Telangana High Court
Multiplex Association Of India vs The Controller Of Legal Metrology on 6 August, 2018
THE HON'BLE SRI JUSTICE M.S.RAMACHANDRA RAO
WRIT PETITION No.27029 of 2018
ORDER:
The petitioner is an Association of Multiplex Cinema operators in India formed under the aegis of the Federation of Indian Chambers of Commerce and Industry and claims to represent 18 National and Regional Multiplex chains with more than 500 operational Multiplexes and around 1800 screens across the country.
2. The Controller of Legal Metrology (1st respondent) is an Authority appointed by the Government of Telangana under Section 14 of the Legal Metrology Act, 2009 (for short, 'Act no.1).
3. The petitioner assails order Ref.No.1033/T/2018 dt.17.07.2018 and order Ref.No.1033/T/2018 -1 dt.20.07.2018 of the 1st respondent in this Writ Petition insofar as they are sought to be applied in relation to non-packaged food items supplied and sold by canteens / food kiosks operated in the Multiplexes which are Members of the petitioner's Association on the ground that the said orders are illegal, arbitrary, ultra vires and unconstitutional; to set aside the same; and to restrain the respondents from interfering with the conduct of such business in the said Multiplexes.
2 MSRJ W.P.No.27029 of 2018 The Order Ref.No.1033/T/2018 dt.17.07.2018:
4. The 1st respondent issued order Ref.No.1033/T/2018 dt.17.07.2018 ostensibly under the Weights and Measures Act (sic) (probably the Standards of Weights and Measures Act, 1976 which was repealed by the Legal Metrology Act, 2009), the Legal Metrology Act, 2009 (Section 8, 18(1), 18(2), 20 and sub-Rule 2A of Rule 18 of the Legal Metrology (Packaged Commodities) Rules, 2011(for short 'the Packaged Commodities Rules') ). It states that there was a meeting convened with the owners / representatives / exhibitors of cinema halls and Multiplexes of Telangana on 17.07.2018 and directs as under :
"(a). It is informed that the vendors / shops situated in Cinema Theatres, Multiplexes etc., shall indicate the Net Quantity of the product on the container / packing by sticker and also on the display board to indicate the Weight, Volume or Measures.
(b) Subsequently, from 01.09.2018, the declaration shall be printed on the container / packing.
(c) The system of dual-pricing is in violation of the terms of Legal Metrology. With effect from 01.08.2018, the provisions of Weights and Measures Act will be enforced strictly in this regard.
(d) It is recommended that the Consumer Help-line Toll Free Number - 180042500333 and Consumer Help-line Whatsapp Number - 7330774444 are displayed prominently along with the Price Display Board."
The Order Ref.No.1033/T/2018 -1 dt.20.07.2018 :
5. This Order dt.20-7-2018 issued by the 1st respondent gives certain instructions to Officers of Legal Metrology Department with
3 MSRJ W.P.No.27029 of 2018 respect to Maximum Retail Price (M.R.P.), Weights and Volumes of Goods sold in cinema halls and Multiplexes and is purported to be issued to District Inspectors and Inspectors of Legal Metrology along with Senior Supervisory Officers who were to hold meetings on 23.07.2018 and 24.07.2018 with Multiplex owners / Theatre owners of their jurisdiction and explain to the latter the following :
"i. Food items and soft drinks etc., unpackaged package to be sold by weight or volume.
ii. The weight and volume and the price of the item to be clearly displayed on the display board.
iii. Till 01.09.2018 the food item packaging or the container should contain a sticker of the M.R.P. iv. From 01.09.2018 onwards, it should be printed on the container / package.
v. The Cinema will display the Consumer Helpline toll free number - 180042500333 and Consumer Helpline WhatsApp number - 7330774444.
vi. The Officers will brief the owners to avoid keeping only one brand of water, etc., and given options to the consumer else restrictive practices may be found."
