The Jammu and Kashmir High Court on Friday quashed a criminal case lodged in 2016 against Hindustan Coca-Cola Beverages for pricing Coca-Cola bottles at two different rates [Hindustan Coca-Cola Beverages Pvt. Ltd. v. Assistant Controller Legal Metrology, Reasi].
The Court found that the law at the time did not bar manufacturers from declaring different Maximum Retail Prices (MRPs) for the same product
The case was registered after an inspection found that a 600 ml Coca-Cola bottle was priced at ₹60 in Domino's Pizza, Katra, while the same quantity of the beverage carried an MRP of ₹35 in the open market. Coca-Cola eventually moved the High Court to quash this case.
By a July 3 verdict, Justice Rajnesh Oswal held that, at the time of the inspection on October 25, 2016, neither the Legal Metrology Act, 2009 nor the Legal Metrology (Packaged Commodities) Rules, 2011, prohibited dual MRPs for identical pre-packaged commodities.
The Court observed that the prohibition on differential MRPs was introduced only through the insertion of Rule 18(2A). The amendment was introduced in 2017, but only came into force on January 1, 2018.
"It is, therefore, manifest that on the date of the alleged inspection, there existed no bar preventing a manufacturer from declaring differential MRPs for an identical product. This restriction was brought into force for the first time only w.e.f. 01.01.2018 through G.S.R. 629(E), dated 23rd June, 2017. Consequently, this Court is of the considered opinion that the uncontroverted facts fail to disclose the commission of any offense by (Coca Cola)," the Court ruled.
The case had been filed by the Legal Metrology Department, accusing Hindustan Coca-Cola of overcharging by ₹25 on Coca-Cola bottles that were allegedly sold in premium outlets at ₹60.
A Judicial Magistrate First Class (Munsiff) at Reasi also took cognizance of the complaint and issued process against Hindustan Coca Cola, prompting it to move the High Court to quash the criminal proceedings in 2017.
The company argued that the bottle in question carried all declarations required by law, including the printed MRP of ₹60, and there was no allegation that it had been sold above the MRP printed on its own package.
The petitioner further submitted that different MRPs for identical products sold through different trade channels were a recognised commercial practice and that sales through premium outlets such as restaurants could not be equated with sales in ordinary retail outlets.
It also relied on the fact that the legal prohibition on dual MRPs was put into effect only in 2018, and could not be invoked for an inspection conducted in 2016.
The Court found force in this submission and quashed the criminal case against Hindustan Coca-Cola Beverages.
"Initially, Rule 18 of the Rules contained no prohibition against declaring differential MRPs for the same product; however, following an amendment in 2017, sub-rule (2A) was inserted into Rule 18 to introduce such a restriction, which provides that ‘Unless otherwise specifically provided under any other law, no manufacturer or packer or importer shall declare different maximum retail prices on an identical pre-packaged commodity by adopting restrictive trade practices or unfair trade practices as defined under 2[clause (nnn) and clause (r), respectively] of sub-section (1) of section 2 of the Consumer Protection Act, 1986 (68 of 1986),'" it observed.
Advocate Virender Bhat appeared for Hindustan Coca Cola.
Deputy Advocate General Dewakar Sharma, appeared for the Legal Metrology Department.
[Read Order]