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TMI Blog2018 (1) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... e ("MRP" in short) for supply of packaged water bottles during services provided to their customers while in the hotels and restaurants. The appellants plead in the Writ Petition that the transaction consisting predominantly of a service, and not of a sale of drinking water, consisted of a composite charge which included incidental charges for food, drinks etc. The challenge in the Writ Petition resulted in a judgment by the learned Single Judge dated 05.03.2007. The judgment of the learned Single Judge referred to and relied upon the decisions in The State of Punjab vs. M/s. Associated Hotels of India Ltd. (1972) 1 SCC 472, Northern India Caterers (India) Ltd. vs. Lt. Governor of Delhi, [1979] 1 SCR 557 and the review judgment in the latter case reported in (1980) 2 SCC 167. After discussing these judgments in detail, and considering the statement of objects and reasons of the Standards of Weights and Measures Act, the learned Single Judge finally held: "16. In the above analysis I hold that charging prices for mineral water in excess of MRP printed on the packaging, during the service of customers in hotels and restaurants does not violate any of the provisions of the SWM Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or violation of the old law in this respect, even if notices of such violation were issued, as in our opinion, considering the nature of offence, the long time which has elapsed and the doubt which has arisen whether such prosecution will be within the prescribed time, it is not deemed expedient that the state resources in this regard, which are already strained, be expended thereon." 5) A Review Petition was then filed against the aforesaid judgment which met with no success, in that the review was dismissed by an order dated 15.05.2015, in which it was pointed out that the practice of review being sought on a ground which is not supported by the original advocate but by a different advocate has been deprecated, and hence the review was dismissed. 6) Mr. K.V. Viswanathan, learned Senior Counsel, appearing on behalf of the appellant before us, has argued that both the original as well as the review order impact his clients in that the judgment of the learned Single Judge, which is a detailed and comprehensive judgment dealing with all the law points at hand has been brushed aside, and the result is that any de novo proceeding under the Legal Metrology Act, 2009, which has since r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the learned Single Judge can be said to be correct in law and applicable qua the 2009 Act. 8) A consideration of the statement of objects and reasons of the 1976 Act would show that the said Act is concerned with a provision for consumer protection by which the proper indication on the package of net quantity by weight etc. is contained therein and the price of the package is also indicated. Further, indication of date of manufacture and date of expiry would also be marked for appropriate products. The relevant portion of the said statement of objects and reasons is set out herein below: "5. The Bill further provides for consumer protection in respect of packaged commodities by providing, in pursuance of the recommendations of the OIML, for the proper indication on the package of net quantity by weight, measures or number, the identity of the commodity contained therein, name of the manufacturer, and what is very important, the price of the package. It is also proposed that commodities commonly used by people should be packed in rationalised standard quantities by weight, measure or number, so as to facilitate the purchase and comparison of price by the people. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtgage or hypothecation of, or a charge or pledge on, such weight, measure or other goods;" It will be clear on a cursory reading of the said definition that "sale" means transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration. It will be noticed that despite this Court's judgment in M/s. Associated Hotels of India Ltd. (supra), which is a judgment of the year 1972, Parliament has chosen to adopt the definition of sale which does not include or split up sales of goods from services in composite contracts. Also, a reading of the various penal provisions that are contained in the Act, starting with Section 50 would show that there is no penalty for selling above MRP in hotels and/or restaurants. 10) As has been stated in the trilogy of judgments in M/s. Associated Hotels of India Ltd. (supra) and the two Northern India Caterers (India) Ltd. (supra), it is clear that when "sale" of food and drinks takes place in hotels and restaurants, there is really one indivisible contract of service coupled incidentally with sale of food and drinks. Since it is not possible to divide the "service element", which is the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects and reasons for the 2009 Act reads as follows:- "STATEMENT OF OBJECTS AND REASONS In India, uniform standards of weights and measures based on the metric system, were established in the year 1956, which were revised in the year 1976 with a view to give effect to the international system of units. Apart from it, the Standards of Weights and Measures Act, 1976 provides for establishing Standards of Weights and Measures, regulation of inter-State trade or commerce in weights and measures and other goods which are sold by weight, measure or number. In the year 1985, the Standards of Weights and Measures (Enforcement) Act, 1985 was enacted for enforcement of standards of weights and measures established by or under the 1976 Act. 2. The advancement of technology has necessitated the review of above mentioned enactments to make them simple, eliminate obsolete regulations, ensure accountability and bring transparency. 3. It has become imperative to combine the provisions of the existing two Acts to get rid of anomalies and make the provisions simple. It has also become necessary to keep the regulation pragmatic to the extent required for protecting the interest of consumer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al prosecutions, does not bind the party in question. It is of utmost importance for all to know exactly how they stand in such cases. Also, Mr. Sinha's reliance upon Section 2(l) of the 2009 Act read with Rule 3 of the Rules does not take us very much further. Section 2(l) of the 2009 Act reads as follows:- "(l) "pre-packaged commodity" means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity;" 15) A cursory reading of the aforesaid definition would show that it refers only to the fact that a pre-packaged commodity should have a pre-determined quantity as stated in the definition section. It has no bearing whatsoever on the issue before us. Equally, reliance upon Rule 3 of the 2011 Rules again does not lead us anywhere. Rule 3 of the said Rules read as follows:- "3. Applicability of the Chapter.- The provisions of this Chapter shall not apply to,- (a) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up to 50 kg; and (b) packaged commodities meant for industrial co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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