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2008 (4) TMI 298

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..... K. T. Sankaran, J.]. - This batch of Writ Appeals and Writ Petitions are disposed of by a common judgment since common questions relating to interpretation of the provisions of the Standards of Weights and Measures Act, 1976 (hereinafter referred to as "the Standards Act"), the Standards of Weights and Measures (Enforcement) Act, 1985 (hereinafter referred to as "the Enforcement Act") and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (hereinafter referred to as "the Rules") are involved in these cases. 2. W. A. Nos. 218 of 2003 and 1098 of 2003 arise out of O.P.No.16488 of 1998. The Original Petition was filed by Godrej/GE Appliances Limited, first respondent in the Writ Appeals. These Writ Appeals are being dealt with at first so that the decision herein can be followed, to the extent possible, in other cases. 3. O. P. No.16488 of 1998 was filed for the following reliefs: "(a) for an order and declaration of this Hon'ble Court that the provisions of Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and the Standards of Weights and Measures (Enforcement) Act, 1985 do not app .....

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..... an order and the product would be supplied to him. It was contended that the products manufactured by the petitioner do not come within the ambit of the aforesaid Rules of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The learned Single Judge allowed the Original Petition. It was held thus: "By reason of Standards of Weights and Measures (Enforcement) Act 1985, the former is made applicable for intra State trade as well. Therefore the provisions therein are applicable only in respect of the trade or commerce by weight, measure or number. A stereo set or a refrigerator is not sold in weight or by measure or by number. It will be sold only in single number. There is no case before me by the respondents that such equipments or devices are sold in packets containing more than one. ...... As already mentioned above, these equipments are sold, with freedom for the customer to inspect and satisfy regarding its appearance and functioning. Therefore it cannot be taken that it is a commodity sold in package. Nobody is purchasing equipments like refrigerator or devices like Television sets, stereo sets etc., in packed form. Any purchaser will first get satisfie .....

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..... weight, measure or number in the course of inter-State trade or commerce; (c) every service which is rendered by weight, measure or number in relation to, or in the course of, inter-State trade or commerce." Section 39 of the Standards Act provides for declaration of quantities and origin of commodities in packaged form. Sub-sections (1) to (3) of Section 39 read as follows: "39. Quantities and origin of commodities in packaged form to be declared:- (1) No person shall, - (a) make, manufacture, pack, sell, or cause to be packed or sold; or (b) distribute, deliver, or cause to be distributed or delivered; or (c) offer, expose or possess for sale, any commodity in packaged form to which this Part applies unless such package bears thereon or on a label securely attached thereto a definite, plain and conspicuous declaration, made in the prescribed manner, of - (i) the identity of the commodity in the package; (ii) the net quantity, in terms of the standard unit of weight or measure, of the commodity in the package; (iii) where the commodity is packaged or sold by number, the accurate number of the commodity contained in the package; (iv) the unit sale price of .....

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..... . Explanation II:- Where a commodity consists of a number of components and these components are packed in one, two or more units for sale as a single commodity, such commodity shall be deemed for the purpose of these rules, to be a pre-packed commodity;" Rule 2(r) defines "retail sale price" as follows: "(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 prices ... inclusive of all taxes or in the form MRP Rs.... inclusive of all taxes. Explanation:- For the purpose of the clause "maximum price" in relation to any commodity in packaged form shall include all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be;" Chapter II of the Rules relates to "Provisions applicable to packages intended for retail sale". Rule 3 provides that the provisions of Chapter II shall apply to packages intended for retail sale and the expression "package", wherever .....

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..... 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. (4) Where, after any commodity has been pre-packed, for sale, any tax payable in relation to such commodity is revised, the retail dealer or any other person shall not make any retail sale of such commodity at a price exceeding the revised retail sale price, communicated to him by the manufacturer, or where the manufacturer is not the packer, the packer and it shall be the duty of the manufacturer or packer as the case may be, to indicate by not less than two advertisements in one or more newspapers and also by circulation of notices to the dealers and to the Director in the Central Government and Controllers of Legal Metrology in the States and Union Territories, .....

