FSSAI Licence Suspension in Mumbai: The Law Behind the FDA's Restaurant Shutdowns

Vikrant D. Shetty

Aug 3

9 min read

Updated: Aug 26

Over July and August 2026, the Maharashtra Food and Drug Administration suspended the food business licences of K Rustom, Parsi Dairy Farm and Poornima Restaurant, three establishments with a combined history running past two centuries, as part of a statewide enforcement drive under FDA Commissioner Tukaram Mundhe. The action has been reported as extending to well over a thousand inspections across Mumbai, Pune and Aurangabad, and it has already produced litigation: at least one suspension has been quashed by the Bombay High Court, another has been stayed, and a third remains under challenge. This piece sets out the statutory basis on which such suspensions are issued, where the FDA's power ends, and what remedies are actually available to an affected food business.

The Statutory Licence Requirement

Section 31 of the Food Safety and Standards Act, 2006 (the "FSS Act") makes it unlawful for any person to operate a food business in India without a valid licence or registration issued under the Act. This single requirement is the foundation on which the entire enforcement architecture rests: because the licence itself can be suspended or cancelled, suspension functions as an immediate and complete stop-business order, distinct from a fine or a prosecution, which would leave the business operating while proceedings continue.

Licences are administered through Designated Officers and Licensing Authorities operating under the FSSAI's central regulations. In Maharashtra, this function sits with the FDA, whose Designated Officers issue improvement notices, suspension orders and cancellation orders under Section 32 of the Act.

Two Routes to Suspension

The Act contemplates two distinct pathways to suspending a food licence, and the difference between them is what most of the current litigation turns on.

The Standard Route: Improvement Notices

Where a Designated Officer has reasonable ground to believe a food business operator has failed to comply with food safety regulations, Section 32 requires an "improvement notice" as the first step. The notice must state the grounds for the belief, specify the failure, set out the measures needed to secure compliance, and give the operator a period of not less than fourteen days to comply.

If the operator fails to comply within that period, Regulation 2.1.8 of the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011 permits suspension, but even at this stage the operator retains procedural protection: the authority must give a reasonable opportunity of being heard and must record a brief statement of reasons, a copy of which goes to the operator. The authority may then order a reinspection, to be carried out within a further reasonable period of no less than fourteen days. Only if the deficiencies persist after that reinspection can the licence be cancelled, and even then, Section 32(3) requires the authority to give the operator an opportunity to show cause before cancellation is ordered.

The Emergency Route: Suspension "In the Interest of Public Health"

Regulation 2.1.8 also contains a non-obstante clause: notwithstanding the improvement notice procedure described above, the Licensing Authority may suspend or cancel a licence forthwith, without any prior notice, where it considers this necessary in the interest of public health, provided the reasons are recorded in writing.

This is the power that has been invoked, or is reported to have been invoked, against most of the establishments caught in the current drive. Findings such as live rodents, fungal contamination or insect infestation are treated as immediate risks to public health rather than defects an operator should be given fourteen days to fix, and the improvement notice stage is dispensed with entirely.

This gap has real consequences. An operator suspended under the standard route has already had a hearing and a written statement of reasons before the suspension bites. An operator suspended under the emergency route often has neither, and the first notice of the finding may be the stop-business order itself.

What Was Actually Suspended

K Rustom's outlet near Churchgate was shut from 8 July 2026 after an inspection reportedly found live rats, expired flavouring agents and milk fat below the FSSAI's prescribed minimum. Parsi Dairy Farm, operating since 1916, had its licence suspended after inspectors recorded fungal growth, fly infestation and a damaged raw milk reception dock, alongside the seizure of food products worth over one point nine crore rupees across its Mumbai and Palghar facilities. Poornima Restaurant in Fort, trading for roughly six decades, was suspended on 24 July 2026 after inspectors found fungal growth on stored vegetables and other hygiene lapses.

