Holding

Composite contracts of service with incidental sale of packaged commodities in hotels and restaurants do not fall within the definition of 'sale' under the Standards of Weights and Measures Act, 1976 and the Legal Metrology Act, 2009, and therefore the Acts cannot be used to interdict charging above MRP.

Summary

The Federation of Hotel and Restaurant Associations of India challenged the applicability of the Standards of Weights and Measures Act, 1976, its 1985 Enforcement Act and the Legal Metrology Act, 2009 to the sale of packaged water bottles served in hotels and restaurants at prices above the printed MRP. The Single Judge of the Delhi High Court held that such charging does not constitute a "sale" within those statutes, a view later left open by the Division Bench. On appeal, the Supreme Court examined whether the definition of "sale" in the 1976 Act and the 2009 Act, unchanged despite the Constitution (Forty‑sixth Amendment) Act, covers composite contracts of service with incidental sale of goods. The Court held that the definition of "sale" does not include such composite contracts and that the Acts are intended only to standardise weights, measures and MRP on packaged commodities, not to regulate service‑based transactions. Consequently, the statutes cannot be used to interdict hotels or restaurants from charging above MRP for bottled water. The appeals were allowed and the High Court judgments set aside.

Issues considered

Whether the definition of "sale" under the Standards of Weights and Measures Act, 1976 and the Legal Metrology Act, 2009 includes the supply of packaged water bottles as part of a service in hotels and restaurants.
Whether the Acts and the Rules on packaged commodities apply to transactions in hotels/restaurants where the dominant element is a service and the sale of goods is incidental.
Whether the Constitution (Forty‑sixth Amendment) Act, Article 366(29‑A), alters the statutory definition of "sale" for the purposes of the above Acts.
Whether hotels and restaurants can be prosecuted for charging a price above the MRP for packaged water under the said statutes.

Legislation cited

Constitution (Forty‑sixth Amendment) Acts. Article 366(29‑A)
Legal Metrology Act, 2009s. 2, s. 57
Standards of Weights and Measures Act, 1976s. 50
Standards of Weights and Measures (Enforcement) Act, 1985
Standards of Weights and Measures (Packaged Commodities) Rules, 1977s. Rule 3

Subjects

Legal Metrology ActStandards of Weights and Measures Actdefinition of saleMaximum Retail Pricehotel and restaurant servicescomposite contractsconstitutional amendmentconsumer protectionpre‑packaged commodityjurisdictionpenalty

Judgment

[2017] 12 S.C.R. 503

FEDERATION OF HOTEL AND RESTAURANT A
ASSOCIATIONS OF INDIA
v.
UNION OF INDIA AND ORS.
(Civil Appeal No. 21790 of 2017) B
DECEMBER 12, 2017
[R.F. NARIMAN AND NAVIN SINHA, JJ.]
Weights and Measures - Standards of Weights and Measures
Act, 1976 r!w. Standards {~l Weights and Measures (Enforcement) c
Act, 1985 - Legal Metrology Act, 2009 - Definition of "Sale"- If
applicable to sen•ices rendered in liotels/restaunmts - Actio11 against
appellant-Association for clu11:1?ing higlzer than tlze printed Maximum
Retail Price ( MRP) for supply of packaged water bottles during
serl'ices provided to their customer.1· in hotels and restaurants - In
the writ petition flied by appellant, Single Judge of High Court D
held that chmging prices jiw mineral water in excess of MRP to the
customer.1· in hotels and restaurants does not violate the provisio11.1·
of the SWM Act - Leite rs Patent Appeals ( LPA) - Di Pis ion Bench
disposed of the appeals holding that the judgment of Single Judge
shall not come in the way of tlze respondent in enforcing the E
provisions of the 2009 Act, even if identical or similar to the old
Act, and it was leji to be adjudicated in the proceedings initiated
under the 2009 Act whether hotels/restaurant are entitled to do so
or not - Held: Position qua "sale" remains exactly the same in the
2009 Act as that i11 the 1976 Act, which 11ow stands repealed -
When "sale" of food and drinks takes place in hotels and F
restaurants, there is one indivisible contract of service coupled
incidentally with sale of food and drinks - Single Judge of High
Court was correct in holding that composite indivisible agreements
for supply of services a11d food and drinks in the hotels/restaurants
would not come within the purview of either the 1976 Act or the G
2009 Act - Neither the 1976 Act rlw the 1985 Act, nor the 2009 Act,
would apply .1·0 as to interdict the .rnle of 111i11eral ll'ater in hotels
and restaurants at prices abm•e the MRP - Judgment of Division
Bench of High Court set aside - Standard.1· of Weights and Measures
(Packaged Commodities) Rules, 1977 - The Legal Metrology
H
503
504 SUPREME COURT REPORTS [2017] 12 S.C.R.

