Hotel industry has hailed Supreme Court’s judgement of allowing hotels and restaurants to sell packaged drinking water and other packaged products above their MRP. By rolling out this decision, the apex court has agreed that hotels and restaurants don’t fall in the periphery of Legal Metrology Act hence; they cannot be caped under MRP umbrella.
Leading hospitality industry association HRAWI (Hotel and Restaurant Association of Western Association) has expressed satisfaction over the judgement. Dilip Datwani, president, HRAWI, stated, “The judgement has come as a relief for the hotel industry. We wish to thank the Supreme Court for acknowledging our concern and making a just decision. Hotels do not sell packaged drinking water, aerated drinks or any such packaged commodity, hotels serve it. HRAWI congratulates its members on this win and assures them that the association will continue to serve in its interest.”
The judgement was passed on a Special Leave Petition by Federation of Hotel and Restaurant Associations of India (FHRAI) against the Union of India.
The bench stated that hotels and restaurants sell packaged food and water, they also render certain additional services, hence it becomes a composite transaction for which they should not be compelled to sell such items at MRP and provisions of the Legal Metrology Act would not be applicable.
The SC upheld that the customer does not enter a hotel or a restaurant for simple purchase of the bottled water and other packaged products. It further said that if a customer would order nothing beyond bottled water or a beverage for this, his direct purpose is very clear to travel to enjoy the ambience of the hotel.
The court confirmed the earlier judgement pronounced on March 5, 2007, by Single Bench of High Court of Delhi that charging price above MRP on bottle of mineral water and other packaged commodities while serving to the guest/customer, hotel & restaurant do not violate any provision of the Standard of Weights and Measures Act.