The court observed, “It is not a case of simple sale. Nobody goes to hotel to buy or take away a bottle of mineral water.”
If you argue with restaurant, hotel owners over why they sell packaged drinking water above maximum retail price (MRP), you will likely lose the dispute. The reason behind this is the Supreme Court’s ruling on Tuesday which states that bottled mineral water can be sold at a price above than maximum retail price (MRP) in restaurants and hotels. A bench led by Justice Rohinton F Nariman of the apex court held that provisions of Legal Metrology Act will not be applicable in selling bottled water in hotels and restaurants and therefore, no prosecution can be made against them for selling it above MRP. The court also noted that composite elements of sale and service are there in hotels and restaurants where consumers also enjoy ambience which is part of investment done by these commercial establishments. The court observed, “It is not a case of simple sale. Nobody goes to hotel to buy or take away a bottle of mineral water.”
This issue was earlier dealt by the Central government which told the apex court that selling bottled mineral water above MRP will call for monetary penalty and jail term for the management of restaurants, hotels, multiplexes etc, as it is against consumer’s interests. The Central government submitted its affidavit to the apex court in a response to a petition filed by the Federation of Hotel and Restaurant Associations of India (FHRAI). The Ministry of Consumer Affairs has maintained that overcharging for pre-packed or prepackaged products was an offence under the Legal Metrology Act. This was based on Section 36 of Legal Metrology Act which states “anyone caught selling, distributing or delivering any pre-packaged commodity that does not conform to the declarations on the package shall be punished with fine up to Rs 25,000 for the first offence. It can increase to Rs 50,000 for second offence and subsequent offences can attract a fine of up to Rs 1 lakh or imprisonment for one year or both.”
Earlier in August 2015, a division bench of the High Court had upheld the government’s authority to initiate prosecution against restaurants and hotels for selling bottled mineral water above MRP under the 2009 Act.The High Court had further clarified that the order by a single judge bench, which permitted overcharging on the ground that a customer visits a restaurant to essentially enjoy ambience and other facilities such as air conditioning, will not act as a precedent and will also not come in the way of cracking the whip for charging above MRP. The hotel body later moved a review petition against the High Court order but it was dismissed, prompting the FHRAI to move the top court.