Chandigarh

StateCommission

A/125/2019

Navneet Jindal - Complainant(s)

Versus

Akash Restaurants and Foods Private Limited - Opp.Party(s)

In Person

20 Dec 2019

ORDER

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Appeal No.	:	125 of 2019
Date of Institution	:	24.06.2019
Date of Decision	:	20.12.2019

Navneet Jindal S/o Sh. Ram Lal Jindal, R/o H.No.1195, Sector 42-B, Chandigarh.

……Appellant/Complainant

V e r s u s

1. Akash Restaurants and Foods Pvt. Ltd., FC-14, Shop No.302-304, Food Quest, 3rd Floor, Elante Mall, 178-A, Indl. Area, Phase-I, M.W. Area, Chandigarh – 160002, through its Manager/Authorized Agent/Managing Director.
2. CSJ Infrastructure Pvt. Ltd., Elante Mall, 178-178A, Indl. & Business Park, Phase-I, Chandigarh- 160002, through its Manager/Auth. Agent.
3. Ayaan Foods, Food Quest, 3^rd Floor, Elante Mall, 178-A, Indl. Area, Phase-I, M.W. Area, Chandigarh – 160002, through its Manager/Auth. Agent.
4. Kandhari Beverages Pvt. Ltd., Village Nabipur, District Fatehgarh Sahib, Punjab.
5. Coca-Cola India Pvt. Ltd., having Corporate Office at 16-17^th Floor, One Horizon Centre, Golf Course Road, Gurgaon Sector 43, Gurgaon-122002 through its Managing Director/Director.

....Respondents/Opposite parties

PRESENT:- Sh. Navneet Jindal, appellant in person.

Sh. V.K.Sachdeva & Ms. Poonam Verma, Advocates for respondent No.1.

Sh. Sanjeev Sharma, Advocate for respondent No.2.

Ms. Sweeta Saili, Advocate for respondent No.4.

Personal appearance of Sh. Ajay Kohli, Advocate for respondent No.5 exempted for today, as per order dated 10.12.2019.

Respondent No.3 already exparte vide order dated 24.10.2019.  

================================================================

Appeal No.	:	126 of 2019
Date of Institution	:	24.06.2019
Date of Decision	:	20.12.2019

Navneet Jindal S/o Sh. Ram Lal Jindal, R/o H.No.1195, Sector 42-B, Chandigarh.

……Appellant/Complainant

V e r s u s

1. Deluxe Dhaba FC-12, Shop No.302-304, Food Quest, 3^rd Floor, Elante Mall, 178-A, Indl. Area, Phase-I, M.W. Area, Chandigarh – 160002, through its Manager/Auth. Agent.
2. CSJ Infrastructure Pvt. Ltd., Elante Mall, 178-178A, Industrial  & Business Park, Phase-I, Chandigarh- 160002, through its Manager/Auth. Agent.
3. Ayaan Foods, Food Quest, 3^rd Floor, Elante Mall, 178-A, Indl. Area, Phase-I, M.W. Area, Chandigarh – 160002, through its Manager/Auth. Agent.
4. Kandhari Beverages Pvt. Ltd., Village Nabipur, District Fatehgarh Sahib, Punjab.
5. Coca-Cola India Pvt. Ltd., having Corporate Office at 16-17^th Floor, One Horizon Centre, Golf Course Road, Gurgaon Sector 43, Gurgaon-122002 through its Managing Director/Director.

....Respondents/Opposite parties

 

BEFORE:    JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   MRS. PADMA PANDEY, MEMBER

                   MR. RAJESH K. ARYA, MEMBER

                  

PRESENT:- Sh.Navneet Jindal, Appellant in person.

                   Sh.Sanjeev Sharma, Advocate for respondent no.2.

                   Ms.Sweeta Saili, Advocate for respondent no.4

                   Personal appearance of Sh.Ajay Kohli, Advocate for respondent no.5 exempted, as per order dated 10.12.2019.

                   Respondent no.1 exparte vide order dated 10.12.2019.

                   Respondent no.3 exparte vide order dated 24.10.2019.

                  

PER JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   By this order, we shall dispose of the above captioned twin appeals, as common question of law and facts have germinated therefrom and both have originated from common order dated 19.01.2018, passed by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (in short the District Forum) whereby the consumer complaints bearing no.673 of 2017 and 674 of 2017 filed by the appellant against the respondents/opposite parties were dismissed.

