The Supreme Court on Tuesday held that hotels and restaurants can charge to their customers/guests more than the maximum retail price (MRP) marked on a bottle of the mineral water. While holding that hotels and restaurants are not bound by MRP in selling mineral water packaged and bottled by third parties, a Bench led by justice Rohinton Nariman rejected the Centre’s stand that selling bottled mineral water above the MRP will attract monetary penalty and jail term for the management of restaurants, hotels, etc. It said the customer does not go to a hotel or a restaurant just to purchase the bottled water but wants to enjoy the ambiance available there, so services are also involved. While the government had said that charging higher price was not only against the consumer interest but may also leads to tax evasion, the Federation of Hotel and Restaurant Associations of India had argued that charging prices for mineral water in excess of MRP during the service does neither violate the provisions of the Standards of Weights and Measures Act/the Packaged Commodities Rules nor the new law. “There is an element of service, so MRP can’t apply,” the Association had said, adding that irreparable harm and injury will be caused to its members if the Centre is permitted to commence proceedings under the Legal Metrology Act 2009.
The apex court had earlier in October 2015 sought the government’s response on an appeal filed by the Association seeking setting aside of the division bench of the Delhi HC’s February 2015 order that upheld Centre’s authority to initiate prosecution against restaurants and hotels for selling bottled mineral water above MRP under the 2009 Act.
The HC bench while disposing of the appeals filed by the government had kept the question of law, which was decided by its single judge, open for adjudication in any fresh proceedings under the new law. It had also held that the single judge’s March 2007 order “shall not be a precedent” in any case even if the concerned provisions of the old (repealed law) and the new law were identical.
The HC bench’s order had nullified the binding effect of justice Vikramjit Sen’s 2007 order that ruled that hotels and restaurants in the Capital can sell bottled mineral water over and above the MRP to customers who visit them and enjoy their other services facilities. Sen had observed that “the customer does not enter a hotel or a restaurant to make a simple purchase of the bottled water. It may well be that a client will order nothing beyond a bottle of water or a beverage, but his direct purpose in doing so would clearly be to enjoy the ambience available therein and to ordering of any article for consumption”.