A (Packaged Commodities) Rules, 20/l - r.3, Explanation (i) -
Constitllltion (Forty-sixth Amendment) Act - Art. 366(29-A) (j).
Legal Metrology Act, 2009 - Statement of Object and Reasons
- Discussed.
Standards a/Weights and Measures Act, 1976 - Statement of
B Object and Reasons - Discussed.
Allowing the appeals, the Court
HELD: 1.1 On a cursory reading of the definition of "sale"
contained in the Standards of.Weights and Measures Act, 1976,
c it will be clear that "sale" means transfer of property in goods by
one person to another for cash or for deferred payment or forI
any
other valuable consideration. Despite Supreme Court's judgment
in Mis. Associated Hotels of l11dia Ltd. case which was ajudgment
of the year 1972, Parliament chose to adopt the definition of sale
which does not include or split up sales of goods from services in
D composite contracts. A reading of the various penal provisions
that are contained in the 1976 Act, starting with Section 50 sh,ow
that there is no penalty for selling above MRP in hotels .and/or
restaurants. [Para 9] [511-F-G]
. ·.
The State of Punj~'p V; .Mis. Associated Hotels of India'
E Ltd. (1972) 1 SCC 472 : [1972) 2 SCR 937 - referred
to.
1.2 It is dear that when "sale" of food and drinks takes
·place in hotels and restaurants, there is really on·~ indivisible
contract of. service
.
coupled incidenfaliy 'with sale of
. food and
F drinks. Since it is not possible to divide the "service ·element", . '••'
which is the dominant element, from the. "sale element'', it is
clear that such composite contracts cannot be the subject-matter
of sales tax legislation-. [Para 10] [511-H; 512-A] ~
Northern· 1ndia Caterers (India) Ltd. v. Lt. Gbverhor of· "
,.. ·-~·

G Delhi [1979) 1 SCR 557 ; Northern .India Cl~terers
(lhdia) Ltd. v. Lt. Governor of Delhi (19S0) i SCC 167:
[19801 2 SCR 650 ...;. refer.red to.
1.3 Bearing the trilogy of judgments in· Mis. Associaied
Hotels ofllldia Ltd. case and the two Northern India Caterers (India)
H
FEDERATION OF HOTEL AND RESTAURANT 505
ASSOCIATIONS OF INDIA v. U.0.1.

Ltd. vs. Lt. Governor of Delhi cases in mind, Parliament amended A
-'the Constitution and introduced the Constitution (forty-sixth
Amendment) Act, by which it introduced Article 366 (29-A). A
· reading of the constitutional amendment shows that supply by
way of or as part of any service of food or other article for human
consumption is now deemed to be a sale of goods by the person
B
making the transfer, delivery or supply. [Para 11] [512-B-D]
1.4 However, despite the fact that the constitutional
amendment was made way-back in the year 1982, the 1976 Act
was not amended so as to incorporate the definition of sale
contained therein. As is clear from the statement of objects and
reasons for the 2009 Act, the object of the said Act was only to do C
away with the 1976 Act and Standards of Weights and Measures
(Enforcement) Act, 1985 so as to conlbine the saici provisions
into one enactment so as to make the law simple, ensure
accountability, and bring in transparency. [Para 12] [513-A-B]
J:S. On a reading of the Legal Metrology Act, 2009 and the D
Rules made thereunder, it is clear that the position qua ''sale"
remains exactly the same as that contained ill the 1976 Act, which
now stands repealed. This being the case, the Single .Judge of
High Court was absolutely correct in his conclusion that despite
the constitutional amendment having been passed, the definition E
of "sale" contained both in the 1976 Act and now in the 2009 Act
goes to show that composite indivisible agreements for supply of
services and food and drinks would not come within the purview
of either enactment, and that this is for the very good reason that
the object for both these enactments is something quite different
- the object being to standardize weights and measures for defined F
goods so that quantities that are supplied are thus mentioned on
the package and that MRPs are mentioned so that there is one
uniform price at· which such goods are sold.
[Para 13] [514-D-F] '
2. Neither the Standards of Weights and Measures Act, 1976 G
read with the enactment of 1985, or the Legal Metrology Act,
2009, would apply so as to interdict the sale of mineral water in
hotels and restaurants at prices which are above the MRP.
[Para 17] [515·H; 516-A]
H
/
506 SUPREME COURT REPORTS [2017] 12 S.C.R.

