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M/s. IMS Mercantiles Pvt. Ltd. Versus Union of India And Others

2015 (12) TMI 991 - DELHI HIGH COURT

Contravention of Rule 6 of the Packaged Commodities Rules - compoundable on payment of compounding fees of ₹ 25,000/- as prescribed under the Packaged Commodities Rules made by the Central Government or on payment of ₹ 2,500/- as prescribed under the State Rules? - Held that:- It is no doubt true that Schedule XI of the Delhi Legal Metrology (Regulation) Rules, 2011 includes the offence of non-compliance of declaration in respect of pre-packaged commodity by manufacturer or dealer un .....

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the compounding fees, whereas the impugned Rule 32(3) of the Packaged Commodities Rules provides for compounding amount. In fact, the upper limit of the compounding fees has been provided by Section 48 of the Act itself inasmuch as the proviso states that the compounding amount shall not in any case exceed the maximum amount of the fine which may be imposed under the Act for the offence so compounded.

Under Section 36 of the Act, the fine prescribed for the first offence is ₹ 25 .....

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oner, is purely imaginary and non-existent and appears to be result of misreading of the provisions. For the aforesaid reasons, the writ petition is devoid of any merit and the same is accordingly dismissed. - W.P.(C) 4784/2014 and CM No.9529/2014 (Stay) - Dated:- 11-12-2015 - G. Rohini, Chief Justice And Rajiv Sahai Endlaw, JJ. For the Petitioner : Mr. Bharat Gupta with Mr.Saurabh Mehta and Mr.Varun Tyagi, Advs For the Respondents : Mr. Sanjay Jain, ASG with Mr.Ajay Digpaul, Ms.Noor Anand Chawl .....

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t on payment of compounding fee of ₹ 25,000/-. The prayer in the writ petition is as follows: (i) Issue a writ, order or direction quashing sub-rule 3 of Rules 32 of the Legal Metrology (Packaged Commodities) Rules, 2011 in so far as it is inconsistent with the provisions of the Legal Metrology Act, 2009 and is ultra - vires the Act; (ii) Issue a writ, order or direction thereby clarifying that Rules issued by Respondent No.1 will be applicable to inter-state trade and commerce and those i .....

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one of the packets containing rechargeable LED flash lights did not bear the word Rs./ Rs. . In other words, the MRP shown on the package was not prefixed with symbol Rs./Rs. but it was merely shown MRP 299.00 . Accordingly an inspection report/memo dated 22.11.2013 was issued by the respondent No.3/Asst. Controller of Legal Metrology. On 05.12.2013, the petitioner made a representation stating that the omission of the word Rs./Rs. was only on account of a minor printing error and there was no .....

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mmodities) Rules, 2011. 3. In response to the said notice, the petitioner appeared before the respondent No.3 and sought for compounding on payment of ₹ 2,500/- in terms of Rule 25 of the Delhi Metrology (Enforcement) Rules, 2011. However, the respondent No.3 did not agree and insisted on payment of ₹ 25,000/- towards compounding fees. Hence, the present writ petition. 4. Before adverting to the contentions advanced on behalf of the parties, it is necessary for us to notice the relev .....

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se or possess for sale any pre-packaged commodity unless such package is in such standard quantities or number and bears thereon such declaration and particulars in such manner as may be prescribed. Under Section 36(1) of the Act whoever manufactures, packs, imports, sells, distributes, delivers or otherwise transfers, offers, exposes or possesses for sale which does not conform to the declarations on the packet as provided in the Act shall be punished with fine which may extend to ₹ 25,00 .....

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ernment of such sum as may be prescribed. 6. Section 52 of the Act empowers the Central Government to make Rules by notification for carrying out the provisions of the Act. Power has been conferred on the State Governments also under Section 53 of the Act to make rules after consultation with the Central Government to carry out the provisions of the Act. 7. In exercise of the power conferred under Section 52, the Central Government made the Rules called the Legal Metrology (Packaged Commodities) .....

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printed on the package in the manner given below; Maximum or Max. Retail price Rs......./ Rs....... inclusive of all taxes or in the form of MRP Rs......./ Rs....... incl., of all taxes after taking into account the fraction of less than fifty paise to be rounded off to the preceding rupee and fraction of above 50 paise and up to 95 paise to the rounded off to fifty paise; 8. Rule 32 of the Packaged Commodities Rules which provides for penalty for contravention of the Rules may also be reproduce .....

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ve been amended by inserting sub-Rule (3) to Rule 32 prescribing the sum of compounding amount for various contraventions. Sub-Rule (3) of Rule 32, as inserted by amendment dated 06.06.2013, reads as under:- (3) Sum of compounding offences - The sum of compounding offences committed under the said Act shall be as specified in the following Table, namely:- Sr. No. Offence Compounding amount (1) (2) (3) If the application for compounding is by retailers or wholesale dealers If the application for .....