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..... in Chapter IX reads as follows: "33. Provisions of the Standards Act and the rules made thereunder relating to commodities in packaged form to apply to commodities in packaged form sold or distributed within the State: - (1) The provisions of the Standards Act and the rules made thereunder, as in force immediately before the commencement of this Act, with regard to commodities in packaged form which is distributed, sold, or kept, offered or exposed for sale, in the State as if the provisions aforesaid were enacted by, or made under, this Act subject to the modification that any reference therein to the "Central Government", "Standards Act" and the "Director" shall be construed as references respectively, to the "State Government", "this Act" and the "Controller". (2) The State Government may make rules, not inconsistent with the Standards Act or any rule made thereunder, to regulate the packaging of any commodity intended to be sold or distributed, within the State in packaged form, or to regulate the sale or distribution, within the State, of any commodity in packaged form. Explanation:- For the purposes of this section, "commodity in packaged form" shall have the meaning .....

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..... lm on the package. The decision of the District Forum was confirmed by the State Consumer Disputes Redressal Commission and the National Consumer Disputes Redressal Commission. The National Commission held that the cartons containing large numbers of film rolls sold on wholesale basis shall be affixed with a sticker indicating the price at which film roll may be sold in retail and that in the case of retail sales, each packet containing a single roll of film should bear a sticker showing the price of the film roll. The Honourable Supreme Court dismissed the appeal filed by the manufacturer against the decision of the National Commission. The Supreme Court in that context dealt with the provisions of the Consumer Protection Act, 1986 and the Standards Act and Rules framed thereunder and held as follows: "4. The Consumer Protection Act, 1986 has been enacted to provide 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 matters connected therewith. The Act was enacted as a result of widespread consumer protection movement. On the basis of the report .....

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..... rt in Titan Industries Ltd., Mumbai v. Union of India and others (AIR 2006 BOMBAY 336). In Titan Industries Ltd'.s case the Bombay High Court dealt with the question whether in the ease of sale of watches the provisions of the Standards Act and Rules of 1977 would apply. It was contended by the manufacturer that the watches are kept for display and sale in showrooms and outlets and are sold by the piece. The customers insist upon inspection/checking. It was contended that the goods by their very nature are such that they cannot be sold in a packaged form, but have to be allowed to be handled and inspected and even worn by the customer before sale. The Bombay High Court accepted the contention of the manufacturer and held, after referring Section 2(b) of the Standards Act and Rule 2(l) of the Rules, thus: ".. From a reading of the Rule, what emerges is that the pre-packed commodity must be placed in a package of whatever nature without the purchaser being present. The product in the package must have a pre-determined value, which value cannot be altered without the package or its lid or cap, as the case may be, being opened or the product undergoing a perceptible modification. .....

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..... s the manufacturer, packer or retailer intends to sell commodity in a packaged form as a pre-packed commodity or commodity in packaged form the Act and the Rules have no application." Dealing with Rule 13(5) of the Rules read with Sixth Schedule, it was held in Eureka Forbes Limited v. Union of India (AIR 2003 ANDHRA PRADESH 275) thus: "19. Rule 13(5) of the Rules read with Sixth Schedule is important to construe the Rules insofar as this case is concerned. Rule 13(5) of the Rules commence with the words "when any commodity is packed by number ......". When the commodity is packed by number as per Sixth Schedule, if the number is less than ten a declaration shall be made by integral number. A vacuum cleaner is sold as a single piece and when the customer visits the office of the petitioner it is not in a pre-packed commodity nor can it be packed, be deemed as commodity in packed form. Therefore, Rule 13(5) of the Rules and the Sixth Schedule have no application. Even otherwise, as one piece is sold, I fail to understand how it can be expressed by integral number of one. This is a strong circumstance to show that when a vacuum cleaner is sold as single piece without any pack .....

