CHARGING MORE THAN MRP BY STAR HOTELS NOT ILLEGAL

Once again Justice B P Ray of Kerala high court gave a ruling that Star hotels can charge a higher price for soft drinks and other beverages than the MRP (Maximum Retail Price) and that it was not illegal to charge in excess of the MRP. He further stated that since the customers also enjoy the ambience of such hotels, overpricing could be justified. 

Seeking a declaration by the court that the MRP was not applicable to beverages sold in star hotels, the Taj Kerala Hotels and Resorts Ltd filed a petition in the high court which 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 contended that the hotels were not selling just a product, but an experience, which also included the luxurious ambience. Senior counsel T Sanjay appearing for the Central government opposed the argument and submitted that rules on MRP were applicable to all those selling commodities, from street vendor to star hotels. 

Ruling in favor of the hotel group, Justice Ray said 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. 

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