Judgment:
R.M. Savant, J.
1. A short question arises for consideration in the above Petition, namely, whether the commodity, which is given free or extra along with the commodity packed in the standard package, infringes Rule-5 and, Schedule-III of the Standards of Weights & Measures (Packaged Commodities) Rules, 1977.
2. The Petitioner is a company registered under the provisions of the Indian Companies Act, 1913, as then applicable. The Petitioner carries on business inter alia of the manufacture, production, distribution and sale of biscuits and daily products. The Petitioner manufactures biscuits which are popularly known as '50-50 Biscuits' . The said biscuits, at the relevant time, were sold in the standard pack size of 75 grams for a Maximum Retail Price of Rs. 6.50 in addition to the said standard pack size of 75 grams, the Petitioner was giving free cost to the buyers 20% extra of the said 50-50 biscuits i.e. 15 grams The total weight of the biscuits packed therefore was 90 grams.
3. On or about 21st July 2000, the Inspector of Legal Metrology, Chembur Division, inspected the premises of one M/s.Rajgor Brothers, a dealter of the Petitioner located at 15, Poornima Building, M G Road, Ghatkopar (East), Mumbai-400 077. During the inspection 605 packages of ' 50-50 Britannia Biscuits. were seized as according to the said Inspector, the packages were not packed as per Schedule III of the Standards of Weights and Measures Act, 1976 read with Rule 23(1), 4 and 5 of Standards of Weights and Measures (Packaged Commodities) Rule 1977 [hereinafter referred to as 'the said Act and the said Rule' ].
4. Similarly on 11th July 2000, the Inspector of Legal Metrology, Chembur Division, inspected the premises of one M/s.Parvati General Stores, a dealer located at Shop No. 1, Kamraj Marg, Chembur, Bombay 400 071. During the inspection 4 packages of 50-50 Britannia biscuits were seized as according to the said Inspector, the packages were not packed as per the Third Schedule of the said Rule.
5. Similarly in the case of M/s.Milan Stores, a dealer, located at Khalrew Road, Sakinaka, Bombay 400 072 during the inspection on 10th July 2000 by the Inspector of Legal Metrology 'A' Division, two packages of 50-50 Britannia biscuits were seized on the same ground of violation of Rule 5 read with IIIrd Schedule.
6. A show cause notice was, therefore, issued to the Petitioner by the respective Inspectors in respect of the alleged violation of the said Act and the said Rule. The Petitioner by separate letters dated 20th August 2000, 10th August 2000 and 21st August 2000 replied to the said show cause notices inter alia pointing out that the Petitioner has not contravened any of the provisions as pointed out in the said show cause notice issued by the department. The letters addressed to the 2nd Respondent in respect of all the three show cause notices were in identical terms. It appears that in response to the Petitioner's reply, the Inspector by his letter dated 4th September 2000, reiterated the stand of the department that the said packages of the Petitioner's 50-50 biscuits which had been seized, had been packed in contravention of Rule 5 r/w IIIrd Schedule. It was stated on behalf of the department in the said letter that if any additional quantity was to be given free or extra to the consumer, the Petitioner was at liberty to pack the same separately and even free or extra quantities would have to conform to the quantities prescribed under the said Rules and the Schedule. It was contended that by adding the commodity, which was to be given free or extra, the total weight of the package becomes 90 grams which was in clear violation of Rule 5 and the IIIrd Schedule.
7. On receipt of the said letter, the Petitioner' s representative had a meeting with the Deputy Controller, Legal Metrology, Mumbai on 16th September 2000 wherein the Petitioner's representative reiterated the stand of the Petitioner. The General Manager of the Petitioner, by his letter dated 27th September 2000 addressed to the office of the Asst. Controller of Legal Metrology, recorded as to what had transpired in the meeting of 16th September 2000 and reiterated that merely adding 20% of the commodity which was given free and declaring the same clearly on the pack did not in any way violate the Rules.