2.           Succinctly stated, CSJ Infrastructure Pvt. Ltd., commonly called as Elante Mall, Chandigarh, is the ownership of opposite party no.2. This mall is a shopping plaza and different kinds of businesses as well as commercial activities are being run therein by different shopkeepers; and food business is also being carried on its third floor- which consisted of various eateries- and this floor is called as ‘food court’. It is specifically stated that while entering the ‘food court’ the customers/consumers have to first get prepaid card from respondent no.2, which can be recharged as desired. The said eateries provided no menu-service for delivering the food to the customers, rather, they (customers) have to ‘self serve’ the food.
3.           It is the case of the appellant in consumer complaint no.674 of 2017 that, on 29.01.2017,  he alongwith his family members, for the purpose of shopping, had visited the premises (Elante mall) of respondent no.2. After shopping, they went to food court of respondent no.3 (Ayaan Foods, Food Quest) being run in the premises of respondent no.2 and purchased one soft drink bottle from respondent Akash Restaurant, against which it charged an amount of Rs.60/- (inclusive of taxes) vide bill Annexure C-2,  whereas, on the other hand, Maximum Retail Price (MRP) of the said soft drink bottle in the other outlets in the city was Rs.32/- only (inclusive of taxes).
4.           Similarly, in consumer complaint bearing no.673 of 2016, the appellant had purchased one bottle of water, against which it charged an amount of Rs.30/- (inclusive of taxes) vide bill Annexure C-2, whereas, on the other hand, Maximum Retail Price (MRP) of the said bottle of water in the other outlets in the city was Rs.20/- only (inclusive of taxes). By stating that the aforesaid act of the respondents amounts to deficiency in service and unfair trade practice, the present complaints have been filed by the appellant seeking refund of excess amount received by the opposite parties towards the soft drink and water bottles and also compensation for mental agony, harassment and litigation expenses.
5.           Both the complaints have been contested by respondents no.1, 3 to 5, on almost common grounds. It has been alleged, inter alia, by these respondents that there was no violation on their part in charging the price above the basic MRP, rather, the eateries run by the respondents is a restaurant therefore dual price has been printed on the bottles. According to them, the sale of soft drink and water bottles was made in the restaurant and not in the open market and the appellant had the choice, but he preferred to purchase the same from the respondents. Even it has been pleaded that the amendment to the Legal Metrology (Packaged Commodities) Rules, 2011 was made effective from 1.1.2018, whereas, the transactions in dispute relate to January 2017, as such, the respondents were at liberty to charge dual prices of the commodities. Strong reliance has been placed upon the law laid down by the Hon’ble Supreme Court in Federation of Hotel and Restaurants Association of India Vs. Union of India and Ors., Civil Appeal No.21790 of 2017, decided on 12.12.2017.
6.           However, respondent no.2 has pleaded in its reply that no service was ever provided by Elante mall, therefore, the appellant has no cause of action against respondent no.2, as such, the question of deficiency in service or unfair trade practice by respondent no.2 does not arise at all. It has been further pleaded that the respondent no.1 (Akash Restaurant) is a sub-tenant/lessee of respondent no.2, whereas, respondent no.3 (Ayaan Foods) is a tenant of respondent no.2. In this situation, Elante mall has no control and domain over remaining respondents. Thus, Elante mall is not liable for any acts, omissions and commissions of remaining respondents.  
7.           Respondent no.4 (Kandhari Beverages Pvt. Ltd.) has specifically pleaded in its reply that the requirement of making the declaration on bottles containing beverages and packed material is contained in the the Legal Metrology (Packaged Commodities) Rules, 2011, wherein, it has been added as under:-

