Venkateshwara Hotel Violates Consumer Rights By Charging Above MRP Citing Supreme Court Ruling
On 2nd May 2023, I visited Venkateshwara Hotel, Lakdikapul for a cup of coffee. I also ordered a water bottle for which I was charged over MRP. Here is the proof.
The hotel charged an additional 10 Rs over the Maximum Retail Price (MRP) of the product purchased. When I asked about this, the hotel staff adamantly cited a Supreme Court ruling that supposedly allowed them to charge above the MRP.
This practice of charging above the MRP is a violation of consumer rights.
The Supreme Court ruling that the hotel cited only allows restaurants and hotels to charge more than the MRP for water bottles and other beverages, provided they have a clear label indicating that they are “not for retail sale.”
This label ensures that the bottles are not used for commercial or trade purposes and are only meant for personal consumption.
I reported that there was no such label on the product that they purchased, and the hotel did not inform them of the additional charge beforehand.
This lack of transparency is unacceptable and a clear violation of the consumer’s rights.
Under the Consumer Protection Rules, brands and businesses are not allowed to charge more than the MRP for any product.
Exceptions to this rule are allowed only under specific circumstances, as determined by the Supreme Court ruling.
Customers have the right to know the price they are paying for a product and should not be charged extra without their consent.
It is important for establishments to follow the rules and regulations set forth by the Legal Metrology Department and ensure transparency in pricing to protect the consumer’s rights.
However, the Supreme Court has allowed for certain exceptions to this rule, provided that certain conditions are met.
In 2017 and then in 2018, the Supreme Court ruled that restaurants and hotels are allowed to charge more than the MRP for water bottles and other beverages.
This is because these establishments provide a service, and pricing cannot be regulated by the Legal Metrology Act.
However, there is a clause that requires any restaurant or hotel that wishes to charge above the MRP for a product to have a clear label and inform the customer.
Earlier, pertaining to this case, Mr. Teja, a social activist from Hyderabad filed complaints against the restaurants in Hyderabad, stating that many restaurant owners attempt to circumvent the law by citing the Supreme Court ruling that allows them to sell water and aerated drinks above the MRP.
However, the ruling also specifies that in such cases, the bottle should clearly indicate that it is “not for retail sale” and cannot be used for commercial or trade purposes.
Here in this case, you can clearly see that there is neither any label nor any indication “not for retail sale” tag to inform customers. This is a Blatant Violation of the Supreme Court Ruling.
My attempts to educate them on SUPREME COURT ruling conditions went futile. Apart from this, the staff especially MR Ashok insisted that I can leave the hotel only after paying the bill of Rs 10 extra.
I have addressed the same on Twitter to the authorities tagging even KTR to pull attention towards this scam anticipating that they might have taken action.
To check, again on 5th May 2023, I went to have breakfast. To my astonishment, they again demanded to pay extra. This time openly ON CAMERA exhibiting his ignorance.
Why does Not This Restaurant face a penalty for violating Consumer Protection Rules by charging the above MRP?
In the video, Ashok is seen saying, he is having Government Order for charging extra.
Earlier 4 restaurants in Hyderabad, including ‘Pista House Restaurant’ in Nizampet, ‘Sangeetha A Lounge Restaurant & Bar’, ‘Chaitanya Bar & Family Restaurant’ in Kukatpally, and ‘Hotel Kuchipudi Palav Restaurant’ in Miyapur, have been booked by the Legal Metrology Department following a complaint by a local social activist.
The complaint alleges that the restaurants charged customers for water bottles beyond the maximum retail price (MRP) and also levied GST on the excess amount.
According to the complaint, Pista House Restaurant charged Rs. 40 for a 300 ml cold drink, which has an MRP of Rs. 25. Similarly, ‘Sangeetha A Lounge’ charged Rs. 30 for a soda bottle, which has an MRP of Rs. 12. Hotel Kuchipudi Palav Restaurant was found to be charging Rs. 35 for a 250 ml cold drink bottle, whose MRP was Rs. 25.
It should be noted that the Legal Metrology Department took action against these restaurants based on the complaint filed and booked them for violating consumer rights.
The Department has been cracking down on such violations to protect consumers and ensure that they are not overcharged for essential items.
Customers are advised to be aware of the MRP of products and report any instances of overcharging to the authorities.
In addition to exceeding the MRP, these restaurants also applied GST to the inflated price. The Legal Metrology Department has BOOKED these restaurants under Sections 12 (2) and 6 (1) of the Legal Metrology Act.
Earlier this year, in May, the Legal Metrology Department in Hyderabad had taken action against a restaurant for levying a service fee.
I expose this abuse of power on unaware citizens and betrayals of the public trust by such business establishments and request the authorities to take immediate action on this hotel.
- Restaurants that violate the Consumer Protection Rules by charging above the Maximum Retail Price (MRP) may now face penalties of up to Rs 25,000.
- If a restaurant commits a repeated offense, the penalty may be increased to Rs 50,000.
- While the Supreme Court has allowed for certain exceptions to the rule prohibiting businesses from charging above the MRP, specific conditions must be met for such exceptions to apply.
Interestingly, the government may soon abolish the practice of MRP altogether and allow retailers to determine the price of a product rather than the manufacturer. As more details become available, I will keep you updated.
RaviSingh – Sr Journalist