8. Similar letter, which was dated 11th October 2000, was forwarded to the Government of India, Ministry of Consumer Affairs and Public Distribution, Department of Consumer Affairs. In response to the said letter the Deputy Director, Legal Metrology, Government of India, contended that it was the considered view of the department that the commodities listed under the Third Schedule of the said Rules should only be packed in accordance with the specified quantity prescribed under the Rules. The said letter further went on to state that' The practice of packing additional quantity, over and above the specified quantity in respect of commodities listed under the Third Schedule violates the provisions of the Rules. It was therefore advised that the specified quantities prescribed under Third Schedule may be scrupulously complied with.
9. It is the case of the Petitioner that despite the several representation made by the Petitioner to the State Authorities as well as the Central Government, the Inspector of Legal Metrology, Chembur, invoked the provisions of Section 39 of the said Act r/w Rule 5 and IIIrd Schedule and filed a complaint under the said provisions in the Court of the learned Metropolitan Magistrate, 31st Court, Vikhroli, Mumbai. It is the case of the Petitioner that though the said complaint was filed of which intimation was given to the Petitioner by the Inspector of Legal Metrology by his letter dated 18th November 2000, till the date of filing of the above Petition, no process was issued by the learned Magistrate and neither the Petitioner nor its directors, officers and servants was summoned to attend the Court.
10. It appears that pursuant to the correspondence which ensued between the Petitioner and Deputy Director, Letal Metrology, Krishi Bhavan, New Delhi, by letter dated 30th January 2001 the Deputy Director, Legal Metrology, New Delhi, which th was in reply to the Petitioner's letter dated 15 January 2001 inter alia recorded that in consonance with the said Rules the net quantity contained in the package in question may be declared as 100 grams. It is the case of the Petitioner that to avoid further action being taken against the Petitioner, the Petitioner discontinued the practice of giving 20% free but started marketing their 50-50 biscuits in the packet consisting of 75 grams with additional 25 grams free so as to make total weight of the package to 100 grams which is one of the standard weights mentioned in the III Schedule. However, apprehending further action being taken in respect of the packages wherein 20% has been given free along with 75 grams, the Petitioner has filed the instant Petition challenging the constitutional validity of the Rule 5 3rd r/w Schedule and also challenging the impugned notices dated 10th August 2000, 20th August 2000 and the letter dated 28th November 2000 as the same being illegal, altra-vires, unconstitutional and void.
11. We have heard the learned Counsel for the Petitioner Shri Pooniwalla, the learned Counsel Shri Nair for the Respondent Nos. 2 3 and 4; and the learned Counsel for the Respondent No. 1 Union of India Shri Y S Bhate.
12. Shri Pooniwalla the learned Counsel appearing for the Petitioner principally contended that looking to the objects of the said Standards of Weights and Measures Act, 1976, the provisions of the said Act could not be applicable to a commodity which is given free of cost. He relied upon the provisions of the said Act and especially Sections 2(b), 2(c) and 2(v), Section 39, as also Rule 5 and contended that the said provisions make it explicitly clear that the said Act and the Rule are applicable to pre- packed commodities which are sold for a price. Shri Pooniwalla further submitted that looking to the objects of the said Act, the Petitioner, in packing the commodity which is given free of cost along with the quantity which is given for a price, has not committed any violation of the said Act and the Rules. He further submitted that in fact the quantity given free of cost enures to the benefit of the consumer and thereby the safe-guards provided in the said Act are not violated in any manner. The learned Counsel for the Petitioner also submitted that if the said Rules are sought to be interpreted in the manner as is sought to be done by the authorities by applying them to the commodity which is given free of cost, the said Rules would be violative of Article 14 of the Constitution of India. The learned Counsel for the Petitioner submitted that the decision of the Petitioner to give certain amount free of cost along with the standard quantity is a marketing strategy adopted by the Petitioner so as to increase its sales and market coverage in respect of the biscuits and, therefore, if the Rules are to be applied as is sought to be done by the authorities to the quantity which is given free of cost, the said Rules would also be in violative of Article 19 of the Constitution of India as the right of the Petitioner to do business in the manner it deems fit would be affected. The learned Counsel for the Petitioner further submitted that in terms of Rule 5 specific commodities have to be packed only in the standard package mentioned in the Third Schedule. In so far as biscuits are concerned, the standard packages are mentioned in the Third Schedule. The learned Counsel for the Petitioner further submitted that if the Rule is sought to be interpreted in the manner as is sought to be done by the authorities whereby something which is given free is held to be in violation of the said Rule, it would result in absurd consequences and would also not act in the interest of the consumers. He further submitted that though reasonable restriction can be placed on the right to carry on business, in the instant case, if the Rule is sought to be interpreted in the manner as is sought to be done by the authorities, it cannot be said that the same is a reasonable restriction as the same amounts to interfering with the freedom to do business as envisaged under Article 19(1)(g) of the Constitution of India.
