SRINAGAR: Holding that there was no legal prohibition on manufacturers declaring different Maximum Retail Prices (MRPs) for identical pre-packaged commodities before January 1, 2018, the High Court of Jammu & Kashmir and Ladakh has quashed criminal proceedings against Hindustan Coca-Cola Beverages Pvt. Ltd. over the sale of a 600 ml Coca-Cola bottle carrying an MRP of Rs 60 at a Domino’s Pizza outlet in Katra.
The Court ruled that the prosecution under the Legal Metrology Act was legally unsustainable as the alleged offence occurred in October 2016, when no statutory provision barred differential MRPs.
Justice Rajnesh Oswal delivered the judgment on July 3 in CRMC No. 395/2017, titled Hindustan Coca-Cola Beverages Pvt. Ltd. vs Assistant Controller, Legal Metrology, Reasi & Another. The matter had been reserved for judgment on May 29.
The Court quashed the criminal complaint titled Inspector, Legal Metrology, Reasi vs Domino’s Pizza, Katra & Another, along with the order of the Judicial Magistrate First Class, Reasi, taking cognisance of the complaint and issuing process against the company and its co-accused.
The case arose from an inspection conducted by the Legal Metrology Department on October 25, 2016, at a Domino’s Pizza outlet in Katra. During the inspection, officials found that a 600 ml Coca-Cola PET bottle was being sold at Rs 60, whereas an identical bottle was available in the open market with an MRP of Rs 35. Treating the price difference as an overcharge of Rs 25, the department filed a criminal complaint alleging violation of Section 18 of the Legal Metrology Act, 2009, read with Rules 2(bc) and 6 of the Legal Metrology (Packaged Commodities) Rules, 2011.
The petitioner company argued that at the relevant time neither the Act nor the Rules prohibited manufacturers from printing different MRPs for identical products intended for different trade channels. It contended that every bottle carried the mandatory statutory declarations, including the printed MRP, and that there was no allegation that the product had been sold above the MRP printed on its label.
The company further submitted that the prohibition against different MRPs for identical pre-packaged commodities was introduced only through an amendment to Rule 18 by insertion of sub-rule (2A), which came into force on January 1, 2018, and could not be applied retrospectively to conduct occurring in 2016.
Opposing the petition, the Legal Metrology Department maintained that charging Rs 60 for a bottle available at Rs 35 in the open market amounted to illegal overcharging and arbitrary dual pricing in violation of the Legal Metrology Act and the Packaged Commodities Rules.
After examining the statutory provisions, the High Court observed that Section 18 of the Act merely requires pre-packaged commodities to carry prescribed declarations and particulars, including the retail sale price. It noted that Rule 18, as it existed in 2016, prohibited sale of packaged commodities above their declared retail sale price but did not prohibit manufacturers from declaring different MRPs for identical products.
Justice Oswal observed that the respondents had failed to demonstrate how Rule 2(bc), which was only a definitional provision relating to “institutional consumers”, could form the basis of criminal prosecution.
The Court further held that the product in question admittedly carried a declared MRP of ₹60 and there was no allegation that it had been sold above the printed price. It observed that the statutory restriction prohibiting different MRPs on identical pre-packaged commodities was introduced for the first time through the 2017 amendment, effective from January 1, 2018.
“It is manifest that on the date of the alleged inspection, there existed no bar preventing a manufacturer from declaring differential MRPs for an identical product,” the Court held.
Holding that continuation of the prosecution would amount to an abuse of the process of law, the High Court quashed the complaint, the order taking cognisance, and all consequential proceedings pending before the Judicial Magistrate First Class, Reasi.
The Court also directed that a copy of the judgment be forwarded to the trial court for information.
