The Supreme Court on Monday (October 5, 2026) set aside a Bombay High Court direction ordering the Maharashtra Food and Drug Administration (FDA) to pay ₹5 lakh compensation to a Pune-based dairy and sweets establishment whose food licence had been suspended following a food poisoning complaint.

The order was passed in State of Maharashtra & Ors. v. M/s Gurunanak Dairy & Sweets on October 5, according to a press note issued by the Maharashtra FDA.

The case dates back to June 12, when FDA food safety officers in Pune inspected the establishment following a complaint of food poisoning. Officials found deficiencies relating to hygiene, maintenance of records, labelling, and the personal hygiene of employees, following which its food licence was suspended under the Food Safety and Standards Act, 2006.

According to the FDA, a sample of "Malai Pedha" collected from the establishment during the inspection was subsequently declared unsafe. The State argued before the Supreme Court that the suspension was therefore undertaken in the interest of public health and in accordance with the Food Safety and Standards Act.

The proprietor challenged the suspension by filing a statutory appeal before the Commissioner, FDA, on June 15. The establishment subsequently submitted a compliance report on July 9, following which the FDA carried out a reinspection on July 13, four days after receiving the report.

The establishment later approached the Bombay High Court through Writ Petition No. 9905 of 2026. On August 17, the High Court revoked the suspension of its food licence and directed the FDA to deposit ₹5 lakh as compensation for business losses suffered by the establishment.

The Maharashtra government challenged the compensation direction before the Supreme Court. It argued that the FDA had acted promptly at every stage and that the establishment's statutory appeal before the FDA Commissioner was pending and had been reserved for a decision.

The State further maintained that the FDA's actions were neither malicious nor arbitrary and that there had been no deliberate delay. It argued that time taken in good faith during a statutory process could not form the basis for imposing a financial penalty or compensation on the government.

Accepting the State's submissions, the Supreme Court set aside the Bombay High Court's direction requiring the FDA to pay ₹5 lakh and quashed the compensation order, according to the press note.