IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT

IN THE HIGHCOURTOF KERALAAT ERNAKULAM
PRESENT:
B.P.RAY
MR.JUSTICE
THE HONOURABLE
t
MONDAY.
THE3RDDAYOF.iUNE2OI3/'I3THJYAISHTAI935
of 1999(E)
OP.No.5503
PETTTTONER(S):
TAJKERALAHOTELSAND RESORTSLTD.,
TAJRESIDENCYMARINEORtVE,
COCHIN.lI,
ERNAKULAM.
BY ITSDIRECTOR,
REPRESENTED
MR.N.UMASANKAR.
BYADV.SRI.E.K.NANDAKUMAFi
RESPONDENT(S)l
1 . UNIONOF INDIA,
BY ITSSECRqTARY'
REPRESENTED
MINISTRY
OF FOODANDCIViI,SUPPLIES,
(DEPARTMENT
OF CIVILSUPILIES),
KRISHIBHAVAN,NEWDELHI'\10 OO1.
OJ:
OF STANDARDS
DIRECTOR
WEIGHTSAND MEASURES,
OF FOODANDCIV]LSUPPLIES),
{MINISTRY
GOVERNMENT
OF INDIA,12./'
NEWDEI'.iiJIIO
OOI.
HOUSE,
JAMNAGAR
OF LEGALMEl:TOLOGY
CONTROLLER
THIRUVANANTHAPURAM.
\
SENIORINSPECTOR,
LEGALMETROLOGY
KAKKANAD,ERNAKULAM.
R1 & R2 BYADV SRI.T.SANJAY{}GC
R3 & R4 BY GOVT.PLEADER M]I,THOMASJOHN AMBOOKEN.
THIS oRIGINAL PETITION HA14){GBEEN FINALLY HEARD
DELIVEREDTHE
oN 05/03/2012,
THE COURTOfr C3-06-2013
FOLLOWING:
rs.
'
B.P,MY,J
of 1999
O.P.No.5503
Dated3d June,2013
JUDGMENT
Heard learned-counselfor the petitioner' The
prayerin the writ petitionis as follows.
"a) for an order and declarationof this
Hon'ble court that the provisions of
Standards and Weights and Measures
1976 and the Standardsof Weightsand
Measures (Packaged Commodities)
Rules, Lg77 and the Standards of
Weights and Meiisures (Enforcement)
Act, 1985do not applyto the petitioner;
b) for an order and declarationof this
Hon'ble Court that Section 33 of the
Standardsand Weights and Measures
(Enfo/cement)Act, 1985 is ultra vires
of India and is void and
ihe Cpnstitution
liabls'tobe struckdown;
c) for a writ of certiorari,or a writ in the
nature of certiOrari,or any other
appropriatewrit, order or direction of
this Hon'bleCourtcallingfor the records
of the caseand after perusingthe same,
to quash and s:et aside all actions
initiatedagainstthe petitionerincluding
Ext.P4issuedby the 4threspondent.
d) for a writ of mandamus,or a writ in
the natureof mandamus,or any other
appropriatewrit, order or directionof
this Hon'ble Court restraining the
respondents by themselves, their
.officers, servantsi and agents, from
againstthe
takingany actionwhatsoever
petitioner'shotels;pursuant to or in
o.p.5503/1999
of
of any of the provisions
implementation
the Standardsand Weightsand Measures
of WeightsaDd. ..:,.1
Act, L976,the Standards
Rule9,-. .
Commodities)
Measures(Packaged
!977, and the Standardsof Weightsandi:f.'.
Measures (Enforcement) Act, 1985
includingby launchingand/or initiating
any legal proceedings,civil or criminal
whatsoeveragainstthe petitioner'shotels
or the Directorsor emPloYees.
e) that pendingthe hearing and final
disposalof the petitioner,the responclents
be restrainedby an order and injunction
of this Hon'ble ccurt from taking any
action whatsoeveragainst the petitioner,
in
or
hotels pursuant to
its
of
of any of the provisions
implementation
the Standardsand Weightsand Measures
Act, 1976, the Standardsof Weightsand
Measures(PackagedCommodities)Rules,
1977 and the Standardsof Weights'and
Measures (Enforcement) Act, l9B5
including by way of launchingafld/or
ciVil or
initiatingany legal proceedings,
criminal, whatsoever against ' the
petitioner, its hoiels or the Directors,
officersor employees".
2.
