Dr J C Vashista
(Expert) 06 November 2021
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(Querist) 06 November 2021
Are the Restaurants authorised to collect more than the MRP??
(Expert) 06 November 2021
With the help of this provision service charges charged by hotels to customers would be considered unfair trade practices if they are not appropriate. Generally, restaurants charge a 5-10% service charge but some hotels charge up to 30% which is not an appropriate amount and it can be considered as unfair trade practice. Under Section 2(47) in the Consumer Protection Act, 2019 “A trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices.”
(Querist) 07 November 2021
Thank you Sir for your reply
(Expert) 13 November 2021
The settled legal position is that there is nothing illegal or unfair in the restaurants charging more than MRP while serving water bottles.
In this context, the Delhi High Court had held in Writ Petition (C) No. 6517/2003 as follows.
“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 by 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. Although the vires of Rule 23 have been assailed, I do not find it necessary to answer that challenge since the provision relates to sales between dealers and neither the hotels and restaurants of the one part and customers of the other falls within this categorization.”
The ratio, as above, has been upheld by the Supreme Court in its Judgment dated December 12, 2017 CIVIL APPEAL NO. 21791 OF 2017 -
"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."