The contentions of the petitioners :
6. Sri S. Niranjan Reddy, Senior Counsel appearing for Ms.Rubaina S. Khatoon, Counsel for petitioners inter alia contended that the Multiplexes which are Members of the petitioner's Association maintain amenities' outlets offering food and beverages to the customers who visit the said Multiplexes for watching movies; these include fast food items and beverages, some of which are 4 MSRJ W.P.No.27029 of 2018 pre-packaged (such as beverage cans, chips, juice bottles, etc.,); and some of which are in unpackaged form [such as samosas, nachos, sandwiches, burgers, vada pav, kachori, pizza, pasta, chat, frankie, sweet corn, ice creams, beverages such as coffee, tea, and soft drinks which are sold in plastic glasses through fountains (commonly referred to as fountain beverages such as pepsi, coca-cola, etc.,)].
7. He contended that these food items in non-packaged form are served in containers such as paper / plastic plates, paper / plastic glasses, tubs, paper / plastic cups or paper / plastic covers/containers;
some of the items can be customized on the spot for sale according to the preferences of the customer unlike in the case of pre-packaged items; for sale of such items, members of the petitioner have secured requisite licenses under the Food Safety and Standards Act, 2006 and also under the local laws of the State; that these unpackaged fast food items and beverages are not subject to Legal Metrology (Packaged Commodities) Rules, 2011 which require declaration of price and weight of a pre-packaged commodity on the package of the commodity (Rule 6) and prohibit any retailer from selling any pre- packaged commodity unless the package of such commodity complies with the Act and the above Rules (Rule 18). He contended that Rule 18 has no application to members of the petitioner since they do not manufacture or pack any pre-packaged commodities.
8. According to him, the Ministry of Consumer Affairs, Food and Public Distribution, Department of Consumer Affairs (Legal 5 MSRJ W.P.No.27029 of 2018 Metrology Division), Government of India, issued proceedings No.WM-7(18)20-12 dt.25.03.2014 stating that sale counters in various PVR Cinemas spread across the country sell refreshments including soft drinks, bottled water, packaged potato wafers, packaged fruit juice, etc., which fall under the category of 'packaged commodities' and would be subject to the Packaged Commodity Rules under the Legal Metrology Act, 2009; however, such sale counters also sell 'open and unpacked items' like nachos, pop-corn, ice creams, sandwiches, burgers, etc., which do not constitute packaged commodities and would not be subject to the above Rules; and advised all Controllers of Weights and Measures of the States that fast food items sold as open and unpackaged ready to eat items by the sale counters of the PVR Cinemas across the country are covered under Rule 26 of the Rules and are exempted from their purview and to keep this in mind during enforcement of the Act and the Rules. He contended that the said PVR Cinemas is also one of the members of the petitioner's Association and the said direction of the said Ministry applies equally to every member of the petitioner association and binds the 1st respondent also.
9. Counsel contended that notwithstanding the same, the 1st respondent issued the impugned orders subjecting members of the petitioner to the requirement of printing by sticker (i) M.R.P., (ii) Net Weight of unpackaged food items and beverages, and (iii) a consumer helpline tollfree number and consumer helpline WhatsApp number on 6 MSRJ W.P.No.27029 of 2018 the containers of such food items and beverages apart from the display board.
10. He further contended that in the Order dt.20.07.2018, the 1st respondent even directed the Officers to direct owners 'to avoid keeping only on brand of water, etc., and give options to the consumer' threatening to find them guilty of restrictive practice, and these directions contained in the impugned orders are wholly beyond 1st respondent's jurisdiction and interferes with the fundamental right of the members of the petitioner to carry on trade of business guaranteed by Article 19(1)(g) of the Constitution of India.
11. He contended that the 1st respondent cannot ignore the provisions of the Act and the Rules which apply only to pre-packaged commodities and compel the petitioners to follow his impugned orders in respect of non-packaged commodities also.