A Case Law Refrrence
[1972] 2 SCR 937 referred to Pam 9
[ 1979) 1 SCR 557 referred to Pam IO
[1980] 2 SCR 650 referred to Pam 10
B

CIVIL APPELLATE JURISDICTION : Civil Appeal No."21790
of2017.
From the Judgment and Order dated 11.02.2015 of the High Court
of Delhi at New Delhi in Letters Patent Appeal No. 343 of 2007
c
WITH
Civil Appeal No. 21791 of 2017.
K. V. Viswanathan, Sr. Adv., Sameer Parekh, E. R. Kumar,
Ms. Rukhmini Bobde, Ms. Raveena Rai, Ms. MohonaThakur. Siddhant
D Buxy(for Mis. Parekh & Co.), Advs. for the Appellant.
Ajit Kr. Sinha, R.S. Suri, Sr. Advs., R.R. Rajesh. Ms. Kiran
Bhardwaj. Raj Bhadur, Chirag M. Shroff, Mohan Prasad Gupta.
Ms. Manjula Gupta, B. V. Balramdas, Mrs. Anil Katiyar, Advs. for the
Respondents.
E
The Judgment of the Court was delivered by
R.F. NARIMAN, J. 1. Leave granted.
2. The present appeals arise out of Writ Petition (C) No. 6517/
2003 filed by the Federation of Hotel and Restaurant Associations of
F India in the High Court of Delhi. seeking a declaration that the provisions
of the Standards of Weights and Measures Act, 1976. the Standards of
Weights and Measures (Enforcement) Act, 1985 und the St<mdards of
Weights and Measures (Packaged Commodities) Rules, 1977 are not
applicable to services rendered in the premises of hotels/restaurants.
G 3. The appellant's niain concern was that the Controller of Weights
and Measures was seeking to proceed against the hotels and restaurants
of the appellant-Association for charging a price higher than the printed
Maximum Retail Price ("MRP" in short) for supply of packaged water
bottles during services provided to their customers while in the hotels
H and restaurants. The appellants plead in the Writ Petition that the
FEDERATION OF HOTEL AND RESTAURANT 507
ASSOCIATIONS OF INDIA v. U.O.I. [R.F. NARIMAN .. J.]

transaction consisting predominantly of a service, and not of a sale of A
drinking water, consisted of a composite charge which included incidental
charges for food. drinks etc. The challenge in the Writ Petition resulted
in a judgment by the learned Single Judge dated 05.03.2007. The judgment
of the learned Single Judge referred to and relied upon the decisions in
The State of P1111jab vs. Mis. Associated Hotels of India Ltd. ( 1972) 1 B
SCC 472, Northem India Caterers (llldia) Ltd. vs. Lt. Governor of
Delhi, [1979] 1 SCR 557 .and the review judgment in the latter case
reported in (1980) 2 SCC 167. After discussing these judgments in
detail, and considering the statement of objects and reasons of the
Standards of Weights and Measures Act, the learned Single Judge finally
held: C

"16. In the above analysis I hold 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 D
Restaurateur to its customers. The customer does not enter a
hotel or a restaurant to make a simple purchase of these
commodities. It 1m1y 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
E
therein and incidentally to the ordering of any article for
consumption. Can there by any justifiable reason for the Court or
Commission to interdict the sale of bottled mineral water other
than at a certain price, and ignore the relatively exorbitant charge
for a cup of tea or coffee. The response to this rhetorical query
cannot but be in the negative. Although the vires of Rule 23 have F
been assailed, I do not find it necessary to answer that challenge
since the provision relates to sales between dealers and neither
the hotels and restaurants of the one part and customers of the
other falls within this categorization."

