TMI Blog2002 (11) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... its retail dealer or other persons including manufacturer, packer and wholesale dealer from making any sale of any commodity in packaged form at the price exceeding the retail sale price thereof. 2. The first Petitioner is a trade union registered under Trade Unions Act, 1926. It has as its members the small retailers selling pre-packaged goods in Bombay. Petitioner No. 2 is an unregistered association which has as its members small retailers including the members of petitioner No. 1. Petitioner No. 3 is a small retail trader and a member of petitioner No. 1. He is inter alia engaged in retail selling of pre-packaged materials namely cigarettes, soaps, toiletry items, biscuits etc. According to the petitioners the retail traders such as petitioner No. 3, sell goods in pre-packaged form which are manufactured all over India. They are all small retail traders whose turnover is always very low and they earn their profits from the commission that they charge on the sales. 3. The petitioners have filed this petition in the representative capacity seeking leave under Order 1 Rule 8 of the Code of Civil Procedure on their behalf and on behalf of persons who have similar interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to define a retail sale price, in excess of which the retailer has no right to sell the commodity. According to petitioners the Act and the Rules framed thereunder do not regulate or control the manufacturers price of pre-packed commodities. The manufacturers have absolute discretion as to what price they should charge from the distributors, wholesalers or retailers. According to the petitioners, the distributors also do not maintain price lists of pre-packaged commodities nor is there any control maintained on them either under the Act or the Rules. They are also entitled to charge whatever price they want to charge from the retailers. The retailers on other hand, are prevented from selling the pre-packaged commodity for any price in excess of the retail price declared by the manufacturer in the printed form of the pre-packaged commodity in accordance with the provisions of the Act and the Rules. Therefore, in petitioners submission, the operation of the Act allows complete discretion to the manufacturers and wholesalers to determine the manufacturing or whole selling price as well as the retail price of the retailer and gives no discretion to the retailer to decide his selling p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reliance on the judgment of Karnataka High Court in a case of T.T. (P.) Ltd. v. Union of India AIR 1991 Kar. 79, and submitted that the definition of "retail sale price" in rule 2( r ) has substituted the definition of "sale price" under rule 2( s ), which has been omitted by GSR 511(E), dated 25-5-1990 in the Rules. The expression "sale price" was defined under deleted rule 2( s ) was under judicial scrutiny before Karnataka High Court in the aforesaid case when it was held to be valid as it falls within Entries 42 and 50 of List I of Schedule VII of the Constitution. The definition of "sale price" in rule 2( s ) was held to be reasonable and within the rule making power in the aforesaid judgment of the Karnataka High Court. It was further submitted on behalf of the respondents that the Act was enacted to safeguard and protect the interest of purchaser and consumer and not for the benefit of retailer. The financial loss, if any, is being caused to the retailer, could be taken care of by the contract and/or understanding between the manufacturers and retailers. 9. The Act was enacted to establish the Standards of Weights and Measures, to regulate inter-State trade or comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determine the purpose, intention and object of the Legislation. It is also well-settled that though the SOR is one of the vital keys to the interpretation of the provisions of the Act, the intention of the Legislature is not necessarily to be gathered from the SOR only but to be gathered from the provisions of the Act. Keeping in view the SOR and the aforestated well-settled propositions of law, it would be advantageous at this stage to refer to the relevant provisions of the Act and the Rules for better appreciation of the submissions advanced by the learned counsel for the parties before us. 10. The Act is divided into eight parts. However, in the present petition we are concerned with the provisions, in part I, part IV and part VIII of the Act. Part I of the Act provides definitions which includes expression "sell" which 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 transfer of any weight, measure or other goods on the higher purchase scheme or any other system of payment by instalments. Part IV of the Act is further divided into five chapters. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include any expression which tends to qualify such weight, measure or number: Provided that the Central Government may, by rules, specify the commodities, the weight or measure of which is likely to increase or decrease beyond the prescribed tolerance limits by reason of climatic variations; and it shall be lawful for the manufacturer or packer of the commodity so specified to qualify the statement as to the net content of such commodity by the use of the words "when packed". Explanation The words "when packed" shall not be used in any case except a case to which the proviso to sub-section (4) applies. (5) Where the Central Government has reason to believe that there is undue proliferation of weight, measure or number in which any commodity is, or reasonably comparable commodities are being packed for sale, distribution or delivery and such undue proliferation impairs in the opinion of that Government, the reasonable ability of the consumer to make a comparative assessment of the prices after considering the net quantity or number of such commodity, that Government may direct the manufacturers and also the packers or distributors to sell, distribute or deliver such commodit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-section (2) of section 83 specifically empowers the State Government to make rules in the matters of the manner of declaration of the contents of a package and specification of the unit of weight, measure or number in accordance with which the retail price shall be declared on the package. 