The short questionthat arisesfor consideration
in this writ petitionis whetherthe star Hotelsrun by the
petitionercan chargea pricein excessof the maximum
retail price (MRP)from tlreir customers.The petitioner
which is a joint venture company between the
o.p.5503/1999
Government
of Keralaandthe TataGrouprunsa ahain-of
'|:'
five star hotelsin the Stateof Kerala. The 4threspondent
..'.''
Legal MetrologyInspector had inspected Hotel' Taj
Residency
on 4.1.1999and seized24 bottlesof pepsicoa
videExt.P5seizurememoalleging
violation
of the (herein
after referredto as the Act) and the standardof Weights
and
Measures(Package
ities)Rules,
Commod
L977
(hereinafterreferredto as the Rules), The specific
allegationagainst the petitionerwas that PepsiCola which
had a maximum retail price of Rs.8/- was being sold for
Rs.35/-thereby violatingthe provisionscontainedin the
Act and the Rules.
3. Section39 of the Act and Rules4 and 6 dealwith
the declarationto be affixedon packagecommodities.
Rule 2(i) definespre-packedcommodityand Rule 2(r)
defines retail sale price and refers to maximum retail
priceto be printedon the packages.
4. It is th€ specificcontentionof the petitionerthat
the Act and the Rulescan haveno application
to the Hotel
industry.The petitionersubmitsthat what is beingsoldis
o.p.5503/1999
4
' ';'',. .
not only a productbut also an experience
rnl
includingr
thej
e l'
'r
luxury ambience of the hotel, exclusive service' an<i
:'
variousotherfacilitiesand amenitiesfor whichan arhount
,.
in excessof the maximum retail price is collectedfrom
the customer. The petitioneris fortifiedin this regardby
a judgment of the Delhi High Court in The Federationof
Hotelsand Restaurantsof Associationof India and others
V. Unionof India and others reportedin AIR 2007(Delhi)
137. It was a case in which chargingpricesfor mineral
water in excessof MRp printedon the packagingduring
the service of customersin Hotelsand Restauranrswas
found to be not violativeof any of the provisionsof the
Standardsof Weightsand MeasuresAct, 1976. After
referringto a ConstitutionBenchof the SupremeCourt in
State of HP V. Associated Hotels of India (AIR 1972
SC 1131) and Northern India Caterers fndia Ltd V,
Lt.Governorof Delhi (AIR 1978SC 1591)as well as the
Constitution
Benchof the SupremeCourtin K.Damodara
Samy Naidu and Bros. V. State of T.N (2000) 1 SCC
521), the court held that there is no violationof the
o.p.5503/1999
provisionsof the Act or the Rulesin charging
a price In i.
excess of the MRp for mineral water. The
submitsthat the same reasoningis applicable
to
and circumstances
of the presentcase.
5. In State of Hp Vs. Associated Hotels
in fndia
(AIR 1972 SC 1131) it was held by
the ConstitutionEench
that " the transactionbetweena Hotelier
and visitor to
his hotel is one essentiallyof service,,.In
NorthernIndia
CaterersIndia Ltd V. Lt.Governorof Delhi (AIR
1978 SC
1591)it was held that the supplyof food
and drink to the
customersin a hotel or a restaurantdid
not partakethe
cnaracterof sale of goods and the true
essenceof the
transactionis a service.
6. Anothercontentionraisedby the petitioner
is that
tne Act and the Ruleswouldapplyonly
if the gooosare
soldas packaged
commodites.The goodslike
soft drinks
are providedby the petitionernot in
the packagedform
but after openingthe same.It is only
when gooosare
sold in a packagedform that the packaged
commodity
ruresare applicableto the same.
Again the botflesare
,l
o.p.5503/1999
6
openedand contentspouredby specially
trainea Oeqreri.
into crystal glassesand given to customers
ufong *iii.,
exclusive cuflery after seating them
on expensive
upholsteredchaiis in air-conditionedluxury
rooms and
restaurants.The price chargedby the petitioner
includes
the cost of all the aforesaidamenities
and not only the
price of ordinary soft drink.
Further Rules 4 and 6
themselvesmakes it clear that they
are applicableto
cases in which pre packed commodities
are, or are
intendedto be sold, distributed,
deliveredor otherwise
transferred by weight, measure
or number. The
petitioner'sHotelsare not sellingproducts
by this criteria
to attract the provisions of the
Act and Rules. For
exampte,nobodywalks into a Five
Star Hotel to DUy
homeone botHeof pepsi,one litre
of milk or one packet
of cigarettes while he may
consume the aforesaid
productsas part of a visit
ta the hoteras part of his notel
experience.