1. The requirement of making the declaration and bottles containing beverages and packaged drinking water is set out in the Legal Metrology (Packaged Commodity) Rule, 2011 framed under the Legal Metrology Act, 2009. As per the PC Rules, every package is required to have a declaration of maximum retail sale price to ensure that the package is not sold in retail at a price higher that the maximum retail sale price declared thereon. The requirement under the PC Rules is to declare the MRP on every package. There is no requirement on different packages of identical product having the same weight/volume. It is also legislatively recognized and accepted that different packages even if they contain identical products in the same quantity. Reference may be had to Sec.4A of the Central Excise Act under which duty of excise is paid in respect of “carbonated beverages and Packaged drinking water” based on the maximum retail sale price declared on the package. Explanation 2 (c) of section 4 thereof itself contemplates that different MRPs may be declared on different packages of identical products. This Legislation recognition of such practice reinforces that declaring different MRPs in respect of supplies of identical goods to different parties, is permissible in law. What is specifically recognized legislatively and is permitted in law, can never be illegal.
2. There is different pricing of identical product at different outlet is for the reason that certain retailers has to incur additional expenses of diverse nature for selling their commodities from a particular outlet. The retailer require higher margins to make it commercially viable for them to deal with a commodity. The Retailer may not buy the product, if it does not give him a margin suitable to him. Such a practice of charging different prices for the same commodity is commonly observed in most commodities and the rationale for similar practice for packaged commodities would be no different. For instance, Electricity companies charge different rates for domestic consumers, industrial and commercial consumers for the same  electricity. LPG gas cylinders are priced according to the type of use; domestic and commercial. Even vegetable prices or prices of various other commodities, vary widely for the same quality form one shop to another. A cup of tea may cost the consumer many times more in a 5-Star Hotel as compared to a street tea stall. The rationale for declaring MRP is dependent upon the margins that a retailer may consider feasible, and MRPs may be declared keeping in view a variety of commercial factors based on which the seller/producer/manufacturer consider a suitable price to deal with the packaged product, for a given situation.
3. Different MRPs may be declared keeping in view various marketing and commercial aspects. At a particular outlet, the costs at the outlet to deal with a particular product may be higher than other outlets. This could be for a variety of reasons. The outlet may be in an expensive retail mall or it may be in a cinema theatre where the retailer may be incurring a much higher cost to maintain the outlet by way of higher lease rentals, air-conditioning costs, license fee for music being played, high municipal taxes, security of the premises and other operating and fixed overheads, where only limited buyers come for short intervals. The costs at such outlets cannot be compared to the costs of a ‘paan’ shop or a stall on the street. It cannot be expected that such an outlet in a cinema theatre would commercially deal with a particular product which does not give him sufficient margins to meet his business expectations and meet his expenses and expected profits for carrying on his business. Since there is no price control, such products may be sold at such outlets at such prices as are considered feasible. The MRP would therefore be printed for sales at such outlets which may be different from the MRP declared on other packages of similar goods for sale at other outlets.

Thus the only requirement in respect of packaged goods is that as per Rule 6 (1) (e) of the PC Rules, 2011, the MRP is required to be declared on each such package so that whichever MRP is declared on a package, that would be the maximum retail sale price at which that package may be sold to the ultimate consumer.”

 

8.           Thus, according to the respondents the bottles having higher MRP is specifically meant for high rated places where customer can sit, relax and enjoy the ambience and comfort of the place and products purchased from big bazaar and such outlets do not provide as such facilities. As such, prices of identical products are different of same quality and quantity products. According to them the dual prices are not per se illegal. Thus, it has been prayed that the complaints be dismissed.
9.           The contesting parties led evidence, in support of their cases before the District Forum. However, the District Forum on analysis of the pleadings; documents on record and arguments addressed by the contesting parties, dismissed both the consumer complaints, vide common order referred to above, by observing as under:-

 “Admittedly, per pleadings of the parties, and evidence led, it is not the case that OP-1 or say OPs had overcharged the amount of printed price of MRP of mineral water bottle. The printed price/MRP of the water bottle consumed by the complainant in the food works of OP-1 was Rs.30/- and Rs.30/- was charged. The complainant felt aggrieved that in other outlets MRP for the same bottle was Rs.20/-which amounts to dual pricing.  It is the case, the relevant Act had been repealed.  Even otherwise, its provision has not been highlighted in the pleadings or during the course of arguments which the OPs had contravened. Our attention was drawn to the amendment to Legal Metrology (Packaged Commodities) Rules, 2011 which had come into force from 1.1.2018. It aims to regulate pricing of pre-packaged commodities alongwith certain leveling requirement and also prohibits dual MRP.  While the present pertains to 29.1.2017 on which date the said rules were not operative and its operation was prospective and not retrospective so as to grip the noose of law on the acts of the OPs.

We have already referred, complainant had purchased a mineral water bottle in the restaurant of OP-1.  The printed price of Rs.30/- i.e. the MRP was charged from the complainant.  No law has been shown vide which the traders or manufacturers were under legal duty to fix the minimum or maximum price of the mineral water bottle or other article of food.  Perusal of the bill of the bottle (Annexure C-2) shows MRP of Rs.30/- (inclusive all taxes), but, it does not reflect the date, manufacture year, batch number etc. so as to equate it or match it with the purchased bottle (Annexure C-3) of the same brand where the MRP was mentioned as Rs.20/-.