Poornima did not simply comply. Its proprietor filed a writ petition before the Bombay High Court, arguing that the FDA had not issued an improvement notice before ordering the suspension, and that the deficiencies identified were capable of being rectified rather than an emergency. That petition remains pending, but the argument is not isolated. Two other proceedings from the same enforcement drive give a fairly clear picture of how the Court is approaching these cases.

When Courts Intervene

In a batch of petitions before the Aurangabad bench, eight dairy units challenged suspension orders issued without a prior improvement notice. The court granted interim relief, observing that the impugned action appeared to fall outside the scope of the procedure Section 32 mandates, since the law requires an improvement notice and an opportunity of hearing before such drastic action, and the fourteen-day window to correct deficiencies had not been afforded.

A more developed ruling came in Sanjay Baburao Nirbhavne v. State of Maharashtra & Ors. [Bombay High Court, order dated 29 July 2026], concerning the suspension of the FSSAI licence of Park Inn by Radisson in Navi Mumbai. A Division Bench of Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad quashed the FDA's suspension order after a fresh inspection, conducted pursuant to the court's own direction, rated the establishment as ninety-five per cent compliant with only one adverse finding remaining. The Court held that "the solitary finding regarding the presence of two insects, when viewed in the context of the overall inspection report recording the establishment as 'compliant / satisfactory', does not justify the continued suspension of the petitioner's licence." It went further on the purpose of suspension itself: "once it is demonstrated, on the basis of an independent inspection conducted pursuant to the orders of this court, that the establishment has substantially remedied the deficiencies and has attained 95% compliance, the continuance of the suspension order ceases to serve the purpose for which it was originally imposed."

Read together, these orders establish two related principles that matter to any business facing an emergency suspension. First, invoking the public health language of Regulation 2.1.8 is not by itself sufficient; the authority must show that the facts genuinely support dispensing with the improvement notice, and a court can and will examine that judgment rather than defer to it automatically. Second, suspension is a preventive measure, not a punitive one, so once an operator shows substantial compliance, continuing the suspension serves no purpose the Act recognises, and a court can direct that it be lifted even before formal cancellation or appeal proceedings run their course.

The Remedies Available to a Suspended Business

An operator facing suspension has several avenues, and they are not mutually exclusive.

Remedy	Trigger	Typical timeline	Forum
Compliance and reinspection	Standard-route suspension following an unheeded improvement notice	Reinspection ordered within a reasonable period, not less than 14 days	Licensing Authority (FDA)
Statutory appeal	Any suspension or cancellation order	No statutory outer limit specified in Section 96 itself; ordinarily pursued promptly	Commissioner of Food Safety
Show-cause hearing	Where the authority proposes to move from suspension to cancellation	Before the cancellation order is passed	Licensing Authority (FDA)
Writ petition	Procedural violation, disproportionate action, or urgency that a statutory appeal cannot address in time	Filed as soon as the cause of action arises; interim relief can be sought immediately	Bombay High Court, Article 226

Compliance and Reinspection

Where the suspension arose through the standard route, the fastest way back into business is usually the one built into the Regulations: rectify the defects identified in the notice, and apply for the reinspection Regulation 2.1.8 contemplates. If the Licensing Authority is satisfied, the suspension is lifted administratively, without any appeal or litigation.

Statutory Appeal to the Commissioner of Food Safety

Section 96 of the FSS Act allows any person aggrieved by an improvement notice, a refusal to certify compliance, or a suspension or cancellation order, to appeal to the Commissioner of Food Safety. The Commissioner's decision is treated as final within the Act's own scheme. This route does not require approaching a court and is generally the first formal recourse for an operator who disputes the merits of the FDA's findings rather than the procedure followed.

The Right to Be Heard Before Cancellation

If the FDA moves from suspension toward cancellation, Section 32(3) is a mandatory checkpoint: the operator must be given an opportunity to show cause before cancellation is ordered. This safeguard exists independently of whether the original suspension followed the standard or the emergency route, and an authority that skips it exposes the eventual cancellation order to challenge on that ground alone.