12. He contends that Rule 18(1) of the Rules relied upon by the 1st respondent to issue the impugned orders cannot be made applicable to non-packaged commodities; that the 1st respondent is misapplying the said Rules to such non-packaged commodities being sold by the members of the petitioner; and so, the action of the 1st respondent in issuing the impugned orders dt.17.07.2018 and 20.07.2018 covering non-packaged commodities is ultra vires the Act and the Rules.
13. It is further contended that the 1st respondent has to issue a notification making regulations under Rule 30 of the A.P. Legal 7 MSRJ W.P.No.27029 of 2018 Metrology (Enforcement) Rules, 2011 applicable to Telangana also and any order of the nature of the impugned order passed without a notification in the Official Gazette has no legal validity.
14. Counsel however did not dispute that as regards pre-packaged commodities, the 1st respondent has jurisdiction to issue the orders in question except the one compelling members of the petitioner 'to avoid keeping only one brand of water, etc. and to give options to the consumer'. He also stated that members of the petitioner are compliant of the Act and the Packaged Commodity Rules framed thereunder as regards Pre-packaged food products and beverages and denied that there was any dual pricing of the pre-packaged food products.
15. He also stated that members of the petitioner have been selling the unpackaged food items with proper receipt / invoices and are also displaying the rate list on the menu board properly making a buyer aware of the price and quantity/weight/volume of the items which he is purchasing, and they have thus acted in a consumer-friendly manner.
Counter-affidavit of 1st respondent :
16. The Regional Dy. Controller of Legal Metrology, Headquarters Hyderabad filed a counter-affidavit on behalf of 1st respondent refuting the above contentions.
8 MSRJ W.P.No.27029 of 2018
17. In para no.4 of the counter-affidavit, it is asserted that the impugned orders are issued covering both unpackaged and packaged commodities and that they are well within the ambit of the powers and provisions of the Act and the Rules made thereunder.
18. It is asserted that the Government had issued G.O.Ms.No.9 Consumer Affairs, Food and Civil Supplies (CS.I-CCS) Department dt.29.05.2017 designating the Legal Metrology Department (up to District Legal Metrology Officers and Inspector, Legal Metrology Officers) as agents to take up activity relating to consumer affairs under the Consumer Protection Act, 1986 and to register the cases to discontinue an unfair trade practice or restrictive trade practice.
19. It is stated that any commodity even if it is sold in unpackaged form should conform to the standard unit of such weight or measure; that traders doing business in premises of cinema and Multiplexes are required to comply with the Act and the Rules made thereunder; that the impugned orders are not issued under Rule 30 and they are neither a notification nor regulatory in nature; and that the impugned orders are in conformity with the Act and the Rules and reiterate only what is contained therein.
20. It is acknowledged that unpackaged ready to eat items are sold by sale counters in Multiplexes and such items are covered under Rule 26 of the Legal Metrology (Packaged Commodities) Rules, 2011.
9 MSRJ W.P.No.27029 of 2018
21. It is contended that the impugned orders are referable to Section 11 of the Act read with Rule 10 and 23(9) of the A.P. Legal Metrology (Enforcement) Rules, 2011 insofar as they cover unpackaged ready to eat items. It is stated that the impugned orders only reiterate what is contained in the Act and the Rules.
22. It is stated that the Order dt.25.03.2014 of the Ministry of Consumer Affairs, Government of India on which petitioner relies, is only in the nature of a clarification with regard to sale of open, unpackaged items by PVR Cinemas and that the Central Government has not exempted it or the members of the petitioner from the purview of the Act.
23. It is stated that petitioners are carrying on business by selling unpacked items like pop-corn, ice creams, etc., without declaring the actual weight or measure of the commodity contained in the container and to safeguard the interests of the consumer, the impugned orders have been issued.
24. It is stated that there is no requirement of issuing any notification under Rule 30 of the Legal Metrology (Enforcement) Rules, 2011 including the dual pricing under Rule 2-A of Rule 18 of the Legal Metrology (Packaged Commodities) Rules, 2011 since the 1st respondent is reiterating only the provisions of the Act and the Rules in the impugned orders.