13. The learned Counsel for the Petitioner further submitted that if by the Rules mentioned, the provisions of the said Act are sought to be applied to a commodity which is given free of cost, then the said rules can be said to be in violation of the said Act. The Rules being in the nature of subordinate legislation, they cannot transgress the provisions of the said Act. The learned Counsel for the Petitioner in support of his said submission relied upon the judgment of the Apex Court in the case of Indian Express Newspapers v. Union of India reported in : (1985) 1 SCC 641. In his submission the learned counsel for the Petitioner laid much emphasis on Paragraphs 75 and 79 and, therefore, they are reproduced herein under :
75. A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent Legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary. In England, the Judges would say ' Parliament never intended authority to make such rules. They are unreasonable and ultra vires'. The present position of law bearing on the above point is stated by Diplock, L.J. In Mixnam's Properties Ltd. v. Chertsey Urban District Council thus:
The various special grounds on which subordinate legislation has sometimes been said to be void... can, I think, today be properly regarded as being particular applications of the general rule that subordinate legislation, to be valid, must be shown to be within the powers conferred by the statute. Thus, the kind of unreasonableness which invalidates a bye-law is not the antonym of 'reasonableness' in the sense in which that expression is used in the common law, but such manifest arbitrariness, injustice or partiality that a court would say : ' Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires' ... if the courts can declare subordinate legislation to be invalid for 'uncertainty' as distinct from unenforceable... this must be because Parliament is to be presumed not to have intended to authorise the subordinate legislative authority to make changes in the existing law which are uncertain. Para 79: We do not, therefore, find much substance in the contention that the courts cannot at all exercise judicial control over the impugned notifications. In cases where the power vested in the Government is a power which has got to be exercised in the public interest, as it happens to be here, the Court may require the Government to exercise that power in a reasonable way in accordance with the spirit of the Constitution. The fact that a notification issued under Section 25(1) of the Customs Act, 1962 is required to be laid before Parliament under Section 159 thereof does not make any substantial difference as regards the jurisdiction of the Court to pronounce on its validity..
14. The learned Counsel for the Petitioner also relied upon the judgment of the Apex Court in the case of Bannari Amman Sugars Ltd v. Commercial Tax Officer and Ors. reported in : (2005) 1 SCC 625 in support of his submission that the action of the Respondents in applying the said rules to the commodity which is given free of cost does not satisfy the test of reasonable restriction. The learned Counsel for the Petitioner has relied upon para 17 of the said Judgment in support of his said submission. The said para 17 is reproduced herein under:
Para 17 :-Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved, the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant t6ime enter into the judicial verdict, the reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country.
15. The learned Counsel for the Petitioner submitted that the Petitioner' s challenge to the said Rule 5 and Schedule is an alternative challenge in the event the Petitioner's contention that the action of the Petitioner in packing the quantity which is given free of cost with the quantity which is sold for a price does not amount to violation of the said Act and the Rule, is not accepted by this Court. Shri Pooniwalla, the learned Counsel for the Petitioner, lastly submitted that the action of the Respondents therefore requires to be quashed and set aside and the Petition is required to be allowed.