The complainant himself opted to have the water bottle in the restaurant of OP-1 knowing fully well it would charge the printed price of Rs.30/- on the bottle of mineral water. As per facts averred, it is not a case of deficiency in service as there was no shortcoming or imperfection etc. in the product supplied, but, allegedly dual prices were charged at different places and in different outlets. Before the loose nuts are tightened it was for the complainant to bring the act of the OPs within the defined unfair trade practice which has been referred to under Section 2(o) of the Consumer Protection Act, 1986.  A meticulous perusal of the definition of “unfair trade practice”, which is exhaustive in itself, does not show that the act of OP-1 or say of the OPs is covered under the definition of unfair trade practice.”

10.           We have heard counsel for the contesting parties and carefully gone through the material available on the record.
11.           Learned counsel for the appellants contended with vehemence that the respondents are deficient in providing service and also adopted unfair trade practice, by printing dual MRP as well as by charging the price above the basic MRP of the aforesaid products sold in their premises because similar products were available in the open market having less or basic MRP; that the food business run in the Elante mall is neither a restaurant nor a hotel nor the competent authority under Food Safety and Standard Act, 2006 (in short the FSSA 2006) had issued any licence to run the food business; that the District Forum failed to appreciate the facts and law and wrongly dismissed the complaints on flimsy grounds. It has been strongly urged that both the appeals be accepted with exemplary costs.
12.           On the other hand, it has been contended by Counsel for the contesting respondents that the respondents did not adopt any unfair trade practice and were not deficient in providing service by charging MRP in respect of soft drink and water bottles, referred to above, in their premises irrespective of the fact that the same were available in the outlets in the city with less or basic MRP; that the eateries wherein the food business is run, be treated as a restaurant and the respondents are entitled to print dual prices on the bottles of soft drink and water respectively; and also to recover the price as printed on the bottles in question. Reliance has been placed upon the following judgments titled as Federation of Hotel and Restaurants Association of India (supra);  Pallavi Refractories Vs. Singareni Collieris Co. Ltd., (2005) 2 SCC 227: PVR Limited Vs. Union of India and Ors., W.P. (C) 4604/2017 decided by the Hon’ble Court of Delhi on 24.05.2017; Pepsico India Holdings Private Ltd. Vs. Union of India through Secretary and Ors., Writ Petition (L) No.685 of 2017 decided by the Hon’ble High Court of Judicature of Bombay on 20.03.2017; Federation of Hotel and Restaurants Association of India and Ors. Vs. Union of India and Ors., WP (C) Nos. 6517/03 and 14691-16927/05 decided on 05.03.2017; State of Punjab Vs. Associated Hotels of India Limited, AIR 1972 SC 1131; and Northern India Caterers (India) Limited Vs. Lt. Governor of Delhi (1978 AIR SC 1591).
13.            We have given our thoughtful consideration to the rival contentions and have gone through the record of each case. In our view, both the appeals deserves acceptance, basically, on the following reasons:-

1. The eateries/food business carried on within the premises of Elante mall can’t be termed as restaurant or a hotel;
2.  Those eateries having no licence under the provisions of FSSA 2006 and the Food Safety and Standards (Licensing and Registration of Food Businesses), Regulations, 2011.
3. There is no law authorizing the respondents to depict dual pricing and charging above the MRP on the products sold within the premises of Elante mall.

14.           First of all coming to the point with regard to running the food business without the licence issued by competent authority.
15.           Section 2 (n) of the FSSA 2006 defines the term ‘food business’ as any undertaking, whether for profit or not and whether public or private, carrying out any of the activities related to any stage of manufacture, processing, packaging, storage, transportation, distribution of food, import and includes food services, catering services, sale of food or food ingredients.
16.           Under the Food Safety and Standards (Licensing and Registration of Food Businesses), Regulations, 2011 (in short the Regulations), ‘Petty Food Manufacturer” has been defined as under:-

1. manufactures or sells any article of food himself or a petty retailer, hawker, itinerant vendor or temporary stall holder; or distributes foods including in any religious or social gathering except a caterer; or
2.  such other food businesses including small scale or cottage or such other industries relating to food business or tiny food businesses with an annual turnover not exceeding Rs 12 lakhs and/or whose –

1.           production capacity of food (other than milk and milk products and meat and meat products) does not exceed 100 kg/ltr per day or
2.           procurement or handling and collection of milk is up to 500 litres of milk per day or
3. slaughtering capacity is 2 large animals or 10 small animals or 50 poultry birds per day or less.”

 

Regulation 2.1 (Chapter 2) of the said Regulations provides that all the Food Business Operators in the country will be registered or licensed in accordance with the procedures laid down hereinafter;

“2.1.1 Registration of Petty Food Business

(1) Every petty Food Business Operators shall register themselves with the Registering Authority by submitting an application for registration in Form A under Schedule 2 of these Regulations along with a fee as provided in Schedule 3.