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d to make Rules and in exercise of the power so conferred, the Government of NCT of Delhi made the Rules called the Delhi Legal Metrology (Enforcement) Rules, 2011 (hereinafter referred to as the State Rules ). Rule 25 of the State Rules provides that the fee for compounding of offences committed under the Act shall be as prescribed in Schedule XI. As per the said Schedule, the compounding fees for the offence under Section 18(1) of the Act shall be ₹ 2,500/-. 11. In the case on hand, the .....

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by both the Central Government and the Government of NCT of Delhi and there are specific provisions prescribing the compounding fees under both the sets of Rules. 12. The question that requires consideration is whether the contravention of Rule 6 of the Packaged Commodities Rules is compoundable on payment of compounding fees of ₹ 25,000/- as prescribed under the Packaged Commodities Rules made by the Central Government or on payment of ₹ 2,500/- as prescribed under the State Rules. .....

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s a case of intra-State commerce and, therefore, the State Rules alone are applicable. It is also contended that the Central Government has exceeded the rule making power conferred on it in having prescribed ₹ 25,000/- as compounding fees under sub-rule (3) of Rule 32 of the Packaged Commodities Rules since the same is in contravention of sub-section (3) of Section 52 of the Act which lays down that the penalty shall not exceed ₹ 5,000/-. Thus, it is contended that Rule 32(3) of the .....

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nt of the compounding fees of ₹ 25,000/- cannot be held to be illegal on any ground whatsoever. It is also contended that the compounding fees under Section 48 of the Act and the fine for breach under Section 52(3) of the Act are two distinct issues and the contention that there is conflict between the Act and Rules is without any basis. 15. We have heard the learned counsel for both the parties. Sections 18, 36 and 48 of the Act which are relevant for the purpose of the present case are a .....

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ity contained in the package in such form and manner as may be prescribed. 36. Penalty for selling, etc., of non-standard packages. - (1) Whoever manufactures, packs, imports, sells, distributes, delivers or otherwise transfers, offers, exposes or possesses for sale, or causes to be sold, distributed, delivered or otherwise transferred, offered, exposed for sale any pre-packaged commodity which does not conform to the declarations on the package as provided in this Act, shall be punished with fi .....

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escribed shall be punished with fine which shall not be less than ten thousand rupees but which may extend to fifty thousand rupees and for the second and subsequent offence, with fine which may extend to one lakh rupees or with imprisonment for a term which may extend to one year or with both. 48. Compounding of offences. - (1) Any offence punishable under section 25, sections 27 to 39, sections 45 to 47, or any rule made under sub-section (3) of section 52 may, either before or after the insti .....

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7, sections 45 to 47, and any rule made under sub-section (3) of section 52: Provided that such sum shall not, in any case, exceed the maximum amount of the fine, which may be imposed under this Act for the offence so compounded. (4) Nothing in sub-section (1) shall apply to person who commits the same or similar offence, within a period of three years from the date on which the first offence, committed by him, was compounded. Explanation. - For the purposes of this sub-section, any second or su .....

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the offence punishable under Section 36 is compoundable under Section 48 on payment of such sum as may be prescribed. It is also clear that the Director or Legal Metrology Officer as may be specifically authorized by him as well as the Controller or Legal Metrology Officer specifically authorized by him are competent under Section 48 to exercise the power of compounding the offence under Section 36. 17. In the case on hand, the inspection was conducted by the Assistant Controller. However, the .....

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be ₹ 25,000/-. 18. The alleged offence being contravention of the provisions of the Packaged Commodities Rules made by the Central Government, it appears to us that the respondents are justified in applying Rule 32(3) of the Packaged Commodities Rules for fixing the compounding fees. It may be added that the Controllers are appointed by the State Government under Section 14 of the Act for exercising the powers and discharging the duties conferred on them under the Act in relation to intra- .....

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Territory of Delhi in exercise of the powers conferred by Section 53(2) of the Act prescribed the procedure for verification of the weights and measures, licensing of manufacturer, repairers and dealer of weights and measures and the matters relating to offences and penalties for use of non-standard weight or measures. The said Rules do not contain any provision regarding declarations on pre-packaged commodities much less that penalty for sale of the pre-packaged commodity which does not conform .....

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turer or dealer under Section 18(1) of the Act. However, in the absence of any provision in the said Rules providing for such declaration on pre-packaged commodity and non-compliance thereof, the said Rules cannot be made applicable for compounding the offences of contravention of Packaged Commodities Rules, particularly after insertion of a specific provision for compounding under Rule 32(3) of the Packaged Commodities Rules. 21. The further contention of the petitioner is that Rule 32(3) of th .....

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