10 MSRJ W.P.No.27029 of 2018
25. The Government Pleader for Civil Supplies and Legal Metrology reiterated the above contentions. The point for consideration :
26. In view of the rival contentions, the point which arises for consideration is:
"(a) Whether the impugned orders issued by the 1st respondent are valid insofar as non-packaged food items sold by members of the petitioner ?
(b) Whether the 1st respondent is entitled to insist that Multiplexes should avoid keeping only one brand of water, etc., and have to give options to the consumer, and if not, restrictive practices would be found against the members of the petitioner ?"
Point (a) :
27. The Legal Metrology Act, 2009 was enacted to establish and enforce Standards of Weights and Measures, regulate trade and commerce in weights, measures and other goods which are sold or distributed by weight, measure or number and for matters connected therewith and incidental thereto. It repealed the erstwhile Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
28. In view of the advancement of technology necessitating review of the said enactments and to make them simple, eliminate obsolete regulations and to ensure accountability and bring transparency, it was enacted. It also has as its object, to protect the interests of consumer and at the same time keep the industry free from undue interference.
11 MSRJ W.P.No.27029 of 2018
29. Section 4 states that 'every unit of weight or measure shall be in accordance with the metric system based on the international system of units'.
30. Section 5(1) clarifies that the base unit of length is 'metre'; of mass is 'kilogram'; of time is 'second'; of electric current is 'ampere'; of thermodynamic temperature is 'kelvin'; of luminous intensity is 'candela'; and of amount of substance is 'mole'; and sub-Section (2) thereof states that derived units and other units from the above specifications of the base units shall be such as may be prescribed.
31. Section 6(1) states that the base unit of numeration shall be the unit of the international form of Indian numerals; Section 6(2) states that every numeration shall be made in accordance with the decimal system; and Section 6(3) states that decimal multiples and sub- multiples of the numerals shall be of such denomination and be written in such manner as they may be prescribed.
32. Section 7 states that the base unit of weights and measures specified in Section 5 shall be the standard units of weights and measures, and the base unit of numeration specified in Section 6 shall be the standard unit of numeration.
33. Section 8(3) states that no weight or measure or numeral other than the standard weight, measure or numeral, shall be used as a standard weight, measure or numeral.
12 MSRJ W.P.No.27029 of 2018
34. Section 10 directs that any transaction, dealing or contract in respect of any goods, class of goods or undertakings shall be made by such weight, measure or numeral as may be prescribed.
35. Section 11 directs that no person shall, in relation to any goods, things or service :
(a) quote, or make announcement of , whether by word of mouth or otherwise, any price or charge, or
(b) issue or exhibit any price list, invoice, cash memo or other document, or
(c) prepare or publish any advertisement, poster or other document, or
(d) indicate the net quantity of a pre-packaged commodity, or
(e) express in relation to any transaction or protection, any quantity or dimension, otherwise than in accordance with the standard unit of weight, measure or numeration.
36. Section 18(1) states as under :
"18. Declarations on pre-packaged commodities -
(1) No person shall manufacture, pack, sell, import, distribute, deliver, offer, expose or possess for sale any pre-packaged commodity unless such package is in such standard quantities or number and bears thereon such declarations and particulars in such manner as may be prescribed.
(2) ... ... ..."
37. Section 2(l) of the Act defines the term 'pre-packaged commodity' to mean a commodity which, without the purchaser being present, is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a predetermined quantity.
13 MSRJ W.P.No.27029 of 2018
38. Sections 25 to 47 provide for penalties for contravention of provisions of the Act.
39. In exercise of powers conferred on the Central Government under sub-Section (2) of Section 52, it framed the Legal Metrology (Packaged Commodities) Rules, 2011.