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..... is opened. The view taken by the Bombay High Court that the package being opened or its lid or cap being opened, the pre-determined value of the commodity must stand altered or must undergo a perceptible modification, does not appear to be a correct interpretation. The expression "perceptible modification" does not relate to the product, but to the package, lid or cap. 15. The test is not whether a testing is necessary as in the case of an electric bulb or fluorescent tube or any other commodity where such a testing is required. Even if such testing is required for the consumer to purchase it, it does not cease to be a packaged commodity. The thrust is on the quantity of the product which has a pre-determined value being placed in a package without the presence of the purchaser. The purchaser should be told as to the nature of the content in the package and that is achieved by the declaration under Rule 6 bearing on the package or on a label securely affixed thereto. By seeing the label and declaration therein, the consumer must be in a position to ascertain whether he should purchase it. All the necessary specifications and the value of the commodity should be made known to th .....

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..... Act would not apply to a case where the package contains only one piece and sale of that commodity is effected after opening the package. 17. Rule 2(j) defining "multi-piece package" and Rule 2(g) defining "group package" would also support the above finding. "Multi-piece package" as defined in Rule 2(j) means a package containing two or more individually packaged or labelled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole. Illustration thereunder mentions a package containing five toilet soap cakes. "Group package" means a package intended for retail sale, containing two or more individual packages, or individual pieces, of similar, but not identical (whether in quantity or size) commodities. The definition of "multi-piece package" and "group package" would also lead us to the conclusion that even if the number of the commodity is one, it would satisfy the definition of a pre-packed commodity or commodity in packaged form. 18. The definition of "pre-packed commodity" in Rule 2(l) was amended and a new definition is substituted with effect from 13.1.2007. The amended definition reads as f .....

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..... hardly relevant in construing the various provisions of the Standards Act and the Rules and the Enforcement Act. If the various provisions in the aforesaid Acts and Rules would mandate that a commodity should be treated as a pre-packed commodity or a commodity in a packaged form, the intention of the manufacturer is absolutely irrelevant. To our mind, interpretation of the provisions of the aforesaid Acts and Rules is to be made from the point of view of the consumer and keeping in mind the object sought to be achieved by the enactment of the Acts and the framing of the Rules under the Standards Act. Viewed in that angle, it is abundantly clear that the intention of the manufacturer, packer or retailer is hardly relevant in construing the various provisions of the Acts and Rules. 21. The writ petitioner has raised ground (G) in the Writ Petition in support of the contention that the sale price of the commodity need not be shown on the carton containing the commodity. The said ground reads as follows: "(G) It is respectfully submitted that out of the five declarations required to be made by Section 39 of the said Act and the eight declarations required to be made by Rule 6 of .....

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..... ions of Rule 23, we are of the view that the aforesaid contention raised by the writ petitioner is without any substance. Rule 23 is intended to protect the consumer. The increase in tax is taken care of by Rule 23. At the same time, increase in the price by the manufacturer subsequent to the movement of the commodity to the retailer cannot be added to the price indicated in the declaration on the package. The consumer is entitled to purchase the commodity at the value shown on the declaration contained on the package except with the variation as mentioned in Rule 23. 23. Inter-State trade or commerce in weight, measure or other goods which are sold or distributed by weight, measure or number is dealt with under the Standards Act. The Enforcement Act, 1985 provides for the enforcement of the standards of weights and measures established by or under the Standards of Weights and Measures Act, 1976 in respect of intra-State trade or commerce. Section 33 of the Enforcement Act provides that the provisions of the Standards Act and the rules thereunder with regard to commodities in packaged form shall, as far as may be, apply to every commodity in packaged form which is distributed, .....

