Packaged commodity pricing in hotels: service transactions do not attract MRP restrictions for bottled mineral water.

A hotel or restaurant transaction was treated as a service contract, with supply of packaged mineral water being merely incidental to that service. On that construction, the Standards of Weights and Measures Act, 1976 and Rule 23 of the Packaged Commodities Rules, 1977 were held to regulate packaging declarations and retail sale conditions, not the price charged in a hotel or restaurant setting where there is no sale or transfer of the commodity as such. The Court therefore concluded that charging above the printed MRP for bottled mineral water served in hotels and restaurants does not contravene the Act, because the provisions relied on do not operate as a price-control restriction on the service provider.

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Issues: Whether charging customers in hotels and restaurants a price above the MRP printed on packaged mineral water violates the Standards of Weights and Measures Act, 1976 and the Packaged Commodities Rules, 1977.

Analysis: The transaction between a hotelier or restaurateur and a customer was held to be essentially one of service, with the supply of food and beverages being incidental to that service. The statutory scheme of the Standards of Weights and Measures Act, 1976 was examined and found to be directed primarily to packaging declarations, including net quantity, identity, and retail sale price, rather than to regulating the price charged in a hotel or restaurant setting where no sale or transfer of the packaged commodity as such takes place. Rule 23 of the Packaged Commodities Rules, 1977 was read as operating in the context of retail sales between dealers and consumers, not as extending to service transactions in hotels and restaurants. The Court also treated the constitutional distinction between standards of weight and measure on the one hand and price control on the other as supporting this construction.

Conclusion: Charging above MRP for bottled mineral water served in hotels and restaurants does not violate the Standards of Weights and Measures Act, 1976, because the transaction is not a sale or transfer of the commodity by the hotelier or restaurateur to the customer.

Ratio Decidendi: Where the dominant nature of the transaction is service and the supply of a packaged commodity is merely incidental to that service, the statutory provisions governing retail sale price in packaged commodities do not apply as a price-control restriction on the service provider.

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