challenging an action taken by the designated officer on the basis of a test report. Food Safety and Standards Authority of India (2025) made clear that suspension of licence as a measure to redress the violations of the Act and the Regulations made thereunder is only an interim measure. State of Maharashtra, (2026) , the inspection recorded numerous deficiencies concerning storage, sanitation, hygiene, pest control, training and documentation. State of Maharashtra (2026) , the Bombay High Court, prima facie , found that it appears that the justifiability of the direct action of suspension of the licence, without providing an opportunity to rectify the defects as envisaged by the provisions contained in Section 32, warrants consideration. State of Maharashtra(2026) , the court noted 73% compliance and approximately 17 deficiencies, but found, prima facie , that immediate suspension was unnecessary. Food Safety and Standards Authority of India (2026) , the Madhya Pradesh High Court noted that the impugned order does not spell out any adequate reasons to show that it was imperative in the interest of public health to straightaway suspend the licence and that service of notice as a lesser measure, in the consideration, would not have served the purpose. As per the FDA, the hotel had secured a 95% compliance score, but insects had been found in the kitchen area, resulting in the suspension. Recently, on August 28, in Siddharth Agro v. State of Maharashtra (2026) , the Bombay High Court dealt with the continuation of a licence suspension after the establishment had taken corrective measures.
It therefore quashed the suspension of the entire licence, while preserving the authorities’ ability to issue an improvement notice or take prohibitory action in relation to the buttermilk. Therefore, justification of direct action of suspension of license without providing any opportunity to the petitioners to rectify the defects as envisaged to the provisions contained in Section 32 of the Act, 2006 warrants consideration.
Section 32 of the Act deals with “improvement notices”. The court observed that issuance of an improvement notice is only discretionary, and it cannot be said that in all cases of adulteration, misbranding, etc., improvement notice has to be given. Within the said period, the designated officer may take a decision on the cancellation of the licence of the petitioner. The court said that the impugned order does not spell out adequate reasons to show that it was imperative in the interest of public health to straightaway suspend the licence and that a lesser measure, in the circumstances of the case, would not serve the purpose. The court said, “The shortcomings which has been shown regarding procurement of certain food articles without having any manufacturing/expiry date or batch number or finding of certain food articles in squalor in midst of cockroaches and rats and, their beets would not entail invocation of the proviso automatically rather a opportunity was required to be given to rectify the said shortcomings, by serving an improvement notice thereupon. The FDA on July 3 suspended the Food Safety Standards Authority of India (FSSAI) licence of Park Inn by Radisson hotel, citing “serious lapses in hygiene, sanitation, food storage and food handling practices”, a day after its surprise inspection of the premises.
If the business fails to comply with the improvement notice, its licence may be suspended. If it continues to fail to comply, the Designated Officer may cancel the licence, but only after giving the licensee an opportunity to show cause. The Officer can issue or cancel food business licences, prohibit the sale of food that violates the law, get food samples tested, recommend or launch prosecutions, maintain inspection records, investigate complaints against food businesses and Food Safety Officers, and perform other duties assigned by the Commissioner. “We have noticed in several matters listed before us, that even after an establishment has duly complied with the deficiencies pointed out by the Respondents, the suspension or cancellation order is not revoked. The result of such inaction is extremely serious, as the establishment is prevented from carrying on its business. This causes financial loss to the establishment and has a cascading effect on its employees and supply chains. In our view, there cannot be any justification for requiring an establishment to approach this Court merely to secure revocation of an order which has ceased to have any efficacy. Such litigation is wholly avoidable and unnecessarily burdens both, the establishment and the Court.” the court observed. It thus directed the FDA that once the authority is satisfied, including through the relevant inspection report, that the deficiencies have been duly rectified, the suspension or cancellation order should be revoked.
However, the proviso to Section 32(3) permits that that the Designated Officer may suspend any licence forthwith in the interest of public health for reasons to be recorded in writing. Under Section 36 of the Act, the designated officer who is appointed by the Commissioner of Food Safety shall be at least a Sub-Divisional Officer and shall be in charge of food safety administration in each district. Under Section 65 of the Act, if a person manufactures, distributes, sells or imports food that causes injury or death to a consumer, the adjudicating officer or court may direct the person to pay compensation to the victim or their legal representative.
The statutory scheme is therefore intended to allow a food business to correct deficiencies before its licence is suspended.
The compensation shall be not less than ₹5 lakh in case of death, up to ₹3 lakh for grievous injury, and up to ₹1 lakh for other injuries. In case of death, interim relief must be paid to the next of kin within 30 days. It must be paid at the earliest and within six months of the incident. In cases of grievous injury or death, the offender’s name, address, offence and penalty may also be published at their expense. The licence may be cancelled, food may be recalled from the market, and the establishment and property may be forfeited; in other cases, prohibition orders may be issued.