4. In a Letters Patent Appeal filed before the Delhi High Court, G
by a judgment dated 11.02.2015, the Division Bench recorded that the
counsel for the writ petitioners was agreeable to disposing of the appeals
in a particular manner and accordingly, the appeals were disposed of in
such manner. Paras 16 & 17 of this judgment are set out herein below:

H
508 SUPREME COURT REPORTS [2017] 12 S.C.R.

A "16. The counsel for the writ petitioners is agreeable to our
disposing of these appeals with observations that thejudgment of
the learned Single Judge shall not come i11·the way of the appellant
. enforcing the provisions of the new Act even if identical or similar
to the old Act and it being left to be adjudicated iri the proceedings
if any initiated under the new Act whether hotels/restaurants, are
B
entitled to do so or not.
. 17. We accordingly dispose of these appeals in following terms:
A. Owing to the change in law, there is no need to set aside or
affirm the judgment of the learned Single Judge.
c B. However the question oflaw adjudicated by the learned Single
Judge is left open for adjudication in any fresh proceeding under
the new law and the judgment of the learned Single Judge shall
not be a precedent in any such adjudication even ifthe concerned
provisions of the old and the new law are identical/similar.
D C. The appellant shall however not be entitled to initiate any
proceeding/prosecution for violation of the old law in this respect,
even if notices of such violation were issued, as in our opinion,
considering the nature of offence, the long time which has elapsed
and the doubt which has arisen whether such prosecution will be
E within the prescribed time, it is not deemed expedient that the
state resources in this regard, which are already strained, be
expended thereon."
5. A Review Petition was then filed against the aforesaid judgment
which met with no success, in that the review was dismissed by an
order dated 15.05.2015, in which it was pointed out that the practice of
F
review being sought on a ground which is not supported by the original
advocate but by a different advocate has been deprecated, and hence
the review was dismissed.
6. Mr. K.V. Viswanathan, learned Senior Counsel, appearing .on
G behalf of the appellant before us, has argued that both the original as
well as the review order impact his clients in that the judgment of the
learned Single Judge, which is a detailed and comprehensive judgment
dealing with all the law points at hand has been brushed aside, and the
result is that any de novo proceeding under the Legal Metrology Act,.
2009, which has since replaced the two Acts of 1976 and 1985, would
H
FEDERATION OF HOTEL AND RESTAURANT 509
ASSOCIATIONS OF INDIA v. U.0.1. [R.F. NARIMAN,, J.]

transgress the rights of the appellant's clients as this has to be gone into A
de novo. According to the learned Senior Counsel, the concession that
is made cannot possibly bind the appellant as not only is it a concession
on a point oflaw but on a concession made on jurisdiction, and according
to the learned Senior Counsel' once it is conceded, as will be come clear
from a reading of the Legal Metro logy Act, that the position under the B
two statutes, namely, the 2009 Act as well as the repealed Acts is identical,
then the Single Judge's judgment, if it is otherwise good in law, would
require to be confirmed. According to the learned Senior Counsel, having
regard to the judgments of this Court, and having regard to the changes
made by the Constitution (forty-sixth Amendment) Act, contained in
Article 366 (29-A), and further having regard to the fact that despite C
such changes having been made, no such change as was made by the
Constitutional amendment has been made in the definition of"sale" which
continues to. be the same under the 2009 Act as it was under the 1976
Act, the Division Bench ought to have affirmed the judgment of the
learned Single Judge and dismissed the appeal.
D
7. Mr. Ajit Kumar Sinha, learned Senior Counsel, appearing on
behalf of the Union of India has argued before us that we should not go
into the jurisdictional question at all in view of the statement of counsel
made. for the writ. petitioner before the learned Division Bench.
Alternatively, he argued that if for some reason we are to go into the
merits of the case, despite the fact that the 2009 Act admittedly does not E
make any change in the earlier position so far as the definition of "sale"
is concerned, yet a reading of the definition of "pre-packaged commodity"
contained in Section 2(1) of the 2009 Act read with Rule 3 explanation
(1) of the Rules made thereunder would show that hotels such as the
appellant's are within the reach of the statute. and the rules made F
thereunder. He also referred us to Section 57 of the 2009 Act, which
repeals the 1976 Act, and submitted that transactions made under the
old Act would continue as a result. The question that therefore arises in
the present case is: given the fact that the Legal Metrology Act, 2009
Continues with the same definition of "sale" as was contained in the
1976 Act, whether the judgment of the learned Single Judge can be said G
to be correct in law and applicable qua the 2009 Act.
8, A consideration of the statement of objects and reasons of the
l 976Act would show that the said Act is concerned with a provision for
consumer protection by which the proper indication on the package of
H
510 SUPREME COURT REPORTS [20171 12 S.C.R.

