Reserved

Before State Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow.

F. Appeal no. 2201 of 2013

ITC limited, Hotels Division,

C/o Sheraton Rajputana Hotel,

Palace Road, Jaipur-302006                                …Appellant.  

Versus

K.C. Khanna S/o Shri S.L. Khanna,

R/o Moh., Ghuran Talaiya City &

District, Shahjahanpur, Uttar Pradesh.             …Respondent.

Present:

Hon’ble Sri Vikas Saxena, Presiding Member.

Hon’ble Smt. Sudha Upadhyay, Member.

Sri Kapil Kher, Advocate for the appellant.

Sri V.R. Chaubey, Advocate for the respondent.

Date:  4.9.2023

JUDGMENT

Per Sri Vikas Saxena, Member: The instant appeal is preferred against the judgment dated 30. 07. 2012 of learned District Consumer Commission, Shahjahanpur, Uttar Pradesh in complaint case no.18 of 2012, K.C. Khanna versus Sheraton Rajputana Hotel, Jaipur. By the impugned judgment the learned District Commission allowed the complaint against the appellant.

That Respondent/Complainant filed the above mentioned complaint before the District Commission, Shahjahanpur with the allegations that he took dinner in one of the hotels of appellant i.e. at ‘Sheraton Rajputana hotel’ at Jaipur on date 16. 09. 2011. After the said dinner, the appellant issued a bill of Rs. 3,515.70/-, which was paid by the Complainant. Main allegation of the Complainant was that the appellant has charged Rs. 150/-for a water bottle which was having maximum retail price (MRP) of Rs.11/-. The respondent filed this complaint with prayers that Apparent should be directed to pay Rs. 139/-the excess money charged over MRP written on the water bottle, Rs.10000/-for business loss, Rs.50000/- for mental harassment, Rs.30000/-for physical discomfort, Rs. 2000/- for treatment charges and Rs.1100/- cost of the notice in total a compensation of Rs.92,239/- with an interest @ 24%.

Being aggrieved the appellants ITC limited on behalf of the opposite party Sheraton Rajputana Hotel Jaipur preferred this appeal and has prayed to set aside the impugned order. The grounds taken in the Appeal inter alia that the learned District Consumer Commission, Shahjahanpur does not have territorial jurisdiction to try and adjudicate the complaint because the complainant allegedly purchased the water bottle at Jaipur, therefore no cause of action arose within the jurisdiction of learned district forum Shahjahanpur. It is also contented by the appellants that the responded is not a consumer in terms of section 2(d) of the consumer protection act 1986, since there was no sale in the present transaction. Moreover, the appellants did not commit any deficiency in service as the appellants were competent and free to decide the price of products in their five star hotel. The impugned order pass by learned district commission is illegal, perverse, without merit and is liable to be set aside as it did not consider the evidence produced by the respondent. The respondent has failed to show that he had dinner in the hotel of the appellant. No documents has been produced to show that when had he booked the table and visited the said hotel and had dinner over there. He has not produced any bill for the dinner including the said purchase of the bottle. This has been settled by Hon’ble Supreme Court and various High-Courts that hotels and especially star hotels can charge a price higher than the MRP of a product being provided since the customer pays for an experience including luxury, ambience of the hotel, exclusive service and various other facilities and amenities and not just for a product and also because there is no retail sale of packaged commodities made by these hotels. If only bottle of water was being sold as a packaged commodity during a retail sale, the seller may be obliged not to charge higher than MRP as per “The Standard of Weight and measures act, 1976” and rules made there under, but in the present case the respondent has alleged that he had dinner and ordered for a bottle of mineral water from the menu itself. Many judgments of Honorable Supreme Court and various High-Courts have pronounced that a hotel or a restaurant provides composite service and ambience which would include supply of food and beverages but does not sell food and beverages in retail. The service in this case comprises of entire experience of being served at the restaurant situated in a luxury 5 star hotel and the service of bottle water to hotel's guest is nearly a Complainant of entire dining experience. It is prayed by the appellants that on the grounds mentioned above and the judgments of Honorable Supreme Court and various High Courts the improve order dated 30. 07. 2017 passed by learned District Commission shall be set aside and the complaint of the respondent should be dismissed with costs.

