A Division Bench of the Kerala High Court on Monday stayed the Single Judge’s order holding that star hotels can charge more for soft drinks and other beverages, i.e. higher than the MRP (maximum retail price). The Bench comprising Justice K M Joseph and Justice A Hariprasad passed the order on an appeal filed by the state government challenging the order.
While allowing the petition by Taj Kerala Hotels and Resorts Ltd, the Single Judge had observed that charging prices for soft drinks in excess of the MRP printed on packaging during the service of customers in hotels and restaurants does not violate any of the provisions of the Standards of Weights & Measures (SWM) Act as this does not constitute a sale or transfer of these commodities by the hotelier or restaurateur to its customers.
Senior Government Pleader C R Shyam Kumar submitted that all hotels and restaurants are entitled to charge only the fixed MRP on the product and not more. Whether it is in opened form or packaged, hotels have no right to charge excess rate, he said.
The Single Judge had held that there was no illegality in charging in excess of the MRP and observed that such overpricing could be justified since the customers also enjoy the ambience of such hotels. The hotel group had submitted that laws regarding the MRP were not applicable to the hotel industry.
Meteorology Inspector had inspected Hotel Taj Residency on January 4, 1999, and seized 24 bottles of Pepsi Cola alleging violation of the standard of Weights and Measures (Package Commodities) Rules, 1977. The specific allegation against the hotels was that Pepsi Cola, which has an MRP of `8, was being sold for `35, thereby, violating the provisions contained in the Act and the Rules.
The petitioner had submitted that what was being sold is not only a product, but also an experience, including the luxurious ambience of the hotel and other facilities for which an amount in excess of the MRP was collected from the customer.