The Bombay High Court, in its judgement on Thursday, called the ban "arbitrary" and said it violated the "principles of natural justice".
"We have examined the evidence in great detail. Since the petitioner Nestle has already agreed not to make and sell Maggi until the food authorities are satisfied, we see no reason to allow any relief to food authorities," Justice Vidyasagar Kanade told the court.
"We direct that Nestle send five samples from each batch of Maggi for testing to three labs and only if the lead is found to be lower than permitted will they start manufacturing and sale again."
Nestle had gone to the court to challenge the nationwide ban ordered by India's food safety watchdog in June after tests by some states found lead levels exceeded statutory limits.
The Swiss food giant has always maintained the product is safe to eat, and has continued to sell it in other countries.
The ruling came a day after India said it was seeking damages of nearly $100m from Nestle India for "unfair trade practices" in relation to the noodles, one of the country's most popular convenience foods.
In April, laboratory tests ordered by some state governments found the noodles contained far higher levels of lead than legally allowed. The tests also detected the flavour enhancer chemical monosodium glutamate, or MSG, which is not mentioned in the product's list of ingredients.
In a statement on Wednesday, Nestle said the company has "a stringent programme" to test the ingredients in its noodles.
"In recent months, we had over 2,700 samples of MAGGI Noodles tested by several accredited laboratories both in India and abroad. Each one of these tests have shown lead to be far below the permissible limits," the statement said.
Maggi noodles are a hugely popular snack and Nestle's "two-minute" advertising campaign stressing the ease of preparing the food have made it a household name in India.
The noodles were Nestle's fastest-selling food item in India, accounting for about 15 billion rupees ($240m) in sales annually.
Source: Al Jazeera
