1. Packaged alcohol sold above MRP by a licensed bar — Deficiency in service and unfair trade practice alleged. (Para 1 , 2 )
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2025 Supreme(Online)(SCDRC) 23619
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
S. Karuppiah, Presiding Judicial Member
Manager, Amirtham Bar, Hotel Aryaas – Appellant
Versus
G. Venkatesh – Respondent
F.A.No.18/2020
Advocates:
For the Appellants/Petitioners: S.B. Kamalanathan
For the Respondents: Called absent
For the Appellants/Petitioners: S.B. Kamalanathan
For the Respondents: Called absent
Sale of packaged commodities (like alcohol or mineral water) in hotels/restaurants for on-site consumption is a composite service of providing amenities and is not a 'retail sale'; hence, such establishments can legally charge above the MRP.
Headnote:(A) Consumer Protection - Pricing of Packaged Commodities in Hotels/Bars - Sale of alcohol in a licensed bar (FL3 license) where consumption is restricted to premises is treated as a composite service. The cost of amenities such as air conditioning, ambiance, and service are incidental to the consumption, making the transaction indivisible. (Para 9)
(B) Legal Metrology - Applicability of MRP - Sale of packaged goods within a hotel or restaurant for consumption on-site does not constitute a 'retail sale' as defined under the Legal Metrology (Packaged Commodities) Rules 2011, and therefore, charging above the Maximum Retail Price (MRP) is permissible. (Para 7, 8)
Issues: Whether a licensed Hotel/Bar is entitled to sell packaged alcohol at a price exceeding the MRP when served as part of a composite service within its premises.
Legal Category Hierarchy
Table of Contents
2. Bar contends FL3 license permits charging above MRP due to value-added services; complainant asserts MRP applies. (Para 3 , 4 )
3. Sale in a licensed FL3 bar is a service transaction, not retail sale, so MRP rules do not apply. (Para 7 , 8 , 9 )
4. Legal Metrology Act and MRP restrictions do not apply to service transactions in licensed bars under FL3 license. (Para 7 , 8 )
5. Appeal allowed, District Commission order set aside; complaint dismissed. (Para 10 )
6. Can a licensed bar charge above MRP for alcohol served to guests?
Yes, because the transaction is a service, not a retail sale, so MRP restrictions under the Legal Metrology Act do not apply. (Para 7 , 8 , 9 )
7. What is the effect of an FL3 license on the applicability of MRP rules?
An FL3 license prohibits retail sale of alcohol for off-premises consumption; the sale is a service, thus MRP rules are inapplicable. (Para 7 , 8 )
Aggrieved by the order passed by District Consumer Disputes Redressal Commission, Tirunelveli made in C.C.No.40/2018, dated 21.01.2020. The Appellants/Opposite parties 1 & 2 preferred the appeal. This appeal coming before me for final hearing on 08.11.2023 and upon perusing the material records, this Commission made the following:
ORDER
THIRU.S.KARUPPIAH, PRESIDING JUDICIAL MEMBER.
1. The Facts:
The short question arose in the appeal is whether the opposite parties 1 & 2 Amirtham bar entitled to sell a packaged alcohol for more than MRP rate?
2. The fact is the complainant on 08.01.2018 purchased British Empire Beer two bottles for Rs.420/- + Vat Rs.61/- totally Rs.481/-. But the MRP rate for the each bottle is only Rs.120/- So, the actual sale price of two bottles is only Rs.240/- instead the opposite parties sold the same for Rs.420/- which amounted to deficiency in service and unfair trade practice. So, claiming refund of Rs.241/- and Rs.95,000/- towards compensation, the complaint was filed.
3. The opposite party filed written version that as per Excise Rules they obtained FL3 license and as per the license a tourist who stayed in the hotel and other who permitted in the hotel entitled to purchase alcohol from their bar. The bar was Air-conditioned and attached with a Star Hotel with parking facility , as well the bar provided snacks along with alcohol, hence they are entitled to charge more.
4. The District Commission after receiving evidence and documents Ex.A1 to A3 finally allowed the complaint by awarding Rs.10,000/- along with order of refund of Rs.241/-.
5. Now the Points for consideration is,
1. Whether the Appeal has to be allowed or not?
6. Discussion on the Point:-
Aggrieved over the same the appeal has been preferred on the following Grounds : that the District Commission order is erroneous and the District Commission failed to consider that the Tamilnadu Prohibition Act empowered the owner of the bar to fix the rate of Alcohol as per the license given by authority and the MRP rate will not be applicable for the bars who obtained permission since higher license fees were paid by them.
7. As per the case of the Hotel/bar, FL 3 license issued by the excise authorities, and as per the terms of license, the Hotel/Bar can sell liquor only to the guests stayed in the hotel at least for 3 hours. The license issued to the petitioner, prohibits the petitioner from carrying out retail sale of alcohol to the customer for the purpose of consumption outside the premises. The customer is prohibited from even taking away the unfinished items from the hotel / restaurant as per the provisions of the license. The customer cannot enter the hotel of the petitioner and make a purchase of a bottle of beer for consumption at home. For the reasons already stated, by virtue of the terms of the FL3 license, it seems even the petitioners herein, are also prohibited from selling the goods in the packaged form to the customer. This condition would also take the transaction out of the purview of retail sale as defined under Rule 2(i) of the Legal Metrology (Packaged Commodities) Rules 2011.
8. Further it is useful to refer the Judgment of The Supreme Court of India in the case of State Of Punjab vs M/S. Associated Hotels Of India 1972 AIR 1131,
“The transaction in the present case is one and indivisible, namely, one of receiving a customer in the hotel to stay. The bill is not capable of being split up into one for residence and another for sale of meals. Amenities including meals, are part and parcel of the service which, in reality, is the transaction between the parties. Even if it was to be disintegrated the supply of meals during such stay does not constitute a separate contract of sale, since no intention on the part of the parties to sell and purchase the food stuffs supplied during meal time can be spelt out.
Similarly when the Hotels Association raised that they are legally entitled to sell Mineral water to their guests more tha
