Case Note & Summary
The petitioner, Mars Enterprises and Hospitality Pvt. Ltd., operates a restaurant named 'Pizza by the Bay' in Mumbai. The restaurant provides food, beverages, and other amenities to its guests. On 16 June 2017, Respondent No.3, a Legal Metrology Inspector, conducted a surprise inspection and alleged that the restaurant had sold a bottle of Fanta with a printed MRP of Rs.38 for a total price of Rs.244, thereby contravening the Legal Metrology Act, 2009. A notice dated 3 July 2017 was issued to the petitioner. The petitioner filed a writ petition seeking a declaration that the Legal Metrology Act and rules are not applicable to the service of food and beverages at its restaurant, and to quash the notice and seizure receipt. The court framed the issue of whether the Act applies to restaurant services. The petitioner argued that it does not sell prepackaged commodities but only serves food and beverages as part of its service. The respondent contended that the sale of a soft drink bottle constitutes a sale of a prepackaged commodity. The court analyzed the definitions under the Act, particularly 'prepackaged commodity', and held that the Act applies only to sale of prepackaged commodities intended for retail sale. Since the restaurant serves food and beverages as a service, the transaction is not a sale of goods. The court quashed the notice and seizure receipt, ruling that the Legal Metrology Act does not apply to restaurant services.
Headnote
A) Legal Metrology - Applicability to Restaurants - Service vs. Sale - Legal Metrology Act, 2009, Sections 2, 3, 18, 36 - The court considered whether the Act applies to restaurants serving food and beverages. It held that the Act applies only to sale of prepackaged commodities and not to service of food and beverages in a restaurant, as the transaction is a service and not a sale of goods. The notice and seizure were quashed. (Paras 2-10) B) Legal Metrology - Prepackaged Commodity - Definition - Legal Metrology Act, 2009, Section 2(l) - The court examined the definition of 'prepackaged commodity' and held that a soft drink served in a restaurant is not a prepackaged commodity as it is not intended for retail sale but for consumption on premises. (Paras 4-8) C) Legal Metrology - Maximum Retail Price - Applicability - Legal Metrology Act, 2009, Section 18 - The court held that the requirement to sell at MRP applies only to sale of prepackaged commodities and not to items served as part of restaurant service. Charging above MRP for a soft drink served in a restaurant does not contravene the Act. (Paras 5-9)
Issue of Consideration
Whether the provisions of the Legal Metrology Act, 2009 and the rules framed thereunder are applicable to the service of food and beverages at a restaurant.
Final Decision
The court allowed the writ petition, declaring that the Legal Metrology Act, 2009 and rules are not applicable to the service of food and beverages at the petitioner's restaurant. The notice dated 03/07/2017 and seizure receipt dated 16/06/2017 were quashed and set aside.
Law Points
- Legal Metrology Act
- 2009 applies only to sale of prepackaged commodities
- not to service of food and beverages in restaurants
- Service of food and beverages is a service
- not a sale of goods
- MRP restrictions under Legal Metrology Act do not apply to items served as part of restaurant service