(2) The petty food manufacturer shall follow the basic hygiene and safety requirements provided in Part I of Schedule 4 of these Regulations and provide a self attested declaration of adherence to these requirements with the application in the format provided in Annexure-1 under Schedule 2.

(3) The Registering Authority shall consider the application and may either grant registration or reject it with reasons to be recorded in writing or issue notice for inspection, within 7 days of receipt of an application for registration.

(4) In the event of an inspection being ordered, the registration shall be granted by the Registering Authority after being satisfied with the safety, hygiene and sanitary conditions of the premises as contained in Part I of Schedule 4 within a period of 30 days.

If registration is not granted, or denied, or inspection not ordered within 7 days as provided in above sub regulation (3) or no decision is communicated within 30 days as provided in above sub regulation (4), the petty food manufacturer may start its business, provided that it will be incumbent on the Food Business Operator to comply with any improvement suggested by the Registering Authority even later.

PROVIDED that registration shall not be refused without giving the applicant an opportunity of being heard and for reasons to be recorded in writing.

(5) The Registering Authority shall issue a registration certificate and a photo identity card, which shall be displayed at a prominent place at all times within the premises or vehicle or cart or any other place where the person carries on sale/manufacture of food in case of Petty Food Business.

(6) The Registering Authority or any officer or agency specifically authorized for this purpose shall carry out food safety inspection of the registered establishments at least once in a year.

PROVIDED that a producer of milk who is a registered member of a dairy Cooperative Society registered under Co-operative Societies Act and supplies or sells the entire milk to the Society shall be exempted from this provision for registration.

2.1.2 License for food business

(1) Subject to Regulation 2.1.1, no person shall commence any food business unless he possesses a valid license.

PROVIDED that any person or Food Business Operator carrying on food business on the date of notification of these Regulations, under a license, registration or permission, as the case may be, under the Acts or Orders mentioned in the Second Schedule of the Act shall get their existing license converted into the license/registration under these regulations within sixty months from the date of commencement of these regulations by making an application to the Licensing/Registering Authority after complying with the safety requirements mentioned in the Schedule 4 contained under different Parts dependent on nature of business. In case of difficulty, the licensing authority with the approval of the Food Safety Commissioner in the State will determine the advisability of applying any specific condition keeping in view the need to ensure safety of food and public interest. No license fee will have to be paid for the remaining period of the validity of the earlier license or registration granted under any of the said Acts or Orders.

Non-compliance with this provision by a Food Business Operator will attract penalty under section 55 of the Act.

PROVIDED FURTHER that any food business operator holding Registration/License under any other Act/Order as specified under schedule 2 of the FSS Act, 2006 with no specific validity or expiry date, and otherwise entitled to obtain a license under these regulations, shall have to apply and obtain a Registration/License under these Regulations within sixty months from the date of commencement of these regulations by paying the applicable fees.

PROVIDED ALSO that in case of difficulty, the licensing/registration authority with the approval of the Food Safety Commissioner in the State will determine the advisability of applying any specific condition keeping in view the need to ensure safety of and public interest. Non-compliance with above provisions by a food business operator shall attract penalty as provided under section 55 of the Act.

(2) Notwithstanding the provisions contained in Regulation 2.1.2(1) above or in any of the registration or license/certificates issued under existing Acts or Orders mentioned in the Second Schedule of the Act, the Licensing Authority, if it has reason to believe that the Food Business Operator has failed to comply with all or any of the conditions of the existing registration or license or the safety requirements given in Schedule 4, may give appropriate direction to the Food Business Operator to comply with.

(3) License for commencing or carrying on food business, which falls under Schedule 1, shall be granted by the Central Licensing Authority, provided that Food Authority may through notification make such changes or modify the list given in the Schedule I as considered necessary.

(4) License for commencing or carrying on food business, which are not covered under Schedule 1, shall be granted by the concerned State/UT’s Licensing Authority.

(5) The Food Business Operator shall ensure that all conditions of license as provided in Annexure 3 of Form B in Schedule 2 and safety, sanitary and hygienic requirements provided in the Schedule 4 contained under different Parts depending on nature of business are complied with at all times .

PROVIDED that the Licensing Authority shall ensure periodical food safety audit and inspection of the licensed establishments through its own or agencies authorized for this purpose by the FSSAI. PROVIDED further that no person shall manufacture, import, sell, stock, exhibit for distribution or sale any article of food which has been subjected to the treatment of irradiation, except under a license obtained from Department of Atomic Energy under the Atomic Energy (Control of Irradiation of Food) Regulations, 1996”.

