UOI & Ors. v. National Restaurant Association

2. The question entailed in the writ petitions from which these appeals arise was whether it is impermissible for the members ofwrit petitioners i.e. Hotels and Restaurants to charge their customers / guests for the mineralwater packaged and bottled by third parties any price above the maximum retail price (MRP) mentioned thereon. The learned Single Judge held that chargingprice for mineral-water in excess ofMRPprinted onthe packaging, during the service ofcustomers inhotels and restaurants does not violate any provisions ofthe Standards ofWeights and Measures Act, 1976 (SWM Act) as the same does not constitute asale or transfer ofthose commodities by the hotelier of restaurateur to its customers. It was held that the customer does not enter ahotel or arestaurant to make a simple purchase of these LPA No.334/2007 page 2 of[8] ) commodities and even though the customer may order nothing beyond a bottle ofwater or a beverage but his direct purpose in doing so would clearly travel to enjoying the ambience available in the hotel or the restaurant and incidentally to the ordering of any article for consumption. ^ 3. Challenging the aforesaid finding, these appeals were filed. Though the appeals were accompanied with an application for interim relief but while admitting the appeals vide order dated 4^^ August, 2008, the applications for interim relief were dismissed observing that right from 20* January, 2004 there was an interim injunction in favour of the writ petitioners who had ultimately succeeded in the writ petition before the learned Single Judge and by way of interim reliefstatus quo ante the said ^ interim injunction could not be ordered.

4. During the pendency of the appeals the SWM Act in the light of provisions wherein the writ petitions were decided, was w.e.f. April, 2011 substituted with the Legal Metrology Act, 2009.

5. The appeals came up for hearing on 7* March, 2013 when the counsel for the appellant sought time to take instructions whether in the light of LPA No.334/2007 page 3 of[8] change in law the appeals were to be proceeded with further. Again when the appeals came up for hearing on 31'^ October, 2014, it was primafacie observed that in the light ofchange in law itwas not necessary to adjudicate the matter on merits. The learned ASG appearing for the appellant on that date sought time to get instructions as tothe action taken regarding the cases initiatedunder the repealedAct.

6. The appellant has filed an affidavit ofthe Director ofLegal Metrology of Department of Consumer Affairs, Government of India drawing attention to Section 57 of the Legal Metrology Act and contending that the violations under the erstwhile SWM Actcanthereunder be proceeded with further.

7. The matters were listed on 9'^ February, 2015 when learned ASG informed that no prosecutions all over India could be initiated for violation by hotels and restaurants of the provisions of SWM Act (and as per which according to the appellant hotels and restaurants even when supplying packaged mineral-water to their customers in the hotels / restaurants are required to only charge the MRP printed on the said packaged mineral-water bottle and no more) owing tothe interim injunction inthe writ petitions and contending that the said prosecutions would now be initiatedin the event of LPA No,334/2007 4of[8] succeeding in these appeals. A list, of notices issued was handed overand it was also pointed out that,queries were also raised in the Parliament as to why no action for suchviolations was beingundertaken,

8. We enquired the limitation for initiating such action. ^ ^ 9. We were informedthatthe limitation is ofsix months for first offence and there is no limitation for initiating prosecution for a second offence. The offences arehowever punishable with fine or imprisonment.

10. The counsel for the respondents points out that there was a provision for compounding ofthe offence under the SWM Act.

11. We have enquired whether not the said limitation would have expired in all the cases where notices are stated to have been issued. A 12. The learned ASG draws attention to Section 470 of the Code of Criminal Procedure, 1973 sub Section (2) whereof provides for exclusion of time during which the prosecution has been stayed by an injunction or order.

13. We have however enquired whether the same would be applicable for the period after the judgment ofthe learned Single Judge. LPA No.334/2007 ^

14. Though the learned ASG answers in the affirmative but we have our doubts. In our primafacie view Section 470 (2) providing for extension of limitation period for commencing prosecution will have to be strictly construed and may not apply to a situation as the present. However we hurry ^ ^ to saythatwe are notrendering any opinionnorare werequiredto. The said observations are only in formation of our opinion that even if the appellant, in the event of success in these appeals, would be able to initiate prosecutions, considering the nature of the offence, it would not be a worthwhile exercise for the state machinery and resources to be embroiled and expended therein. Rather we are ofthe opinion that the appellant, if of the opinion that under the new Act i.e. Legal Metrology Act it is entitled to A take action against hotels /restaurants for sale of packaged mineral-water within the hotel / restaurant at more than MRP, should concentrate thereon.

15. The learned ASG states that the concerned provisions in the new Act are same as in the old Act and the judgment of learned Single Judge may come in the way ofthe appellant.

16. The counsel for the writ petitioners is agreeable to our disposing of these appeals with observations that the judgment of the learned Single LPA No.334/2007 6 of[8] r Judge shall not come in the way of the appellant enforcing the provisions of the new Act even if identical or similarto of the old Act and it being left to be adjudicated in the proceedings ifany initiated under the new Act whether hotels / restaurants, are entitled to do so or not. ^ ^ 17. Weaccordinglydisposeofthese appealsinfollowing terms:

Judge is left open for adjudication in any fresh proceeding under the new law and the judgment of the learned Single Judge shall not be a precedent in any such adjudication even if ^ the concerned provisions of the old and the new law are identical / similar.