We have heard Mr. Kapil Kher, advocate for the appellant and Shri Veer Raghav Chaubey appeared on behalf of the respondent. Hearing the Counsels and on perusal of records, our findings are as follows:-

The core question in this appeal is that whether the charges taken by the appellant hotel, for the water bottle served at the time of dinner of the Complainant, which are over and above MRP of the bottle written on it, is illegal. Meaning thereby, the charges taken by the appellant for the bottle is in violation of any settled law or provisions of a statute. Though, neither the complainant nor the learned district Commission have specifically mentioned the law or statute in violation of which this charge has been taken by the appellant/hotel, yet it is worth mentioning here that overcharging of a commodity over MRP can be considered as violation of provisions of,  “The Legal Metrology Act, 2009”, Which superseded the old act “Standard of Weight and Measure Act, 1976”, and rules made there under “The Legal Metrology (Packaged Commodities) Rules, 2011”. Section 18 of The Legal Metrology Act, 2009”, provides:-

18. Provisions relating to wholesale dealer and retail dealers.-
(1) No wholesale dealer or retail dealer or importer shall sell, distribute, deliver, display or store for sale any commodity in the packaged form unless the package complies with in all respects, the provisions of the Act and these rules.

(2) No retail dealer or other person including manufacturer, packer, importer and wholesale dealer shall make any sale of any commodity in packed form at a price exceeding the retail sale price thereof.

......................................................................................................................................................................................................................................................

Rule 2(l), 2(m), defines “retail sale” and Rule 2 (m) of The Legal Metrology (Packaged Commodities) Rules, 2011 defines ‘retail price’ or MRP as under-

2. (l) “retail sale”, in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales shops agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer;

2. (m) “retail sale price” means the maximum price at which the commodity in packaged form may be sold to the consumer and the price shall be printed on the package in the manner given the form MRP Rs/.........incl., of all taxes after taking into account the fraction of less than fifty paisa to be rounded off to the preceding Rs. and fraction of above 50 paise and up to 95 paise to the rounded off to fifty paise;

Similarly, Rule 2 (b) and Rule 2(j) defines a ‘dealer’ and ‘retail dealer’ as under:-

2. (b) “dealer” in relation to any commodity in packaged form, means a person who, or a firm which, carries on directly or otherwise, the business of buying, selling, supplying or distributing any such commodity whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, and includes a commission agent who carries on such business on behalf of any principal, but does not include a manufacturer who manufactures any commodity which is sold or distributed in a packaged form except where such commodity is sold by such manufacturer to any other person other than a dealer

(j) “retail dealer” in relation to any commodity in packaged form means a dealer who directly sells such packages to the consumer and includes, in relation to such packages as are sold directly to the consumer, a wholesale dealer who makes such direct sale;

Section 23 (2) of the old act “Standard of Weight and Measure Act, 1976”,  similar to the present Section 18 (1) of Legal Metrology Act, 2009 are  similar on this point and   definitions   of dealer, retail dealer, retail sale and retail sale price are similar in  rule 2(d), 2(o), 2(q), 2(r) were similar in old SWM Rules  to new rules The Legal Metrology (Packaged Commodities) Rules, 2011 which are illustrated above. In various judgments Hon’ble Supreme Court, considering these provisions considered the supply of items in luxurious hotels and restaurants part of service provided by them and not a ‘sale’ in strict sense of term.

Hon’ble Supreme Court in case State of Himachal Pradesh versus Associated Hotel of India Limited reported in AIR 1972 Supreme Court page 1131 observed that a transaction entered into by a customer in a hotel for meals and articles can be characterized as ‘services’ and not ‘sale’ in strict sense. Honorable apex court gave as under: —

17. That transaction between an hotelier and a visitor to the hotel is this one essentially of service in the performance of which and a part of amenities incidental to that service, the hotel serves meal at stated hours. That revenue, therefore, was not entitled to split up the transaction into two parts, one of service and the other of sale of food stuffs and to split up also the bill charged by the hotelier lodging and charges for food stuffs served to him with a view to bring the latter under the act.

The honorable High Court of Delhi in case the Federation of Hotels and Restaurant Association of India and others versus Union of India and others reported in AIR 2007 Delhi page 137, placing Reliance upon various judgments of Honorable Supreme Court, categorically gave verdict -

16. In the above analysis I hold that charging price for mineral water in excess of MRP printed on packaging, during the service of customers in hotel and restaurants does not violet any provisions of SWM act as this does not constitute a sale or transfer of these commodities by the hotelier or restaurant to its customers. The customer does not enter a hotel or restaurant to make a simple purchase of these commodities. It may well be that a client would order nothing beyond bottle of water or beverage, but his direct purpose in doing so would clearly travel to enjoying the Ambience available there in and incidentally to the ordering of any article for consumption. Can there be any justifiable reason for the court or Commission to interdict the sale of bottle mineral water other than a certain price, and ignore the relatively exorbitant charge for cup of tea or coffee. The response to this rhetorical query cannot but be in negative.

