2015 (12) TMI 991 - HC - Indian Laws

Contravention of Rule 6 of the Packaged Commodities Rules - compoundable on payment of compounding fees of ₹ 25,000/- as prescribed under the Packaged Commodities Rules made by the Central Government or on payment of ₹ 2,500/- as prescribed under the State Rules? - Held that - It is no doubt true that Schedule XI of the Delhi Legal Metrology (Regulation) Rules, 2011 includes the offence of non-compliance of declaration in respect of pre-packaged commodity by manufacturer or dealer under Section 18(1) of the Act. However, in the absence of any provision in the said Rules providing for such declaration on pre-packaged commodity and non-compliance thereof, the said Rules cannot be made applicable for compounding the offences of contravention of Packaged Commodities Rules, particularly after insertion of a specific provision for compounding under Rule 32(3) of the Packaged Commodities Rules. Apparently, sub-section (3) Section 52 of the Act provides for fine but not the compounding fees, whereas the impugned Rule 32(3) of the Packaged Commodities Rules provides for compounding amount. In fact, the upper limit of the compounding fees has been provided by Section 48 of the Act itself inasmuch as the proviso states that the compounding amount shall not in any case exceed the maximum amount of the fine which may be imposed under the Act for the offence so compounded. Under Section 36 of the Act, the fine prescribed for the first offence is ₹ 25,000/-, for the second offence ₹ 50,000/- and for the subsequent offence not less than ₹ 50,000/- which may extend to ₹ 1,00,000/- or with imprisonment for a term which may extend to one year or with both. The compounding fees prescribed as ₹ 25,000/- under Rule 32(3) of the Packaged Commodities Rules is thus in conformity with the Act. Thus, Rule 32(3) of the Packaged Commodities Rules is not in conflict with the parent Act. The conflict, as being contented by the petitioner, is purely imaginary and non-existent and appears to be result of misreading of the provisions. For the aforesaid reasons, the writ petition is devoid of any merit and the same is accordingly dismissed.

Issues Involved:
1. Validity of sub-rule 3 of Rule 32 of the Legal Metrology (Packaged Commodities) Rules, 2011.
2. Applicability of Central Government Rules versus State Government Rules for compounding offences.
3. Determination of appropriate compounding fee under the Legal Metrology Act, 2009.

Issue-wise Detailed Analysis:

1. Validity of sub-rule 3 of Rule 32 of the Legal Metrology (Packaged Commodities) Rules, 2011:
The petitioner challenged the validity of sub-rule 3 of Rule 32 of the Legal Metrology (Packaged Commodities) Rules, 2011, asserting it was inconsistent with the Legal Metrology Act, 2009 and ultra vires the Act. The Court examined the statutory framework, noting that Section 48 of the Act allows for compounding of offences on payment of a prescribed sum. The Court clarified that the compounding amount under Rule 32(3) is not a fine but a fee, and its upper limit is governed by Section 48, which states it should not exceed the maximum fine for the offence. Since the fine under Section 36(1) of the Act could extend to Rs. 25,000 for the first offence, the compounding fee of Rs. 25,000 prescribed under Rule 32(3) was held to be in conformity with the Act. Thus, the Court found no conflict between Rule 32(3) and the Act, dismissing the contention that the rule was ultra vires.

2. Applicability of Central Government Rules versus State Government Rules for compounding offences:
The petitioner argued that the compounding fees prescribed under the Central Government's Packaged Commodities Rules should apply only to inter-State trade, while the State Rules should govern intra-State trade. The Court, however, noted that the Packaged Commodities Rules, made under the authority of Section 52 of the Act, apply to all pre-packaged commodities, irrespective of the nature of trade (inter-State or intra-State). The Court highlighted that both the Central and State Governments have the power to make rules under Sections 52 and 53 of the Act, respectively. However, in this case, the offence related to the Central Government's Packaged Commodities Rules, and thus, the compounding fee prescribed therein was applicable. The Court found that the respondents were justified in applying Rule 32(3) of the Packaged Commodities Rules for fixing the compounding fees.

3. Determination of appropriate compounding fee under the Legal Metrology Act, 2009:
The petitioner contended that the compounding fee should be Rs. 2,500 as per the Delhi Legal Metrology (Enforcement) Rules, 2011, rather than Rs. 25,000 as per the Central Government's Packaged Commodities Rules. The Court examined the relevant provisions and found that the alleged offence was a contravention of Rule 6 of the Packaged Commodities Rules, punishable under Section 36(1) of the Act. Since the Central Government's Rules specifically provided for a compounding fee of Rs. 25,000 for such offences, and considering that the Packaged Commodities Rules dealt comprehensively with declarations on pre-packaged commodities, the Court held that the compounding fee of Rs. 25,000 was appropriate and in accordance with the law. The Court dismissed the petitioner's argument and upheld the compounding fee as prescribed under the Central Government's Rules.

Conclusion:
The Court concluded that the compounding fee of Rs. 25,000, as prescribed under Rule 32(3) of the Legal Metrology (Packaged Commodities) Rules, 2011, was valid and applicable. The petition challenging the validity of the rule and seeking a lower compounding fee under the State Rules was dismissed. The Court found no merit in the petitioner's contentions and upheld the application of the Central Government's Rules in this case.

← Previous Next →