A net quantity by weight etc. is contained therein and the price of the
package is also indicated. Further, indication of date of manufacture
and date of expiry would also be marked for appropriate products. The
relevant portion of the said statement of objects and reasons is set out
herein below:
B "5. The Bill further provides for consumer protection in respect
of packaged commodities by providing, in pursuance of the
•
recommendations of the OIML, for the proper indication on the
package of net quantity by weight, measures or number, the identity
of the commodity contained therein, name of the manufacturer,
and what is very important, the price of the package. It is also
c proposed that commodities commonly used by people should be
packed in rationalised standard quantities by weight, measure or
number, so as to facilitate the purchase and comparison of price
by the people. Further, indication of date of manufacture and
date of expiry would also be marked for appropriate products.
D 6. A further provision for consumer protection is the approved
models of weights, measures and weighing and measuring instruments,
which is recommended by the OIML, draft law. The scientific evaluation
of the performance accuracy and dependability of weights, measures
etc. would enable the consumer to buy his requirements with greater
E confidence about accuracy and also give industries the facility to use
more accurate measuring instruments in their production control and
enable the scientists to measure accurately to quantities involved in their
researches. All these benefits will contribute to national development.
7. The main features of the Bill are, -
F (a) establishment of the standards of weights and measures, based
on the SI units, as adopted by the CGPM and recognised by the
OIML;
(b) establishment of the standards of numeration, based on the
international form oflndian numerals;
G
(c) regulation of inter-State trade and commerce in weights and
measures and commodities sold, distributed or supplied by weight
or measure;
(d) regulation of inter-State trade and commerce in commodities
sold, supplied or distributed in packaged form;
H
FEDERATION OF HOTEL AND RESTAURANT 511
ASSOCIATIONS OF INDIA v. U.O.I. [R.F. NARIMAN,, J.]

(e) control and regulation of export and import of weights and A
measures and commodities in packaged form;
(f) approval (before manufacture) of models of weighing and
measuring instruments intended to be manufactured after the
commencement of the proposed legislation;
(g) establishment of an Indian Institute of Legal Metrology for B
imparting training in legal metrology to inspectors and other
persons;
(h) surveys and collection of statistics for facilitating planning and
enforcement of the proposed legislation;
c
(i) punishment for offences against the proposed legislation."
9. We are concerned primarily with the definition of "sale" that is
contained in the 1976 Act as it then stood. Sale is defined as follows:
"2(v) "sale", with its grammatical variations and cognate
expressions, means transfer of property in any ·weight, measure D
or other goods by one person to another for cash or for deferred
payment or for any other valuable consideration, and includes a
transfer of any weight, measure or other goods on the hire-purchase
system or any other system of payment by instalments, but does
not include a mortgage or hypothecation of, or a charge or pledge
E
on, such weight, measure or other goods;"
It will be clear on a cursory reading of the said definition that
"sale" means transfer of property in goods by one person to <mother for
cash or for deferred payment or for any other valuable consideration. It
will be noticed that despite this Court's judgment in Mis. Associated
F
Hotels of India Ltd. (supra), which is a judgment of the year 1972,
Parliament has chosen to adopt the definition of sale which does not
include or split up sales of goods from services in composite contracts.
Also, a reading of the various penal provisions that are contained in the
Act, starting with Section 50 would show that there is no penalty for
selling above MRP in hotels and/or restaurants. G
10. As has been stated in the trilogy of judgments in Mis.
Associated Hotels of llldia Ltd. (supra) and the two Nortlzem India
Caterers (India) Ltd. (supra), it is clear that when ''sale" of food and
drinks takes place in hotels and restaurants, there is really one indivisible
H
512 SUPREME COURT REPORTS [2017] 12 S.C.R.