40. Rule 6 thereof directs that on every package or on a label securely affixed to it, a definite, plain and conspicuous declaration should be made as to (a) name and address of the manufacturer / packer; (b) common or generic names of the commodity contained in it; (c) net quantity in terms of standard unit of weight or measure of the commodity contained in the package or where the commodity is packed or sold by number, the number of the commodity contained in it; (d) month and year in which it is manufactured or pre-packed; (e) retail sale size of the package; (f) the name, address, telephone number, e-mail address of the person who can be or the office which can be contacted, in case of consumer complaints.
41. Rule 7 (1) directs that in case of a package having capacity of 10cc. or less, the principal display panel may be card or tape affixed firmly to the package which shall bear the above information.
42. Rule 18(1) prohibits a wholesale dealer or retail dealer to sell, distribute, deliver, display or store for sale any commodity in the packaged form unless the package complies in all respects with the provisions of the Act and the Rules.
14 MSRJ W.P.No.27029 of 2018
43. The members of the petitioner's Association have no grievance in regard to enforcement of the Act and the Packaged Commodities Rules in regard to pre-packaged commodities sold by them.
44. They also have no grievance insofar as enforcement of Sections 4 to 11 of the Act as regards non-packaged commodities.
45. But their grievance is with regard to the impugned orders insofar as they require affixture by sticker on the container / packing as regards non-packaged food items of net quantity by weight, volume or measure, M.R.P. and a consumer helpline toll free number and consumer helpline whatsapp number and to print a declaration on the container / packing with these details.
46. A reading of the Act and the Packaged Commodities Rules and in particular Rule 6 shows that only in respect of packages / packaged commodities there is an obligation to put M.R.P., net quantity, consumer helpline details. Only on such packages having capacity of 10c.c. or less is it required under Rule 7 to have a display panel with the above details.
47. The definition of the term 'pre-packed commodity' in Section 2(l) that it is 'a commodity which, without the purchaser being present, is placed in a package of whatever nature ...' necessarily excludes fast food items and beverages which are sold in the open, in a non-packaged form, and which are served in containers such as paper / plastic plates, paper / plastic glasses, tubs, paper / plastic cups 15 MSRJ W.P.No.27029 of 2018 or paper / plastic covers, and to items can be customized on the spot for sale according to the preferences of the customer.
48. Therefore, it is un-understandable as to how the 1st respondent issued the impugned orders covering non-packaged food items sold by members of the petitioner's Association and making applicable to such items the requirement of affixture by sticker on the container / packing (a) net quantity by weight, volume or measure, (b) M.R.P.,
(c) consumer helpline toll free number and consumer helpline whatsapp number and (d) ask them to print a declaration on the container / packing these details.
49. Likewise, how sub-Rule 2-A of Rule 18 which deals with dual pricing in relation to pre-packaged commodities, is made applicable to non-packaged commodities, is not explained by the 1st respondent.
50. Rule 26 of the Legal Metrology (Packaged Commodities) Rules, 2011 in fact specifically exempts packages containing fast food items packed by restaurant or hotel and the like (such as the members of the petitioner's Association) from the applicability of the said Rules.
51. In this view of the matter, the directions contained in the impugned orders making applicable to non-packaged items the requirement of affixture by sticker on the container / packing (a) net quantity by weight, volume or measure, (b) M.R.P., (c) consumer helpline toll free number and consumer helpline whatsapp number and
(d) ask them to print a declaration on the container / packing these 16 MSRJ W.P.No.27029 of 2018 details, are clearly ultra vires his powers under the Act and the Rules. It is clearly a colourable exercise of power, which cannot be countenanced.
52. The 1st respondent cannot confer powers on himself which are not conferred on him by the statute in regard to non-packaged commodities and harass members of the petitioner's Association thereby interfering with their fundamental right under Article 19(1)(g) of the Constitution of India.
53. However, it is desirable in consumer interest that members of the petitioner's Association display prominently, at the points of sale of the non-packaged commodities referred to above, on the menu board, the price per standard unit of weights or measures or numerals or multiples thereof and also indicate the same in the sales invoice or bill issued to the customer.
