2020 (1) TMI 1574 - HC - Indian Laws

Retail package or not - allegation is that the address of the manufacturer or packer and MRP have not been marked on such packages as required under the Standards of Weights and Measures (Package Commodities) Rules 1977 - Whether the requirement of Rule 6 is to be complied with by a manufacturer who sells his packaged goods to an industrial consumer through a stockiest? - HELD THAT - As per Rule 6 of the Rules which prescribes the declaration to be made on every package makes it clear that one of the requirement which a package should contain is common generic names of the commodity contained in the package as contained in Rule 6(1)(b) - In rule 2-A industrial consumer or the institutional consumer are purchasing the packaged commodities directly from the manufacturer. In the case of retail package the manufacturer of goods meant for industrial use may not be able to supply the goods directly. Therefore they may take the assistance of a stockiest. If the customers are spread over the country and if the manufacturing unit is in one part of the country and they want to concentrate on manufacturing activity they may not have resource or ability to arrange for the sale of their product through out the country. In these circumstances it is quite but natural that they need middle men or stockiest as distributors through whom they would distribute their product or sell their products to an industrial or institutional user. In such an event that packaged commodity cannot be construed as a retail package - After deleting Rule 34(a) in the very definition of retail package the legislature while defining the meaning of ultimate consumer to whom a retail package is meant excluded institutional or industrial consumer. Thus it is clear that the protection under this Act is confined only to individuals and persons who are eking out livelihood by self employment and not to institutional and industrial consumers or consumers who purchase goods in large quantities. In the present case respondent No.1 is a manufacturer of industrial product. On the packet it is expressly stated that it is meant for industrial use. The product which is manufactured by them is high end industrial welding products such as electrodes brazing rods powders and fluxes. Respondent No.2 is their selling agent and selling these products through a network of stockiest spread all over India 90% of the sales are generated through the involvement of core team of sales/service engineers of respondent No.2 who are trained in specialized Eutectic Castolin Welding Process - The learned single Judge after considering the entire material on record has rightly held that the impugned notices issued by appellant No.2 are one without authority illegal and contrary to the express provision contained in the enactment cannot be sustained and rightly quashed the notices. Appeal dismissed.

Summary

Issues:
1. Compliance with Standards of Weights and Measures Act and Package Commodities Rules for industrial products.
2. Interpretation of the term "consumer" in the context of the Act and Rules.
3. Applicability of Rule 6 declaration requirements for packages sold to industrial consumers.
4. Exclusion of industrial consumers from the definition of "ultimate consumer" in retail packages.

Analysis:
1. The case involved a dispute where a joint venture company manufacturing specialized welding products for industrial use was challenged for not complying with the Standards of Weights and Measures Act and Package Commodities Rules. The company argued that these rules were not applicable to their products intended solely for industrial consumers due to the high cost and specialized nature of the products, which were not meant for conventional fabrication work.

2. The interpretation of the term "consumer" was crucial in determining the applicability of the rules. The court referred to various definitions from legal sources and concluded that a consumer typically refers to an individual purchasing goods for personal, family, or household use, excluding producers, manufacturers, or wholesale dealers. The Consumer Protection Act was also cited to highlight the exclusion of those obtaining goods for resale or commercial purposes from the definition of a consumer.

3. The court examined Rule 6 requirements for package declarations and considered whether a manufacturer selling packaged goods to industrial consumers through a stockiest was obligated to comply. It was argued that the products in question, being specialized industrial goods, did not fall under the purview of the rules governing retail packages meant for household consumers, as the packages were exclusively designed for industrial use.

4. The exclusion of industrial consumers from the definition of "ultimate consumer" in retail packages was a key point of contention. The court analyzed the rules and amendments related to industrial and institutional consumers purchasing directly from manufacturers, emphasizing that the protection under the Act was primarily intended for individuals and self-employed persons, not institutional or industrial consumers buying in bulk.

In conclusion, the court upheld the decision of the learned single Judge, ruling that the notices issued to the company were unauthorized, illegal, and contrary to the provisions of the Act. The impugned notices were quashed, and the writ appeal was dismissed, finding no grounds for interference with the judgment.