A contract of service coupled incidentally with sale of food and drinks.
Since it is not possible to divide the "service element", which is the
dominant element, from the "sale element", it is clear that such composite·
contracts cannot be the subject-matter of sales tax legislation,· as was
held in those judgments.
B 11. Bearing these judgments in mind, Parliament amended the
Constitution and introduced the Constitution (forty-sixth Amendment)
Act, by which it introduced Article 366 (29-A). Sub-clause (f), with
which we are directly concerned, reads as follows:-
"366. (29A) (f) a tax on the supply, by way of or as part of any
c service or in any other manner whatsoever, of goods, being food
or any other article for human consumption or any drink (whether
or not intoxicating), where such supply or service, is for cash,
deferred payment or other valuable consideration,
and such transfer, delivery or supply of any goods shall be deemed
D to be a sale of those goods by the person making the transfer,
delivery or supply and a purchase of those goods by the person to
whom such transfer, delivery or supply is made."
A reading of the constitutional amendment would show that supply
by way of or as part of any service of food or other article for human
E consumption is now deemed to be a sale of goods by the person making
the transfer, delivery or supply.
12. What is interesting to note is that despite the fact that the
constitutional amendment was made way-back in the year 1982, the
1976 Act was not amended so as to incorporate the definition of·sale
contained therein. What is of greater importance is to appreciate that
F
when the 2009 Act has replaced the 1976 Act, again the definition of
"sale" contained in the 2009 Act reads as follows:
"(r) "sale'', with its grammatical variations and cognate expressions,
means transfer of property in any weight, measure or other goods
by one person to another for cash or for deferred payment or for
G
any other valuable consideration and includes a transfer of any
weight, measure or other goods on the hire-purchase system or
any other system of payment by instalments, but does not include
a mortgage or hypothecation of, or a charge or pledge on, such
weight, measure or other goods;
H
FEDERATION OF HOTEL AND RESTAURANT 513
ASSOCIATIONS OF INDIA v. U.0.1. [R.F. NARIMAN,, J.]

As is clear from the statement of objects and reasons for the A
2009 Act, the object of the said Act was only to do away with the 1976
and i 985 Acts so as to combine the said provisions into one enactment
so as to make the law simple, ensure accountability, and bring in
transparency. The statement of objects and reasons for the 2009 Act
reads as follows:-
B
"STATEMENT OF OBJECTS AND REASONS
In India, uniform standards of weights and measures based on
the metric system, were established in the year 1956, which were
revised in the year 1976 with a view to give effect to the
international system of units. Apart from it, the Standards of c
Weights and Measures Act, 1976 provides for establishing
Standards of Weights and Measures, regulation of inter-State trade
or commerce in weights and measures and other goods which
are sold by weight, measure or number. In the year 1985, the
Standards of Weights and Measures (Enforcement) Act, 1985
was enacted for enforcement of standards of weights and D
measures established by or under the 1976 Act.
2. The advancement of technology has necessitated the review
of above mentioned enactments to make them simple, eliminate
obsolete regulations, ensure accountability and bring transparency.
E
3. It has become imperative to combine the provisions of the
existing two Acts to get rid of anomalies and make the provisions
simple. It has also become necessary to keep the regulation
pragmatic to the extent required for protecting the interest of
consumers and at the same time keep the industry free from undue
interference. It has also become necessary to recognise certain F
"Government approved Test Centres" which will .be empowered
to verify prescribed weights or measure.
4. The Bill, inter alia, provides for,-
(a) regulation of weight or measure used in transaction or for G
protection;
(b) approval of model or weight or measure;
(c) verification of prescribed weight or measure by Government
approved Test Centre;
H

/
'--..
514 SUPREME COURT REPORTS [2017] 12 S.C.R.

