A Clarification from MGP

We read with interest the letter of C.R.Krishna, Proprietor, Little Gas Company (SOM 27-8-13) on the double credit consumers receive after receiving delivery of their first cylinder under the DBT scheme. He has given a very clear explanation of how LPG subsidy works and how the government is actually giving an advance on the purchase of the next cylinder.

But in the last paragraph of the letter it is mentioned that MGP had also raised query on the same subject. All the press releases sent by MGP are sent through its official e-mail address and a survey of the sent mail shows no record of any MGP communication on this particular subject. This is just a clarification.

B.V. Shenoy, Mysore Grahakara Parishat

"Maximum Retail Price" Has No Value!

One frequently sees shops, hotels and clubs charge more than the  maximum retail price (MRP). Most people assume that selling items for more than the MRP must be illegal. But is it really so? A careful study reveals that there may be no law which punishes charging more than the MRP.

Let us first look at hotels and clubs charging more than MRP. Consumer courts are often giving decisions against such hotels and clubs. For example, in the case reported in I(2011) CPJ 13 NC, the National Consumer Commission upheld the order of a District Forum imposing a fine on a hotel for having charged more than MRP on some soft drinks. While such decisions of consumer courts are to be welcomed from the point of view of the consumer, unfortunately, they go against an order of the Supreme Court.

This order of the Supreme Court order (State of Himachal Pradesh Vs. Associated Hotels of India, AIR 1972 SC 1131) given in 1972 makes MRP applicable only to retail sales, i.e., goods sold in shops. So food and drinks consumed in hotels, clubs, restaurants, airplanes, etc. may be sold at prices above the MRP. The Supreme Court held that such food and drinks can not be considered retail sales since they are always accompanied by service.

But it appears that most consumer courts are not aware of this order, because they keep awarding compensation against hotels and restaurants which sell packaged commodities in excess of MRP. Hotels, restaurants or airplanes are exempt from prosecution if they sell foods and drinks at more than MRP. 

Let us now look at shops charging more than MRP. The law (Legal Metrology Act, 2009) related to MRP has been carelessly drafted and so, strictly speaking, even shops which sell above MRP can not be punished under this law.

According to Sec. 18 of the Act (and Sec. 6 of the Legal Metrology (Packaged Commodities) Rules, 2011 made under the Act), the declaration on any package commodity must have the MRP of the commodity. Sec. 36 of the Act prescribes a penalty of Rs. 25,000 for selling a packaged commodity which does not conform to the declarations on the package, but it appears that the nonconformity refers only to weight, number, etc. and not to the price. So there is no explicit prohibition of sale above the MRP in the Act. But Sec. 18
of the Rules prohibits the retail sale of any packaged commodity at a price higher than the printed MRP. So selling above MRP is not prohibited by the Act but is prohibited by the Rules made under the Act.

There are several Supreme Court orders which prescribe the limits of Rules made under an Act. They all say that Rules cannot extend the boundaries of the Act under which they have been made (e.g. Bharathidasan University Vs. All-India Council for Technical Education, (2001) 8 SCC 767). In the present case, the Legal Metrology Act only mandates that the price be printed on the package whereas the Rules go impermissibly further by stipulating that price charged can not exceed the printed price. Therefore, this part of the Rules is invalid. In other words, there is no limit on the price charged! Not printing MRP is against the law, but not selling above MRP. MRP becomes just a fiction.

It is amazing that the legal experts and bureaucrats who draft legislation are ignorant of such legal basics. They should have included the prohibition of charging a price higher than the printed price in the Act itself and not just in the Rules. By not doing it, they have negated the very purpose of MRP.

Many consumer courts have said that charging more than the MRP is unfair trade practice and imposed penalties (sometimes heavy) on the vendors. But this may not be legally correct either. The CPA defines unfair trade practice in Sec. 2(1)(r) as an unfair method adopted "for the purpose of promoting the sale, use or supply of any goods" and proceeds to make a list of unfair trade practices. Charging more than the MRP is not included the list. One may argue that the list is not comprehensive. Even accepting this argument, there is a problem. Selling a product above MRP can not promote the sale, use or supply of that product and so fails to meet the definition of unfair trade practice given in the CPA. It does not matter if everyone thinks that some trade practice is unfair, but if the trade practice does not promote the sale, use or supply of the goods, it is not unfair trade practice according to the CPA. Such is the case with selling above MRP. So the consumer courts can not punish it as an unfair trade practice.

Finally, there is another provision of the CPA which refers to MRP. Sec. 2(1)(c) of the CPA lists the types of complaints which can be filed in consumer courts. They are, unfair or restrictive trade practice, defective goods, deficient service, charging excessive price (which includes charging more than the price printed on the package) and selling goods or services hazardous to life. Actions which can be taken by the consumer courts on these complaints are described in Sec.14 of the CPA, but maybe because of sloppiness in writing the law, this section covers all other types of complaints except charging excessive price. So as the CPA stands now, one can complain about selling above MRP, but the consumer court can not give any order against it! Even if the Act prescribed what type of action the consumer courts can take against selling above MRP, it is still not clear if such an order is legal. According to Sec. 3 of the CPA, the Act is not in derogation of the provisions of any other act and since the Legal Metrology Act itself does not prescribe a punishment for selling above MRP, CPA may not be able to go beyond it and prescribe such a punishment.

To conclude, there seems to be no law against selling above MRP and no court can punish any one for selling a product above MRP. By sheer carelessness in lawmaking, the very purpose of having an MRP has been
defeated!

B.Vaikunth Shenoy, Mysore Grahakara Parishat

Traffic Danger

Several roads in Mysore have been declared one-way, but the police are not paying enough attention to enforcing strict one-way traffic. Vehicles going the wrong way for short distances on busy roads such as D.D. Urs Road and Kalidasa Road are common. This is causing great danger to law-abiding drivers.

Similarly, road dividers have been installed on several roads but again one-way traffic on the two halves of the road is not being enforced properly. This may lead to accidents. The photo shows KRS Road opposite CFTRI Main Gate. There is no break in the road divider here and so all vehicles leaving the western entrance of the Railway Station should proceed south towards Dasappa Circle. Vehicles intending to go north towards Akashvani should take a U-turn at LIC building or better still at Dasappa Circle itself. But many drivers are too lazy or arrogant to take the longer route. Instead, they are proceeding northwards against the oncoming traffic for about 30 meters where the road divider ends. We hope that the police would take action to stop this dangerous habit.

D.V. Dayanand Sagar, Mysore Grahakara Parishat

Why is High-tech Aadhaar Becoming Low-tech?

We are bombarded with advertisements about submitting Aaadhaar card details to banks and LPG distributors to avail of the LPG subsidy.

But when we applied for Aadhaar cards, most of us checked the box which said "I want to link my existing Bank A/c to Aadhaar and I have no objection on this issue" and submitted our bank account number. What is preventing UIADI from linking the Aadhaar number and the bank account number itself? Why is it asking us to personally hand over a xerox of our Aadhaar card to the bank?

Similarly we are being asked to hand over personally a xerox of the Aadhaar card to the LPG distributors. But a simple e-application is available at here which does the same job without having to personally visit the LPG distributor. Why is there silence on this application form?

The reason for this letter is that it takes half a day, some times a whole day, to vist the bank and the LPG distributor and complete the formalities. It is the purpose of Aadhaar to prevent such hassles. But for some reason UIDAI is forgetting this. It is like having e-mail facility, but instead of using it, taking a printout of the e-mail and sending it by post!

M.A.Sridhar, Mysore Grahakara Parishat