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TMI Blog1975 (12) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... questions were referred, held that when a composite charge is made for residential accommodation and food by a hotelier, there is no sale of food to the customer within the contemplation of the Food Act. On the second question, its answer was that the word "store" used in s. 7 and s. 16 of the Act means storage for sale. The questions arose in these circumstances: M/s. Associated Hotels of India Ltd. (for short, Associated Hotels) runs Hotels, one of them is Oberoi Maidens Hotel, 7, Alipur Road, Delhi. Respondent 1 (L. N. Tandon) is the Manager of that Hotel, while Respondent 2 is the Managing Director of the Associated Hotels. According to the prosecution case, on July 25, 1966, Shri P. P. Sinha, a Food Inspector of the Municipal Corporation of Delhi, got from Respondent 1, the samples of ice-cream, milk, curd and butter for the purpose of analysis. The sealed samples were sent to the Public Analyst for examination and were found to be sub-standard and, as such, 'adulterated articles of food' within the purview of s. 2(i) (i). In the case of ice-cream; there was 1.6% deficiency in total solids and 2.9% deficie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in excess of prescribed limits of variability". Section 7 prohibits a person to "manufacture" for sale or "store", "sell", or "distribute", inter alia, any: "(i) adulterated food". Contravention of this prohibition is punishable as an offence under s. 16. The relevant part of the sections reads: "(1) If any person- (a) whether by himself or by any other person on his behalf imports into India or manufactures for sale, or stores, sells or distributes any articles of food- (i) which is adulterated or misbranded, or the sale of which is prohibited by the Food (Health) authority in the interest of public health...................... he shall in addition to the penalty to which he may be liable under the provisions of s. 6, be punishable with imprisonment for a term which shall not be less than six months but may extend to six years, and with fine which shall not be less than one thousand rupees :" Then, there is a Proviso to this sub-section which gives a discretion to the Court for any adequate and special reasons to be recorded, to award a sentence less than the minimum prescribed, only if the offence is under cl. (a) (i) and is with respect to an article adulterated under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of food is not intended for sale and is in the possession of a person who does not fulfil the character of a seller, conveyer, deliverer, consignee, manufacturer or storer for sale such as is referred in sub- ss. 1(a) and (2) of the section, the Food Inspector will not be competent under the law to take a sample, and on such sample being found adulterated, to validly launch prosecution thereon. In short, the expression "store" in s. 7 means "storing for sale" and consequently storing of an adulterated article of food for purposes other than for sale would not constitute an offence under s. 16(1) (a). The Full Bench of the High Court has thus rightly answered the second question. The stage is now set for considering the main question, whether food made available to a resident customer in a hotel by a hotelier against a consolidated charge for all the services and amenities and food amounts to a sale of an article of food for the purposes of the Food Act ? The High Court has considered this question entirely in accordance with the norms and tests applied in the context of Punjab General Sales Tax Act, 46 of 1948 (for short, the Sales-tax Act) by a Division Bench of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, and includes also an attempt to sell any such article." A comparative study of the above-quoted definitions would show that the connotation of "sale" for purposes of the Food Act is far wider than the meaning assigned to it in the Sales-tax Act. While under the Food Act "sale" would include a mere "offer for sale", "exposing for sale" or having in "possession for sale", under the Sales-tax Act, the transfer of property in the goods, except where it falls within the Explanation, is an essential feature of "sale". Further, the legislature has advisedly left the word "sale" occurring in the first part of the definition under the Food Act to be interpreted in its widest amplitude. According to the Oxford Dictionary "sale" means "action or an act of making over to another for a price", "the exchange of a commodity for money or other valuable consideration", "disposal of goods for money". It will be seen that the definition of 'sale' in s. 2(xiii) of the Food Act with which we are concerned, is wider even than its dictionary meaning. The object of assigning so extensive a meaning to the term 'sale' appears to be to bring within the ambit of the Food Act all commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the resident customer for a money consideration, it being immaterial whether such consideration was a distinct item or was an inseparable element of the consolidated charge made by the hotelier for providing residential accommodation, services, amenities and food? The mere fact that the property in the food article does not pass to the customer before he eats it, does not take it out of the definition of 'sale" under the Food Act. In the case of food actually consumed, the property does pass to the customer. In other cases, even when the resident customer does not eat the food offered to him by the hotelier, such an offer by itself, would be sufficient to constitute a "sale" of that article of food within the contemplation of s. 2(xiii) of the Food Act. Mr. Ashok Sen, relying on the observations of this Court in Associated Hotels' case (supra) contends that the true test to be applied even in a case under the Food Act, is; What was the primary object of the transaction and the intention of the parties while entering into it? It is maintained that the predominant character of the transaction in question was to provide a number of amenities and services to resident custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutes "sale" under the Food Act. It is true that in pursuance of such a transaction, the bill prepared by the hotelier is one and indivisible; it is not capable of being proximated or split into charges for food and charges for other amenities. But the fact remains that such a composite bill is prepared after taking into account the cost of the meals, also. The illustrations given by Mr. Sen are not apposite. Hotel business is very different from that of a Hospital or a Nursing Home, or College Hostel, or Passenger Airliner etc. Moreover, the question whether a particular transaction in the context of the Food Act constitutes a sale or not, is largely a question of fact depending on the circumstances of each case. It is therefore not proper to enunciate any hard and fast rule of universal application on the basis of purely hypothetical instances cited by Mr. Sen. For the foregoing reasons we would reverse the answer given by the High Court and hold that the supply or offer of food by a hotelier to a customer when a consolidated charge is made for residential accommodation and other amenities, including food, amounts to a 'sale' of an article of food for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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