16. On behalf of the Respondent Nos. 2, 3 and 4, the learned Counsel appearing for the said Respondents Shri Nair submitted that the said Act has been enacted towards the object of the consumers. protection. In support of the said submission, he relied upon the Judgment of the Apex Court in the case of India Photographic Co. Ltd v. H D Shourie reported in : AIR 1999 SC 2453. The relevant paras of the said Judgment would be adverted to in the latter part of this judgment.
17. Relying upon the said Judgment, Shri Nair, the learned Counsel appearing for the Respondent Nos. 2, 3 and 4 submitted that the said Act having been enacted for the consumers protection there would have to be a strict compliance with the provisions of the said Act and especially Rule 5 and the IIIrd Schedule to the said Act. He further submitted that the object in enacting the said Schedule under the said Rule 5 and specifying the commodities therein to be packed and sold in standard packages was with a view to protect the consumers interest as the consumer would know the quantity which he is buying and at what price. The learned Counsel for the said Respondents submitted that if the practice followed by the Petitioner is allowed to continue and if the Petitioner is allowed to pack the commodity which is allegedly given free along with the quantity which is mentioned in the said Schedule in a given case it may amount to the consumer being taken for a ride. He further submitted that in the instant case the Petitioner has not clarified as to whether for the same price of 75 grams of biscuits, whether it is giving 15 grams extra. The learned Counsel for the said Respondents submitted that there is no material placed by the Petitioner on record to show that the price for 75 grams earlier was Rs. 6.50 and for the same price they are giving 15 grams free of charge. He also submitted that if there is no strict compliance of the Rule it may be possible that a manufacturer with ingenious methods would breach the Rule and would take the consumer for a ride. He relied upon the provisions of the said Act viz Section 2(f), Sections 21, 29, 39, Rule 5 and Rule 29. The learned Counsel for the Respondent Nos. 2, 3 and 4 submitted that if the Petitioner is desirous of giving something free to the consumer, the Petitioner need not pack it along with the standard quantity mentioned in the Schedule but can pack it separately so that there is no violation of the said Rule and the consumer is aware of the quantity for which he is paying and the quantity which he is getting free of cost. He submitted that there is nothing arbitrary in the said Act and Rule for the same to be violative of Article 14 of the Constitution of India, as the object of the said Rule is consumer protection. The learned Counsel for the said Respondents further submitted that right to carry on trade and business is also not affected in any manner inasmuch as the Petitioner would be entitled to pack the quantity which is given free in a separate package and, therefore, the said Rule cannot be said to be in violation of Article 19 of the Constitution of India.
The learned Counsel appearing for the Respondent No. 1 adopted the submissions of the learned Counsel for the Respondent Nos. 2 to 4 and thereby supported the case of the said Respondents.
18. We have heard the submissions of the learned counsel for the Petitioner and the Respondents. It would be relevant, at this stage, to quote Para-4 of the Judgment of the Apex Court in the case of India Photographic Co. Ltd. v. H D Shourie reported in : AIR 1999 SC 2453. The Apex Court in the said Judgment, whilst considering the declaration to be made in terms of Rule-6 of the Act on pre-packed commodity has observed in Para-4 as under:
The Consumer Protection Act, 1986 has been enacted to provides for better protection of the interests of the consumers by making provisions for the establishment of consumer councils, other authorities for the settlement of consumer disputes and for matter connected therewith. The Act was enacted as a result of wide spread consumer protection movement. On the basis of the report of the Secretary General on Consumer Protect6ion dated 27th May 1983, the United Nations Economic and Social Council recommended that the World Governments should develop, strengthen and implement a coherent consumer protection policy taking into consideration the guidelines set out therein. Each Government was obliged to set its own priorities for the protection of consumers in accordance with the economic and social conditions of the country keeping in view the needs of its people and bearing in mind the costs and beneft6 of the proposed legislation Government were to further provide adequate infrastructure including the bodies as well as financial facilities to develop, implement and monitor consumer protection policies. The introduction of new products in the developing countries was to be assessed in relation to the local conditions having regard to the existing production, distribution and consumption patterns of the country or region concerned. The various enactments such as the Contract Act, the Standards of Weights and Measures Act, the Motor Vehicles Act, the Monopolies and Restrictive Trade Practices Act, Food Adulteration Act etc were found to be inadequate inn providing the relief to the consumers. In discharge of the internation obligations and to protect the interest of the consumer in the country, the Consumer Protection Act, 1986 was enacted (hereinafter called `the 1986 Act' ). The reference to the consumer movement and the international obligations for protection of the rights of the consumer, provision has been made therein with the object of interpreting the relevant law in a rational manner and for achieving the objective set forth in the Act. Rational approach and not a technical approach is the mandate of law....
