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2011 Supreme(Kar) 559

High Court of Karnataka
THE HONOURABLE MR. JUSTICE N. KUMAR
EWAC Alloys Limited, Mumbai, Rep. by its Head of Finance & Accounts Anil D Dhond & Others
Versus
The Union of India through the Additional Secretary Dept. of Consumer Affairs, New Delhi & & Others
Writ Petition No. 20135 of 2007 (GM-RES)
Decided on : 16-09-2011

Advocates appeared:
For the Petitioners:P.K. Sahu & Vishwanath R Hedge, Advocates.
For the Respondents: R1 - N.R Bhaskar, ACGSC, R2 - Narendra Prasad, GP.

The requirement of Rule 6, which mandates certain declarations on packages, is not applicable to packages sold to industrial consumers through stockists.

Headnote:

Standards of Weights and Measures Act, 1976 - The Act establishes standards of weights and measures, regulates inter-State trade or commerce in weights and measures and other goods sold or distributed by weight, measure or number, and provides for matters connected therewith or incidental thereto. The Act is aimed at protecting the interests of consumers and ensuring proper indication of net quantity, identity, manufacturer's name and address, and price on packaged commodities. The Act is supplemented by the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which prescribe additional requirements for packaged commodities.

Fact of the Case:

The petitioners, a joint venture company engaged in manufacturing welding products, sought a declaration that the provisions of the Standards of Weights and Measures Act, 1976 and the Rules framed thereunder are not applicable to their goods. They challenged the impugned notices and the definition of 'industrial consumer' and 'institutional consumer' in Rule 2-A of the Rules. The respondents contended that the Act and Rules are applicable to the petitioners' packages. The main issue was whether Rule 6, which requires certain declarations on packages, is applicable to packages sold to industrial consumers through stockists.

Finding of the Court:

The court examined the definitions of 'consumer' and 'retail package' under the Act and Rules. It noted that the Act was enacted to protect the interests of consumers and that the definition of 'consumer' excludes persons who obtain goods for resale or for any commercial purpose. The court also considered the provisions of Rule 2-A, which exempts packaged commodities meant for industrial and institutional consumers from the provisions of Chapter II. The court held that the requirement of Rule 6 is not required to be complied with by a manufacturer who sells packaged goods to an industrial or institutional consumer through a stockist. It concluded that the impugned notices were without authority and quashed them.

Ratio Decidendi: The requirement of Rule 6, which mandates certain declarations on packages, is not applicable to packages sold to industrial consumers through stockists.

Result: The impugned notices issued to the petitioners are quashed.

Judgment :-

1. The petitioners have preferred this writ petition seeking declaration that provisions of Standards of Weights and Measures Act, 1976, for short, hereinafter referred to as the ‘Act’ and the Rules framed thereunder are not applicable to the subject goods in so far as petitioner is concerned and for a writ of certiorari quashing the impugned notices and to strike down the definition of ‘industrial consumer’ and ‘institutional consumer’ in Rule 2-A of the aforesaid Rules as being contrary to the scheme of the Standards of Weights and Measures Act and inconsistent with other provisions of the Rules.

2. The first petitioner is a joint venture company between Larsen & Toubro Limited-the second petitioner and the non-resident Messer Eutectic Castolin Group. The first petitioner is engaged in manufacturing welding products such as electrodes, brazing rods, powders and fluxes and selling thereof. These welding products are used mainly in repairs and maintenance work on costly industrial equipments and these are not meant for use in conventional fabrication work. A specialized welding technology process which has been patented as “Eutectic Castolin Welding Process” is used. The first petitioner is selling the products to its associate company and selling agent, the second petitioner. The business division of the second petitioner is selling these products to a network stockiest spread all over India. The third petitioner is one such stockiest in Bangalore. These products are packed in plastic containers known as dripacks in the industry. The dripicks contained the marked quantities and bear on them the declaration “for industrial use only”.

3. The second petitioner is selling these products with the help of a core team of sales/service engineers trained in the specialized “Eutectic Castolin Welding Process.” These sales/service engineers meet the technical personnel of the industrial units and ascertain their requirements for reconditioning, remaking, rejuvenation and restoration of the machinery or equipment and accordingly advise them with reference to the quantities and types of the welding products required, the nature of the processes to be adopted for reconditioning/restoration of the machinery or equipment etc., In case of the leading industrial units, the second petitioner itself carries out the welding process by employing trained service engineer. The sales personnel of second petitioner also identify contractors who are trained for carrying out the special processes of reconditioning etc. and engage them for the purpose. Since the welding products manufactured by the first petitioner are used in specialized welding, the second petitioner conducts training programme for potential customers to educate their technical personnel with respect to the utility of these materials. Sometimes, the stockiest who are trained for carrying out welding process also undertake the contract of carrying out the welding processes ad desired/instructed by the sales/service engineers of petitioner No.2, besides selling of the welding electrode products.

4. The case of the petitioners is that these welding electrode products were seized from the premises of the stockiest of second petitioner by the third respondent alleging that address of the manufacturer or packer and MRP have not been marked on such packages as required under the PC Rules. The petitioners were received with the notice dated 11.09.2007 from the third respondent informing that a case has been registered for violation of Section 39 of the Act and they were asked to appear before the Assistant Controller of Legal Metrology on 17.09.2007. The petitioners have explained to the third respondent that the provisions of the Act and the PC Rules are not applicable to the packages of welding electrode products as these are meant for industrial consumers. These are purchased only by manufacturing industry. These products are very costly in comparison to normal products used b















































































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