A (d) prescribing qualification oflegal metro logy officers appointed
by the Central Government or State Government;
(e) exempting regulation of weight or measure or other goods
meant for export;
(f) levy of fee for various services;
B
(g) nomination of a Director by a company who will be responsible
for complying with the provisions of the enactment;
(h) penalty for offences and compounding of offences;
(I) appeal against decision of various authorities; and
c (j) empowering the Central Government to make rules for enforcing
the provisions of the enactment."
13. On a reading of the said Act and the Rules made thereunder,
it is clear that the position qua "sale" remains exactly the same as that
contained in the 1976 Act, which now stands repealed. This being the
D
case, we are of the view that the learned Single Judge was absolutely
correct in his conclusion that despite the constitutional amendment having
been passed, the definition of "sale" contained both in the 1976 Act and
now in the 2009 Act would go to show that composite indivisible
agreements for supply of services and food and drinks would not come
E within the purview of either enactment, and that this is for the very good
reason that the object for both these enactments is something quite
different - the object being, as has been pointed out above, to standardize
weights and measures for defined goods so that quantities that are
supplied are thus mentioned on the package and that MRPs are
mentioned so that there is one uniform price at which such goods are
F
sold.
14. Mr. Sinha, learned Senior Counsel, however, has argued be.fore
us that given the fact that learned Senior Counsel on behalf of the
appellant had made a concession before the Division Bench, we should
not interfere with the said judgment. It is settled law that any such
G concession made on a question relating to jurisdiction to proceed further,
particularly qua criminal prosecutions, does not bind the pa1ty in question.
It is ofutmost importance for all to know exactly how they stand in such
cases. Also, Mr. Sinha's reliance upon Section 2(1) of the 2009 Act read
with Rule 3 of the Rules does not take us very much further. Section
H 2(1) of the 2009 Act reads as follows:-
FEDERATION OF HOTEL AND RESTAURANT 515
ASSOCIATIONS OF INDIA v. U.0.1. [R.F. NARIMAN,. J.]

"(!)''pre-packaged commodity" means a commodity which without A
the purchaser being present is placed in a package of whatever
nature, whether sealed or not, so that the product contained therein
has a pre-determined quantity;"
15. A cursory reading of the aforesaid definition would show that
.it refers only to the fact that a pre-packaged commodity should have a B
pre-determined quantity as stated in the definition section. It has no
bearing whatsoever on the issue before us. Equally, reliance upon Rule .
3 of the 2011 Rules again does not lead us anywhere. Rule 3 of the said
Rules read as follows:-
"3. Applicability of the Chapter.- The provisions of this Chapter c
shall not apply to,-
( a) packages of commodities containing quantity of more than 25
kg or 25 litre excluding cement and fertilizer sold in bags up to 59 .
kg;and ·
(b) packaged commodities meant for industrial consumers or D
institutional consumers.
Explanation.- For the purpose of this rule,-
(i) "institutional consumer" means the institutional consumer like
transportation; Airways, Railways, Hotels, Hospitals or any other
E
service institutions who buy packaged commodities directly from
the manufacturer for use by that institution;
(ii) "industrial consumer" means the industrial consumer who buy
packaged commodities directly from the manufacturer for use by
that industry."
F
16. Mr. Sinha relied upon the definition of institutional consumer
contained in explanation (i) in order to show that hotels, in particular,
would be under the coverage of the Act read with the Rules. First and
foremost, a reading of the opening of Rule 3 would show that the
provisions of the Chapter would not apply to packaged commodities
meant for institutional consumers such as hotels. Also, the Rules cannot G
take us very much further when it has already been held by us that the
Act itself would not apply for the reasons given herein above.
17. We are, therefore, of the view that neither the'Standards of.
Weights and Measures Act, 1976 read with the enactment of 1985, or
H /
/
/
516 SUPREME COURT REPORTS [2017] 12 S.C.R.

A the Legal Metrology Act, 2009, would apply so as to interdict the sale of
mineral water in hotels and restaurants at prices which are above the
MRP.
18. The appeals are accordingly allowed and the judgments dated
11.02.2015 and 15.05.2015 of the High Court are set aside.
B

Divya Pandey Appeals allowed.