SELLING AT MRP NOT APPLICABLE FOR HOTELS & RESTAURANTS BY HOTEL BODY ISSUE CLARIFICATION

by Shrutee K/DNS

Mumbai, 18 Oct: The Hotel and Restaurant Association of Western India (HRAWI), in a bid to remove any ambiguity over selling water, aerated drinks and similar commodities above the Maximum Retail Price (MRP), has issued a circular to its members clarifying that hotels and restaurants could continue to sell the same above the MRP. However, if such commodities are being sold over the counter then it is advised that they be sold at MRP only.

The HRAWI is a member association in the western region of the Federation of Hotel and Restaurant Associations of India (FHRAI), the apex body of hotels and restaurants in the country. It issued the circular in response to queries posed by members after a section of the media quoting Consumer Affairs Minister Ram Vilas Paswan carried a news item that selling water and aerated drinks above MRP could attract fine and a jail term. Some news items had also wrongly stated that Hotel Association’s cases have been dismissed in High Court and Supreme Court.

“Running the story without appropriate verification has caused confusion and misunderstanding between hoteliers and their patrons. As per the present law, there is no such legal repercussion that can prosecute a hotel or restaurant for the sale of either packaged drinking water or aerated drinks or any such commodity above the MRP while being served in the premises i.e, inside Hotels and Restaurants. So we have advised our members that they can continue selling at suitable rates as the MRP law applies to retailers only,” says Mr Pradeep Shetty, Hon Secy, HRAWI & Chairman - Legal Matters sub-committee, FHRAI & HRAWI.

FHRAI had filed a Writ Petition before the Delhi High Court challenging the notices issued under the then prevailing law namely the Standards of Weights and Measures Act for serving water above MRP.  The Ld. Single Judge of the Delhi High Court by judgment dated 5.3.2007 in W.P. No 6517 of 2003 allowed the writ petition filed by FHRAI holding inter alia 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…”

“There after, two other Courts ( Kerala and Delhi HC ) have also held non-applicability of MRP to items sold in hotels and restaurants. It is regrettable that wrong information continues to circulate even on matters like these. Nobody comes to a hotel or a restaurant to purchase goods or commodities; they come to our establishments to enjoy service and ambience. As hoteliers, our primary focus is on providing memorable experiences,” concludes Mr. Dilip Datwani, President, HRAWI.

About Hotel & Restaurant Association Western India (HRAWI): The Hotel and Restaurant Association (Western India) is a 66 years old Association of Hotels and Restaurants in Western India. Its members include smaller Hotels up to 5-Star Deluxe categories. The bulk of its members like any growth economy are made up of budget hotels. HRAWI covers Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and the Union Territories of Daman, Diu & Silvassa, and is considered to be the voice of the Hotel Industry. The association is part of the national body of Federation of the Hotels & Restaurants Associations of India (FHRAI), located in New Delhi, which was originally founded in Mumbai in 1950 by the late Mr. J.R.D. Tata.