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..... ginal Petition, Electronic Research Limited, is engaged in the production, sale and distribution of various electronic items including Satellite Receivers. The Original Petition was allowed by the learned single Judge, following the judgment in O. P. No.16488 of 1998 (from which W. A. Nos.218 of 2003 and 1098 of 2003 arose). For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, this Writ Appeal is allowed, the judgment of the learned single Judge is set aside and the Original Petition is dismissed. No order as to costs. W. A. No.1268 of 2003: Respondents 1 to 3 in O. P. No.15175 of 1993 are the appellants in this Writ Appeal. The petitioner in the Original Petition, namely, M/s. Godrej Doyce Mfg. Co. Ltd., is a manufacturer of Typewriters. The Original Petition was allowed by the learned single Judge. The judgment in O. P. No.16488 of 1998 was also relied on by the learned single Judge. Following the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, this Writ Appeal is allowed, the judgment of the learned single Judge is set aside and the Original Petition is dismissed. No order as to costs. W. A. No.1217 of 2003: Respondents 1 and 2 in O. P. .....

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..... W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.2074 of 2000: The petitioner is carrying on the business under the name and style "Akai India" and is engaged in the manufacturing and marketing of various products like, Television sets, Audio Systems, Video Systems etc. Similar prayers as made in O.P.No.16488 of 1998 have been made in this Original Petition as well. For the reasons stated in the judgment in W.A.Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.9544 of 1999: The petitioner, "BPL Sanyo Ltd.", is engaged in the manufacture and distribution of Cassette Recorders, Video Cassette Players, Rechargeable Lanterns and Push Button Telephones. Similar reliefs as claimed in O. P. No.16488 of 1998 are claimed in this Original Petition as well. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.11776 of 1998: In this Original Petition filed by BPL Telecom Limited, BPL Sanyo Technologies Limited and BPL Limited, similar reliefs as claimed in O. P. No.16488 of 1998 .....

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..... er their orders. The orders are being placed on the basis of tender/quotation. The quantity, quality and size may vary from customer to customer. The products of the petitioner are not generally displayed or stored in any shop. The computer papers are supplied as per the requirement of the customer. Therefore, the products cannot be termed as packaged commodity within the meaning of the Act. In the counter affidavit filed on behalf of respondents 3 and 4, these averments are disputed. According to the respondents, the packages containing computer paper were kept for sale. The petitioner prayed for a declaration that the products manufactured and marketed by the petitioner do not attract the Standards Act, the Enforcement Act and the Rules. There is also a prayer for a writ of mandamus restraining the respondents from initiating any legal proceedings against the petitioner. Since disputed questions of fact are involved in the Original Petition and in view of the pendency of the prosecution against the petitioner, the Original Petition is closed leaving open all the contentions of the petitioner. O. P. No.15944 of 1994: The petitioner is a partnership firm engaged in the busine .....

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..... riginal Petition is dismissed. No order as to costs. O. P. No.21869 of 1998: The petitioner, Usha International Limited, is engaged in the business of distribution of fans, sewing machines, air-conditioners, etc. The Senior Inspector of Legal Metrology seized an air-conditioner on the ground that the necessary statutory declarations were absent on the package. The contentions put forward by the petitioner are similar to the contentions raised in W. A. Nos.218 of 2003 and 1098 of 2003. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.11318 of 2000: The first petitioner, Protech Appliances Private Limited, is a manufacturer of home soda makers. On inspection in the trade premises of the retailer, the Inspector of Legal Metrology found that the necessary statutory declarations are not shown on the package. The contentions put forward by the petitioners are similar to the contentions raised in W. A. Nos.218 of 2003 and 1098 of 2003. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. .....

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..... Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.17675 of 2002: The first petitioner, Safana Cosmetics Perfumes, is a manufacturer of soaps. The contention of the petitioner is that the soap manufactured by the petitioner does not attract the provisions of the Standards Act, the Enforcement Act and the Rules. The soap is an item specifically referred to in Schedule III of the Rules. Schedule III relates to the commodities to be packaged in specified quantities. The III Schedule is related to Rule 5 of the Rules. Rule 5 provides that on and from the commencement of the 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. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.32784 of 2000: The first petitioner, M/s. Marigold Paints Private Limited, is the manufacturer of paints. On inspection in the trade premises of a dealer, it was detected that the packages .....

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