54. In fact Rule 10 of the A.P. Legal Metrology (Enforcement) Rules, 2011 directs such a declaration to be made of quantity in every transaction, dealing or contract as mentioned therein.
55. Therefore Point (a) is answered accordingly in favour of the petitioners and against the respondents.
Point (b) :
56. I shall now consider the contention of the 1st respondent that he has been conferred powers under the Consumer Protection Act, 1985 vide G.O.Ms.No.9 dt.29.05.2017 and is therefore entitled to even look into what products or choices of products are offered to consumers.
17 MSRJ W.P.No.27029 of 2018
57. The said G.O. in its preamble refers to demand of service charges in lieu of tips by certain hotels and restaurants in the State of Telangana as a compulsory charge apart from service tax. The concern of the Ministry of Consumer Affairs, Union of India in that regard is taken note of in the GO and it directs that such service charges are discretionary and voluntary; that a consumer, dissatisfied with service, need not pay them; and such practice may amount to 'restrictive trade practice' under the Consumer Protection Act, 1985.
58. No doubt, in para no.5 thereof it is stated that the 2nd respondent Government is designating Officials of the Legal Metrology Department as agents to take up 'above activity' relating to consumer affairs. But the words 'above activity' have to be understood to be confined only to preventing the restrictive trade practice of some restaurants or hotels collecting a compulsory service charge in addition to service tax and not to anything else, as is being presumed by the 1st respondent.
59. Therefore, it is beyond the jurisdiction of the 1st respondent to not only insist on affixture by sticker on the container / packing of non-packaged food items (a) net quantity by weight, volume or measure, (b) M.R.P., (c) consumer helpline toll free number and consumer helpline whatsapp number and (d) ask them to print a declaration on the container / packing these details, but also to issue a direction that 'owners to avoid keeping only one brand of water, etc., and give options to the consumer'.
18 MSRJ W.P.No.27029 of 2018
60. I therefore hold that the 1st respondent has acted beyond his jurisdiction in issuing a direction that 'owners to avoid keeping only one brand of water, etc., and give options to the consumer'.
61. Point (b) is answered accordingly.
62. The Writ Petition is accordingly allowed; and it is A. declared :
(a) that the impugned orders issued by the 1st respondent insofar as the requirement of affixture by sticker on the container / packing (a) net quantity by weight, volume or measure, (b) M.R.P., (c) consumer helpline toll free number and consumer helpline whatsapp number and (d) asking them to print a declaration on the container / packing these details, do not apply as regards non-packaged food items sold by members of the petitioner's Association; and cannot be enforced by Officials attached to the Office of the 1st respondent insofar as non-packaged food items sold by members of the petitioner's Association;
(b) that the 1st respondent is not entitled to insist that Multiplexes should avoid keeping only one brand of water, etc., and have to give options to the consumer.
B. and the respondents and their officials are restrained:
(a) from enforcing as against the Members of the Petitioner's Association in regard to non-packaged food items sold by them the requirement of affixture by sticker on the container / packing (a) net quantity by weight, volume or measure, (b) M.R.P., (c) consumer helpline toll free number and consumer 19 MSRJ W.P.No.27029 of 2018 helpline whatsapp number and (d) ask them to print a declaration on the container / packing these details; and
(b) from insisting that canteens/ amenities stalls in Multiplexes should avoid keeping only one brand of water, etc., and have to give options to the consumer;
C. It is however directed that members of the petitioner's Association display prominently at the points of sale of the non- packaged commodities referred to above, on the menu board, the price per standard unit of weights or measures or numerals or multiples thereof ; and members of the petitioner's Association display or indicate the details of the commodity, net weight or measure or numerals as per the prescribed standard unit along with the rate at which it is sold, in the sales invoice or bill, within four (04) weeks from to-day, if not already done.
No costs.
63. As a sequel, miscellaneous applications pending, if any, shall stand closed.
__________________________________ JUSTICE M.S.RAMACHANDRA RAO Date: 06-08-2018 Ndr/* Note: Issue CC today B/o vsv