Hotels and restaurants permitted to sell bottled water and other packaged products at prices above the maximum retail price by the Supreme Court. The apex court said that restaurants also render a service and cannot be governed by the Legal Metrology Act.
According to a judgement passed on Tuesday the court said that when hotels and restaurants sell food and drinks, they also render a service. That makes it a transaction and billing composite. On account of the petition filed by the Federation of Hotel and Restaurant Associations of India (FHRAI) against the union of India, the court passed a judgement that MRP rates can’t stand firm upon for such entities.
A lawyer who was present at the hearing said, “The court in its judgement said there are a whole lot of other services that go with being served in hotels and restaurants and prosecution under the Legal Metrology Act for alleged breach of MRP prices cannot be launched.”
A writ petition was filed in the Delhi High Court by the FHRAI to challenge the notices issued to them. A single-judge bench of the court held in March 2007 stated that charging the customers in excess of the MRP on bottles of mineral water in hotels and restaurants does not violate any provision of Standards of Weights and Measures Act.
Standards of Weights and Measures Act was repealed by the Legal Metrology Act in 2010 after the government filed an appeal in the division bench of the court. Later, the court disposed of the matter and said the parties could inspect if the new act was being executed in the wrong manner.
The Supreme Court’s judgement on Tuesday was based on the special leave petition that was filed by the FHRAI. It argued that the definition of sale in both the new and old acts was the same.
Garish Oberoi, President of the FHRAI said, “We had moved the Supreme Court and had said that nobody comes to hotels just for bottled water or a cold drink – there are other costs involved. So, we cannot sell at the printed price. There is a service that is rendered. Our stand has been accepted by the court and the act doesn’t cover us and we are not bound to sell our items on MRP.”
After the act changed, the earlier stay on the MRP issue terminated.
Garish Oberoi also added, “In between there was no stay on MRP, which meant hotels and restaurants were bound to sell bottled water, aerated drinks and items like those offered in the mini-bar at MRP rates.”
The judgement of the Supreme Court is surprising as people will have to pay much more for purchasing clean water.
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