In judgment Northern India caterers India Limited versus Lieutenant Governor of Delhi reported in 1997 volume 1 SCC page 557 The Hon’ble Supreme Court again observed-

“Like the hotel here, a restaurant provides many services, in addition to the supply of food. He provides furniture and furniture, linen, crockery and cutlery and, eating place of today they may and music and especially provided area for floor dancing, and in some cases a floor show.

................. The essence of it is not an agreement for the transfer of general property of food or drink place at the command of customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thirst.”

Finally we place Reliance on the judgment of Honorable Supreme Court of India passed in FEDERATION OF HOTEL AND RESTAURANT ASSOCIATIONS OF INDIA Appellant VERSUS UNION OF INDIA AND ORS., CIVIL APPEAL NO. 21790 OF 2017.  The Honorable Court, discussing objects and reasons of the Legal Metrology act 2009, gave opinion in the similar case and endorsed the view of honorable High Court of Delhi in the following manner: -    3) The appellant's main concern was that the Controller of Weights and Measures was seeking to proceed against the hotels and restaurants of the appellant-Association for charging a price higher than the printed Maximum Retail Price (“MRP” in short) for supply of packaged water bottles during services provided to their customers while in the hotels and restaurants. The appellants pleaded 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 as this does not constitute a sale or transfer of these commodities by the hotelier or Restaurateur to its customers. The customer does not enter a hotel or a restaurant to make a simple purchase of these commodities. It may well be that a client would order nothing beyond a bottle of water or a beverage, but his direct purpose in doing so would clearly travel to enjoying the ambience available therein and incidentally to the ordering of any article for consumption. Can there be any justifiable reason for the Court or Commission to interdict the sale of bottled mineral water other than at a certain price, and ignore the relatively exorbitant charge for a cup of tea or coffee. The response to this rhetorical query cannot but be in the negative.

In the finality The Honorable Supreme Court expressed its own view and given the verdict on the subject which is reproduced here under —

17) We are, therefore, of the view that neither the Standards of Weights and Measures Act, 1976 read with the enactment of 1985, or the Legal Metrology Act, 2009, would apply so as to interdict the sale of mineral water in hotels and restaurants at prices which are above the MRP.

Now,  following the above mentioned judgments of Honorable Supreme Court and hon’ble National Commission, we are of the considered opinion that the charges taken by ‘Sheraton Rajputana Hotel, Jaipur’, which is a hotel of well-known repute, for serving of water bottle (over and above MRP), is not a “sale” in strict sense, but it is cumulative charges taken by them including price of the bottle as well as quality-services extended there, ambience, Comforts and other luxuries provided by them, for enjoyment of which, the Complainant  visited there. The charge taken by the appellants for mineral water over and above MRP cannot be said to be a violation of The Legal Metrology act, 2009 or rules made thereunder or any deficiency in service in the hotel. The learned District Commission, Shahjahanpur, without considering the afore said view taken by Honorable Supreme Court and Honorable National Commission, New Delhi on the same subject, partially allowed the complaint and has directed the appellant to return Rs.117/- to the respondent and has awarded damages for Rs.5000/-towards mental and physical agony and Rs.1000/- towards the cost of litigation, which is not proper and legal in this case. Therefore, the impugned judgment is liable to set aside and this appeal is fit to be allowed.

ORDER

The Appeal is allowed and the impugned judgment dated 30. 07. 2012 of learned District Consumer Commission, Shahjahanpur, Uttar Pradesh in complaint case no.18 of 2012, KC Khanna versus Sheraton Rajputana Hotel, Jaipur is set aside. Thus the complaint is dismissed. Both the parties shall bear their own costs in the appeal.

Let copy of this order be made available to the parties as per rules.

The Stenographer is requested to upload this order on the website of this Commission today itself.     

          (Vikas Saxena)                      (Sudha Upadhyay) 

      Presiding Member                       Member

Date: 04-09-2023 

Jafri,

C-3