Hotels, restaurants and the law: India

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Star hotels can charge more than MRP: Kerala HotelChatter,

Mahir Haneef, TNN | Jul 14, 2013

KOCHI: Star hotels can charge a higher price for soft drinks and other beverages than the MRP (maximum retail price), the high court of Kerala has said.

Ruling that there was no illegality in charging in excess of the MRP, justice B P Ray said such overpricing could be justified since the customers also enjoy the ambience of such hotels.

The ruling was on a petition by Taj Kerala Hotels and Resorts Ltd. The petition sought a declaration by the court that the MRP was not applicable to beverages sold in star hotels.

The petition also challenged MRP restrictions under the Standards and Weights and Measures Act of 1976 (SWM Act), Standards and Weights and Measures (Enforcement) Act of 1985, and Standards of Weights and Measures (Packaged Commodities) Rules of 1977.

The hotel group submitted that laws regarding MRP were not applicable to the hotel industry. Counsel E K Nandakumar argued that the hotels were not selling just a product, but an experience, which also included the luxurious ambience.

Opposing the argument, senior counsel T Sanjay appearing for the Central government submitted that rules on MRP were applicable to all those selling commodities—from street vendor to star hotels.

Ruling in favour of the hotel group, justice Ray said: "I am of the considered view that charging prices for soft drinks 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."

The court held that customers normally won't visit a hotel or restaurant only to purchase beverages. The visits would also be to enjoy the ambience provided by the hotels.