The Apex Court has laid down, whilst interpreting the provisions of the said Act, that the same would have to be done in a rational manner and for achieving object set-forth in the said Act.
19. In the context of the issue raised in the above Petition, it would also be relevant to refer to certain provisions of the said Act. Section 2(b) defines `Commodity' as follows:
2(b):' commodity in package form. means commodity packaged, whether in any bottle, tin, wrapper or otherwise, in units suitable for sale, whether wholesale or retail';
Section 2(v) defines terms 'sale' under the said Act as follows:
2(v):`sale' with its grammatical variations and cognate expressions, means transfer of property in any weight, measure or other goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of any weight, measure or other goods on the hire-purchase system or any other system of payment by instalments, but does not include a mortgage or hypothecation of, or a charge or pledge on, such weight, measure or other goods....Section 6 sets out what is Base unit of mass which is as under:
Section 6:-Base unit of mass--(1) The base unit of mass shall be the kilogram.
(2) The `kilogram' is the unit of mass, it is equal to the mass of the international prototype of the kilogram. Section 21 prohibits the use of non-standard weight or measure and is as under:
Section 21:-Use of non-standard weight or measure prohibited ' No weight, measure or numeral, other than the standard weight, measure or numeral shall be used as a standard weight, measure or numeral.Section 39 mandates declaration of the quantities and origin of commodities in packed form and Section 39(1)(ii) reads thus:
39(1)(ii) the net quantity, in terms of the standard unit of weight or measure, of the commodity in the package....
Rule-5 :-Specific commodities to be packed and sole only in standard packages--On and from the commencement of these rules, no person shall pre-pack or cause or permit to be pre-packed, any commodity for sale, distribution or delivery except in such standard quantities as are specified in relation to that commodity in the Third Schedule..
THE THIRD SCHEDULE
[See Rule 5]
Commodities to be packed in specified quantities The following commodities shall be packed in such quantities by weight, measure or number as are specified in the corresponding entries against them.Sr. No. Commodities Quantities in which to be packed1 --- -------2 -- ---3 Biscuits 25g, 50g,75g,100g,200g, 300g andthereafter in multiples of 100g upto 1 kg.
20. Reading of the aforesaid provisions no doubt make it clear that the said provisions are applicable only to a commodity which is sold for a price. However, Rule 5 mandates that specified commodities are to be packed and sold only in the standard package and the said standard quantities are specified in relation to a particular commodity in the IIIrd Schedule to the said Act. In so far as biscuits are concerned, Schedule inter-alia sets out the standard quantity in which the said biscuits can be packed. Considering the object of the said Act viz. Consumers protection, it is obligatory on the part of the manufacturer/distributor to sell the commodity in the standard package mentioned in the Third Schedule, merely because the manufacturer/distributor wants to give 15% or 20% of the commodity free of cost it would not be open for him to pack it with the standard quantity commodity which is being sold for a price. Since the object of the Act is the consumers protection, the said Rules and the Third Schedule would have to be strictly adhered to. If the said Rules and the Third Schedule are not strictly adhered to, it is possible that in a given case, the consumers may be taken for a ride in terms of the quantity or price at which the commodity is being sold. The contention of the learned Counsel for the Petitioner that the provisions of the Act and Rule cannot be invoked in respect of the commodity which is given free of cost, therefore, cannot be accepted. If the manufacturer or distributor is interested in giving something free of cost, it would be open for such manufacturer or distributor to pack the said quantity in a separate package along with standard package or pack it in a standard quantity package. We therefore find merit in the submission of the learned Counsel for the Respondents that the Rules would have to be strictly adhered to. We do not find anything arbitrary in the said Rule-5. The said Rule in fact ensures that the consumer stands to get for whatever he has paid for. Rule-5 mandating that the commodities are to be pre-packed in standard packages, in our view, has nexus with the object sought to be achieved by the said Act, namely the protection of the interest of the consumer.