Writ Jurisdiction Under Article 226

Where the grievance is that the FDA bypassed the improvement notice procedure without a genuine public health justification, or failed to record adequate reasons, or continued a suspension after compliance was demonstrated, a writ petition under Article 226 of the Constitution is the appropriate remedy, as the Nirbhavne, Aurangabad and Poornima matters illustrate. The High Court does not sit as a food safety inspector re-weighing whether insects or fungal contamination were actually present. It examines whether the process the statute mandates was followed, and it has shown itself willing to grant interim relief, including directing reinspection, while the matter is pending. This is not unique to food licensing. A comparable pattern of statutory representation followed by writ relief also governs when Indian Customs detains a shipment, where an importer's practical options run through departmental representation before escalating to the High Court if the detention is not lifted.

The 2026 Licensing Reforms and Ongoing Enforcement Risk

The Food Safety and Standards (Licensing and Registration of Food Businesses) Amendment Regulations, 2026, notified in March 2026, removed periodic licence renewal in favour of perpetual validity for licences and registrations issued on or after 1 April 2026, coupled with annual regulatory fees payable in advance. The same amendment introduced risk-based inspections and mandatory third-party food safety audits for certain categories of business.

The renewal cycle previously gave businesses a natural, low-stakes point of contact with the licensing authority. With that removed, inspection-triggered enforcement becomes the primary point at which compliance is actually tested. A licence can also now be deemed suspended for failure to file annual fees or returns, apart from any hygiene finding, so businesses should confirm their status on the FoSCoS portal rather than assume perpetual validity has automatically applied.

Frequently Asked Questions

Can the FDA suspend a restaurant's licence without giving any notice at all?

Yes, but only through the emergency route under Regulation 2.1.8, and only where the authority records, in writing, why the interest of public health required immediate action rather than the standard improvement notice procedure. Courts have shown they will examine whether that justification genuinely exists on the facts.

What is the difference between suspension and cancellation?

Suspension is a temporary stop-business order pending compliance or further inspection. Cancellation is the termination of the licence itself, and under Section 32(3) it cannot be ordered without first giving the operator an opportunity to show cause, regardless of how the original suspension arose.

Does a business have to appeal to the Commissioner before it can go to the Bombay High Court?

Not necessarily. A statutory appeal under Section 96 is the ordinary route where the dispute concerns the underlying facts, such as whether the hygiene violations actually existed. Where the grievance is procedural, such as the absence of an improvement notice or inadequate reasons, a writ petition can be filed directly, particularly where the business needs interim relief that an appeal cannot deliver quickly enough.

How long can a suspension last before it must be reviewed?

The Regulations require the Licensing Authority to direct a reinspection within a reasonable period of not less than fourteen days from the suspension order. There is no fixed outer limit on the suspension itself, which is one reason courts have been willing to intervene where a suspension continues after compliance has been substantially shown.

What happens to food stock and equipment while a licence is suspended?

The Act does not authorise the FDA to appropriate stock or equipment merely because a licence is suspended, though unsafe or misbranded food found during inspection can independently be seized under other provisions of the FSS Act. Operators should document the condition and value of stock on the inspection date, since this matters both to compliance and to any later dispute.

Can a food business be prosecuted in addition to having its licence suspended?

Yes. Suspension and cancellation are administrative consequences under Sections 31 and 32. Separately, the FSS Act's penalty provisions allow for adjudication or prosecution over unsafe or substandard food, and these proceedings run independently of the licensing action.

Does the Bombay High Court's approach in Nirbhavne apply outside the hospitality sector?

Yes. Nirbhavne and the Aurangabad orders turn on the general procedural requirements of Section 32 and Regulation 2.1.8, which apply uniformly to any food business operator, including dairies, caterers and retail food outlets, so the same due process arguments are available wherever an emergency suspension is challenged.