11. In exercise of powers conferred by section 83 of the Act, the Central Government has framed the Rules which are divided into six chapters. However, in the instant writ petition we are concerned with Chapter I which provides definitions of different expressions used in the Rules of the Act and Chapter II which deals with the provisions applicable to the packages intended for the retail sale. The petitioners have challenged the validity of rule 2( r ) and rule 23 in Chapters I and II of the Rules. Clause ( r ) defines "retail sale price" which read thus : ( r )"retail sale price" means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer and where such price is mentioned on the package, there shall be printed on the packages the words "Maximum [or Max] retail price ...... inclusive of all taxes. Explanation For the purpose of this cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 9 provides the manner in which the declaration shall be made on package under the Rules. Rule 23 deals with the provisions relating to the retail or wholesale dealers. Rule 23, validity of which is under challenge in the instant writ petition, read thus : "23. Provisions relating to wholesale dealer and retail dealers (1) No wholesale dealer or retail dealer shall sell, distribute, deliver, display or store for sale any commodity in the packaged form unless the package complies with, in all respects, the provisions of the Act and these rules. (2) No retail dealer or other person including manufacturer, packer and wholesale dealer, shall make any sale of any commodity in packaged form at a price exceeding the retail sale price thereof. Explanation For the removal of doubts, it is hereby declared that a sale, distribution or delivery by a wholesale dealer to a retail dealer or other person is a retail sale within the meaning of this sub-rule. (3) Where a package intended for sale in which a commodity has been pre-packed is opened and the commodity contained therein is sold to one or more persons, the price to be charged from the purchaser shall bear the same proport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th in which the commodity was pre-packed. (5) Nothing in sub-rule (4) shall apply to a package which is not required, under these rules to indicate the month and the year in which it was pre-packed. (6) No retail dealer or other person shall obliterate, smudge or alter the retail sale price, indicated by the manufacturer or the packer, as the case may be, on the package or on the label affixed thereto." Rule 23 imposes restrictions not only on the retail dealers but also on other person including manufacturer, packer and wholesale dealer from making any sale of any commodity in packaged form at a price not exceeding the "retail sale price" thereof. 13. Sections 39 and 83 of the Act, though use expressions "retail price", "unit sale price", "retail unit sale price" and "retail sale price", the Act does not define them. However, in exercise of the powers conferred under section 83 of the Act, the Central Government made the Rules, which define the expressions namely "retail sale", "retail sale price" and "unit sale price". The "retail sale" is defined under clause ( q ) of rule 2 which provides that the retail sale in relation to a commodity, means the sale, distribution or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less such package bears thereon or on a label securely attached thereto a definite, plain and conspicuous declaration made in the prescribed manner, of the sale price of the package. Sub-section 6 of section 39 specifically provides that whenever the "retail price" of a commodity in packaged form to which Chapter IV applies is stated in any advertisement, there shall be included in the advertisement, a conspicuous declaration as to the net quantity or number of the commodity contained in the package and the "retail unit sale price" thereof. The stress in this provision is also upon the consumer and not upon the person manufacturing or selling the package. 15. Rule 23 of the Rules would show that no wholesale dealer or retail dealer shall sell, distribute, deliver, display or store for sale any commodity in the packaged form unless the package complies with, in all respects, the provisions of the Act and the Rules. Similarly no retail dealer or other person including manufacturer, packer and wholesale dealer shall make any sale of any commodity in packaged form at a price exceeding the "retail sale price" thereof. It further provides that where a package intended for retail sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st other rights, is to be fully informed of the product and also to choose from a sufficient number of alternatives to ensure the objective price and quality and in that regard if a rule is made as to the manner of declaration on the package, the maximum sale price along with the contents of package and specifications of the unit, weight, measure or number it cannot be said that it is beyond the scope of the Act. We are of the considered view that in so far as the apprehension expressed by the petitioners, in respect of the financial loss likely to cause them, is concerned that should be taken care of by the contract/understanding between the manufacturers/packers and the retail dealers. 17. Before we conclude we make reference to the judgment of the Karnataka High Court in a case of T.T. (P.) Ltd. ( supra ) relied upon by learned counsel for the respondents. In this judgment while dealing with the issue as to whether the definition of "sale price" in rule 2( s ) is ultra vires the provisions of the Act and violative and unreasonable restriction on the fundamental rights under Article 19(1)( g ) of the Constitution, in paragraphs 10 and 11 held thus : "10. The concept of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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