21. In so far as challenge of the Petitioner to the said Rule-5 and the Third Schedule on the ground of being arbitrary and hence violative of Article 14 is concerned, we do not find any merit in the said submission. The Rule postulates that the commodity in question has to be pre-packed in a standard package mentioned in the Third Schedule. It does not prohibit the manufacturer or distributor to pack the commodity which is given free of cost in a separate package or the commodity which is given free of cost along with the commodity of standard quantity results in a package of standard quantity mentioned in the Schedule, and therefore, in our view, it cannot be said that the said rule is arbitrary and violative of Article 14 of the Constitution of India.
22. In so far as challenge of the Petitioner on the ground of violation of Article 19(1)(g) is concerned, it is well settled that reasonable restrictions can be placed by the Government on the right to do business. Considering the object of the said Act the legislature in its wisdom has mandated certain commodities to be pre-packed in a standard package. However, as stated herein-above there is no impediment on a manufacturer or distributor to prepack the commodity which he intends to give free of cost in a separate package or pack it in a package of a standard quantity, mentioned in the Schedule The requirement to pack particular commodity in a standard package, in our view, does not, in any manner, violate Article 19(1)(g) of the Constitution of India. We therefore do not find any merit in the said submission of the learned Counsel for the Petitioner.
23. In so far as the submission of the learned Counsel for the Petitioner that only certain commodities have been covered by the said Schedule which have to be packed in a standard package whereas certain commodities have been left out. It is not for this Court to determine as to who should be brought in the legislative sweep. The legislature in its wisdom has sought to regulate the sale of certain commodities by including them in the Schedule to the said Act. We therefore do not find any merit in the said submission of the learned Counsel for the Petitioner.
24. From the averments made in the above Petition it is clear that after the complaints were filed against the Petitioner in the Court of the Metropolitan Magistrate, Mumbai invoking the provisions of the said Act, the Petitioner has started the practice of pre-packing the commodity given free of cost along with the standard quantity commodity so as to make the package of one of the standard quantities mentioned in the Third Schedule. Judicial notice can also be taken of the fact that various other companies or manufacturers, who are coming out with such scheme of giving certain quantity of commodity free of cost are either packing the said commodity separately or packing it in a standard quantity package. Though we have come to a conclusion that the challenges raised by the Petitioner have no merits, however, in so far as the prosecution launched against the Petitioner is concerned, in view of the fact that sufficient time has now elapsed and since no process has been issued and also in view of the fact that the Petitioner has discontinued the said practice, We are of the view that the authorities should take into consideration whether the prosecution launched against the Petitioner should be proceeded with in the light of the aforesaid facts. In our view, Rule-5 does not transgress the provisions of the said Act and in fact the said rule only aids the implementation of the said Act and regulation of the sale of the commodity in question. In so far as issue of reasonable restriction is concerned, as held herein above the need to pre-pack the commodity in a specified standard quantity can at the highest be held to be a reasonable restriction imposed, considering the object sought to be achieved by the said Act.
25. With the aforesaid observations, we dismiss the above Petition, resultantly, Rule is discharged but with no order as to costs.
At this stage, the learned Counsel for the Petitioner applies for continuation of the Interim order which is operating in this Petition since 10th April 2001. Considering the facts and circumstances of the case, though the Petition is dismissed and the rule is discharged, the interim relief granted earlier is continued for a further period of four weeks from date.