 

17.           Section 31 of the FSSA, 2006 creates an embargo to run food business except under a licence from the Designated Officer. Sub-section (1) thereof says that “No person shall commence or carry on any food business except under a licence.”

                   Sub-section (3) thereof provides that any person desirous to commence or carry on any food business shall make an application for grant of a licence to the Designated Officer in such manner containing such particulars and fees as may be specified by regulations..

18.           Thus, under the FSSA 2006, as well as the Regulations, it is mandatory to obtain licence for running a food business or petty food business/eateries. In other words, no food eatery/food business nor a hotel nor a restaurant can be run without a licence obtained from the competent authority. 
19.           Admittedly, the Elante mall is a shopping complex. During the course of arguments, learned counsel for respondent no.1 admitted that no licence has been issued to any of the respondents to run food business within the premises of Elante mall. Even no such licence has been produced on the record by any of the respondents to establish that the premises of Elante mall can be used to run a food business. Inspite of that, the respondents are running the business of food eateries within the Elante mall.
20.            Section 63 of the FSSA 2006 provides punishment for carrying out a business without licence. This section reads as under:-

“If any person or food business operator (except the persons exempted from licensing under sub-section (2) of section 31 of this Act), himself or by any person on his behalf who is required to obtain licence, manufacturers, sells, stores or distributes or imports any article of food without licence, shall be punishable with imprisonment for a term which may extend to six months and also with a fine which may extend to five lakh rupees”.

 

21.           No licence to obtain the food business has been placed on the record and even during the course of arguments, the respondents have not been able to show any licence, rather, they have admitted that they had not obtained such a licence. Thus, the food business is being run in an illegal and unauthorized manner. It amounts to undue enrichment through illegal and unauthorized means. Thus, the circumstances of the case require that the same be stopped with immediate effect.
22.           The judgments relied upon by the respondents are distinguishable on facts. In Federation of Hotel and Restaurant Association of India case (supra), the declaration was sought to the effect that the provisions of the Standards of Weights and Measures Act, 1976, the Standards of Weights and Measures (Enforcement) Act, 1985 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are not applicable to the services rendered in the premises of hotels/restaurants.

          The Hon’ble Supreme Court in State of Punjab Vs. Associated Hotels of India Limited (supra) has observed that during the stay in hotel, one has to enjoy number of amenities to be provided by the hotel. The hotel renders special services to their customers so that their stay is comfortable. It was observed in para nos.13 to 15 as under:-

“13.   Thus, in consider whether a transaction falls within the purview of sales tax it becomes necessary at the threshold to determine the nature of the contract involved in such a transaction for the purpose of ascertaining whether it constitutes a contract of sale or a contract of work or service. If it is of the latter kind it obviously would not attract the tax. From the decisions earlier cited it clearly emerges that such determination depends in each case upon its facts and circumstances. Mere passing of property in an article or commodity during the course of the performance of the transaction in question does not render it a transaction of sale. For, even in a contract purely of work or service, it is possible that articles may have to be used by the person executing the work and property in such articles or materials may pass to the other party. That would not necessarily ,convert the contract into one of sale of these materials. in ,every case the Court would have to find out what was the primary object of the transaction and the intention of the parties while entering into it. It may in some cases be that even while entering into a contract of work or even service, parties might enter into separate agreements, one of work and service and the other of sale and purchase of materials to be used in the course of executing the work or performing the service. But, then in such cases the transaction would not be one and indivisible, but would fall into two separate agreements, one of work or service and the other of sale.

14.     What precisely then is the nature of the transaction and the intention of the parties when- a hotelier receives a guest in his hotel ? Is there in that transaction an intention to sell him food contained in the meals served to him during his stay in the hotel ? It stands to reason that during such stay a well equipped hotel Would have to furnish a number of amenities to render the customer's stay comfortable. In the supply of such amenities do the hotelier and his customer enter into several contracts every time an amenity is furnished ? When a traveler, by plane or by steam-ship, purchases his passage-ticket, the transaction is one for his passage from one place to another. If, in the course of carrying out that transaction, the traveler is supplied with drinks or meals or cigarettes, no one would think that the transaction involves separate sales each time any of those things is supplied. The transaction is essentially one of carrying the passenger to his destination and if in performance of the contract of carriage something is supplied to him, such supply is only incidental to that services, not changing either the pattern or the nature of the contract. Similarly, when clothes are given for washing to a laundry, there is a transaction which essentially involves work or service, and if the laundery man stitches a button to a garment which has fallen off, there is no sale of the button or the thread. A number of such cases involving incidental uses of materials can be cited. none of which can be said to involve a sale as part of the main transaction.

