The recent decision by the Supreme Court to allow restaurants and hotels to charge above the Maximum Retail Price (MRP) on pre-packaged products has not gone down well with restaurant-goers and consumers rights’ organisations. Restaurateurs, though, see no problem with the ruling.
The apex court rejected the government’s argument that over-charging for pre-packaged products was an offence, and held that the provisions of the Legal Metrology Act do not apply to restaurants and hotels, as services are also offered along with the product.
Different interpretations
This decision has alarmed consumer protection bodies, and given rise to considerable worry among consumers.
Dr. Manohar Kamath, honorary secretary of the Consumer Guidance Society of India (CGSI), termed it as an extremely disappointing decision by the court. “This gives the hotel owners liberty to charge as much as they want and leaves the consumers open to exploitation. Knowing our traders, it can be understood that this decision will be interpreted in many ways, ultimately opening doors wide for various malpractices.”
Mr. Kamath said the order was extremely ambiguous. “The server, of course, deserves to be paid, but there is need for some definition of services along with a regulation. There should be some regulation that should set a bar for how much more can one charge and for what,” he said.
Malpractice worry
Gayatri Shinde (19), a student, said the order could lead to malpractices. “It is not only about packaged water. And with no proper system in place, a ₹10 product can be easily sold for ₹50, which is not fair,” she said. Ameya Patil (46) sought to know the thought process behind a decision that concerns consumers.
‘Obsession with hotels’
The Supreme Court decision came while hearing a petition filed against the government by the Federation of Hotels and Restaurants Association of India (FHRAI). Dilip Datwani, vice-president, FHRAI, said, “It is the right decision. I don’t understand the obsession with just hotels and restaurants. Nobody ever questions why on a budget flight, pre-packaged food or drinks are priced exorbitantly.”
Mr. Datwani said when a customer enters a restaurant, he is served water for free. “The question of us being insensitive towards the consumers by charging more for packaged water does not arise,” he said.
FHRAI said a business is supposed to be run in such a manner that losses are covered. “When my hotel is in loss, the government is not going to bail me out. The menu card clearly states the price. Nobody is compelling anybody to pay more here,” Mr. Datwani said.