7. Learnedcounselfor the respondents,
relyingon
the DivisionBench decision
of this court reported in
Y./
l
o.p.5503/1999
Union of fndia V. Godrej G E Applicances
Ltd,
(3) KLT 694) argued that since the
validity of the rules
have beenupheldby this court, no interference
iscalled,r,
for. It is further submltted that
the Rule does not
categorise any type of business
organisactionin
compliancewith the provisionsof
the Rules. Whoever
engagedin the sale of commodities,
that is from the
street vendorto Star Hotelare liable
underthe provisions
of the Rules. The standardof Weights
and Measures(pC)
Rules1977 has beenissuedby the
CentralGovernmentin
exerciseof the powersunder,Section
93 of the Standards
of Weightsand Measureseci l9ZA.
This rule is issuedto
regulatethe transactionof the
commodityin packaged
form intendedto be sold or
distributedin the courseof
inter-statetrade or commerce
as requiredby the Section
39 of the Standardsof Weights
and MeasuresAct, 1976.
By virtue of the Section33
of the Standardsof Weights
and Measures(Enforcement)Act,
19g5 this rure is arso
made applicableto inter_state
trade or commerce,The
rule prescribesthe detailedprocedure
as regard ro the
\a/
o.p.5503/1999
suchas the name' '
declarations
making
packing,
of
manner
'"
generic
the commonor
manufacturer'
the
of
address
and
nameofthecommqdity'thenetquantityinterms'or
standardunitofweightormeasure'monthandyearo
packageand so on'
packing,the retail sale priceof the
violationsof the Act
for
penalities
prescribes
The rulealso
or Rules.
and I am
L I have consideredthe rival contentions
pricesfor soft drinks
charging
tnat
view
of the considered
packaging'during the
the
on
printed
MRP
of
in excess
restaurantsdoes not
and
notels
in
customers
of
service
Swf, nct as this does
violateany of the provisionsof the
thes€ commoditiesby
not constitutea sale or transferof
its customers'The
to
restaurateur
or
hotelier
the
restaurantto makea
customerdoesnot enter a hotelor a
It may well be
simplepurchaseof these commodities'
a bottle of
that a client would order nothing beyond
purposein doing so
water or a beverage,but his direct
available
would clearlytravel to enjoyingthe ambience
of any articlefor
therein and incidentallyto the ordering
o.p.5503/1999
consumption,
Althoughthe validityof the Rulehavebeen
challenged,I do not find any necessityto answerthe
challengein view of the DivisionBench decisionof,this
court cited supra. Therefore,the impugnednoticesare
quashed. Originalpetitionis disposedof with the
aforesaid'
directions.
Nocosts.
s4tB.P.RAY,
JUDGE
lgk
OP.No.5603of 1999(E)
APPENDIX
PETITIONER'S
EXHIBtTS:.
EXT.P1
COPYOF TIIE INTERIMORDERPASSEDIN WRITPETITION
MISC.PETITIONNO.21865'1994
PASSEDBYTHE
ANDHRAPMDESHHIGHCOURT.
EXT.P2
COPYOF THE INTERIMORDERIN WRITPETITIONMISC.
PETITIONNO.2I866/1994
PASSEDBY THE HIGHCOURT
OFANDHRAPRADESH.
ExT,P3
COPYOF THE INTERIMORDERIN WRITPETITIONLODGING
NO.II95/1994PASSEDBY?HE BOMBAYHIGHCOURT.
EXT.P4
COPYOF THE INTERIMPTfiSEDIN C.M.P.2579I/1994
IN
OP.NO.14701/1994
PASSEDBY THEBOMBAYHIGHCOURT.
EXT.P5
COPYOF THE RECEIPTDATEDO4/OIlI999TSSUED
BY THE
4TH RESPONDENT.
EXT.P6
COPYOF THE LAWYERNOTICEDATED06/01/i999ISSUED
TO THE PETITIONER.
EXT.P7
COPYOF THE REPLYNOTICEDATED2ZO111999
TSSUED
TO
SRI.T.DEVADAS,
ADVOCATE.
RESPONDENT'S
EXHtBITS:-
NIL,
//TRUECOPY//
P.S.TO JUDGE.