15.     The transaction in question is essentially one and indivisible. namely, one of receiving a customer in the hotel to stay. Even if the transaction is to be disintegrated, there is no question of the supply of meals during such stay constituting a separate contract of sale. since no intention on the part of the parties to sell and purchase food stuff supplied during meal times can be realistically spelt out. No doubt, the customer, during his stay, consumes a number of food stuffs. It may be possible to say that the property in those food stuffs passes from the hotelier to the customer at least to the extent of the food stuffs consumed by him. Even if that be so, mere transfer of property, as aforesaid, is not conclusive and does not render the event of such supply and consumption a sale, since there is no intention to sell and purchase. The transaction essentially is one of service by the hotelier in the performance of which meals are served as part of and incidental to that service, such amenities being regarded as essential in all well conducted modem hotels. The bill prepared by the hotelier is one and indivisible, not being capable by approximation of being split up into one for residence and the other for meals. No doubt, such a bill would be prepared after consideration of the costs of meals, but that would be so for all the other amenities given to the customer. For example, when the customer uses a fan in the room allotted to him, there is surely no sale of electricity, nor a hire of the fan. Such amenities, including that of meals, are part and parcel of service which is in reality the transaction between the parties”.

23.           However, in the cases in hand, no service has been provided to the appellant by the respondents and none of the premises of the respondents can be termed as hotel or a restaurant.  Infact, the ‘food court’ in question has been set up for facilitating the customers of the shopping plaza, so that they may purchase eatables during the tenure of shopping.  Neither any waiter has been provided to the appellant nor were any other services provided to him. Rather, the customers have to self-serve them. In this view of the matter, the eateries run by the respondents cannot be equated with restaurants or hotels. Furthermore, there cannot be two MRPs, except in accordance with the law. By doing so, the respondents have made illegal enrichment by charging money beyond the MRP or by offering dual price of the goods, from the customers. Similar view was taken by the Hon’ble National Commission in Big Cinemas and anr. Vs. Manoj Kumar, Revision Petition No.2038 of 2015 decided on 01.02.2016.
24.           The facts in cases Pallavi Refractories, PVR Limited, Pepsico India Holdings Private Ltd. and Northern India Caterers (India) Limited (supra) are also distinguishable on facts.   
25.           In this view of the matter, this Commission is of the considered view that the services rendered by different eateries in the ‘food court’ within the premises of Elante mall cannot be equated with the services rendered in the hotels or restaurants and as such the respondents cannot charge more than the price of MRP as mentioned on the soft drinks and water bottles, by way of dual charging.
26.           This matter can be viewed from another angle- the angle showing the intention of legislature to enact the FSSA 2006 and the Legal Metrology (Packaged Commodities) Rules, 2011 (in short the Rules). These Rules came into effect on 01.04.2011. Its Rule 18 Sub-Rule (2) makes it very clear that no retail dealer or any other person including manufacturer, packer, importer and whole-sale dealer shall make any sale of any commodity in packed form at a price exceeding the retail sale price thereof. Under this Rule also, the respondents have no right to sell any commodity including the bottles in question on a price exceeding retail price (MRP) thereof. The legal term ‘retail sale price’ has been defined under Rule (2) (m) of the Rules, which says that retail price means the maximum price at which the commodity in packaged form may be sold to the consumers inclusive of all taxes.
27.           No rule authorizes the respondents to charge beyond the retail sale price under the garb of dual pricing. As discussed above, the eateries run in Elante mall are neither hotel nor restaurant therefore the respondents cannot derive benefit from the precedents referred above.

                   Otherwise, there is no other law authorizing the respondents to charge more than the basic price and also to print dual price on the bottles in question. Thus, the respondents were debarred under this Rule to receive the price exceeding retail price of the bottles in question.

28.           In the opinion of this Commission, the intention of the legislature from the very inception was to stop dual pricing and to create a restriction to charge the price of the goods beyond MRP. This intention  deeply clarified by the amendment made in the Rules vide [no.GSR 629 (E) dated 23.06.2017 w.e.f. 01.01.2018] vide which Rule (2-A) as under:-

“Unless otherwise specifically provided under any other law, no manufacturer or packer or importer shall declare different maximum retail prices on an identical pre-packaged commodity by adopting restrictive trade practices or unfair trade practices as defined under clause (nnn) or clause (r) of sub-section (1) of section 2 of the Consumer Protection Act, 1986 (68 of 1986). ”

 

29.           Under the amended Rule (ibid), no manufacturer or packer or importer shall declare different maximum retail prices on an identical pre-packaged commodity by adopting restrictive trade practices or unfair trade practices. Even prior to this amendment there was no law enabling any of the respondents for dual pricing, therefore, the words “unless otherwise specifically provided under any other law” are of no help to the respondents.

                   Although amended rule (2-A) (ibidim) has been referred before the District Forum but the same was not considered solely on the ground that it came into force much after the transactions in question took place and the same cannot be applied retrospectively. But, this Commission is of the considered opinion that enactment under the title ‘The Legal Metrology (Packaged Commodities) Rules, 2011’ are the social and beneficial legislation and also that there is no law authorizing the respondents to charge beyond MRP under the garb of dual pricing, therefore, this amended provision can be applied retrospectively. In Dahiben Widow of Ranchhodji  Vs. Vasanji Kevalbhai (Dead) AIR 1995 SC 226, the Hon’ble  Supreme Court of India has held that being concerned with a legislation beneficial, the courts are required to give a liberal interpretation and  any amendments made in any Act etc. would relate back to the Act as enacted and would also apply to a suit which was pending when the amendment had come into force.

30.           The respondents by charging excess amount, towards the products, referred to above, against each bottle, from the appellant, have adopted unfair trade practice and are also deficient in providing service. The District Forum failed to appreciate Rules 18 (2) and 18 (2-A) of Rules; Section 2 (n), Section 31 and Section 63 of the FSSA 2006; and the Regulations and also failed to take notice that the respondents were not equipped with licence issued by the competent authorities. The District Forum also failed to apply its mind that the food court/eateries, where no service is provided and the customers have to self-serve them cannot be considered as restaurants or hotels. Therefore, in this view of the matter, the order passed by the Forum is liable to be set aside and reversed.
31.           This Commission has observed that the respondents are in the unfair trade practice to charge the price of the eatables, especially, the soft drinks and water, beyond the MRP, under the garb of dual prices in an unauthorized manner and there is undue enrichment since long. Elante mall being the owner and lesser allowed its sub-lessees/tenants to continue these unfair trade practices and deficiencies in service, therefore, the circumstances require that they be burden with exemplary costs. 
32.           In view of above, both the appeals filed by the appellant are partly accepted with costs and the impugned order is set aside and reversed, with following directions:-
    1. The respondents, in each case, are directed to refund the excess amount received from the appellant towards purchase of the said bottles.
    2. The respondents are directed to pay lumpsum compensation in the sum of Rs.20,000/- in each case and cost of litigation to the tune of Rs.10,000/- in equal shares in each case to the appellants.
    3. The respondents are directed to deposit Rs.5 lacs in each case in the “Consumer Legal Aid Account” No.32892854721, maintained with the State Bank of India, Sector 7-C, Madhya Marg, Chandigarh in the name of Secretary of this Commission and also Rs.5 lacs in each case in the Poor Patient Welfare Fund (PPWF) of PGIMER (Post Graduate Institute of Medical Education & Research), Chandigarh, and submit the receipt thereof with this Commission.
    4. All the respondents shall immediately stop printing and publishing dual prices on the goods sold in the Elante mall; and further stop from charging dual prices from the customers with immediate effect.
    5. The Elante mall/respondent no.2 shall immediately stop the running of food business in its premises with immediate effect except after obtaining a licence from Designated Officer cum Authority, under FSSA 2006 and Regulations (ibid).
33.           This order shall be complied with by the respondents, in each case, within a period of 30 days from the date of receipt of its certified copy, failing which, the respondents shall be liable to pay penal interest @9% p.a. on the amounts, referred to above, in each case, from the date of passing of this order, till realization.
34.           Certified copy of this order be sent to the parties as well as Director, PGIMER (Post Graduate Institute of Medical Education & Research), Chandigarh. However, one copy of this order be sent to the Deputy Commissioner, Chandigarh, with a direction to ensure that no food business is being run without a licence under the provisions of Food Safety and Standards (Licensing and Registration of Food Businesses), Regulations, 2011 and in case it is found that there is violation of the FSSA 2006 and Regulations appropriate action be taken under intimation to this Commission.
35.           The appeal files be consigned to Record Room, after completion.

Pronounced.

20.12.2019

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

Sd/-

 (PADMA PANDEY)

          MEMBER

 

Sd/-

 (RAJESH K. ARYA)

MEMBER

Rg