Charging Above MRP For Packed Commodities Constitutes Unfair Trade Practice, Hyderabad Commission Orders Chicha’s Asli Restaurant To Pay 1k Compensation And Refund Bottle Charges

Brief Facts:

Lakkireddy Lokesh Reddy (“Complainant”), a 26-year-old advocate residing in Hyderabad, visited Chicha’s Express (“Restaurant”), a restaurant in Banjara Hills, on April 11, 2021. During his visit, Lokesh Reddy ordered a meal that included garlic chicken kabab, two 250ml mini-PET COLA bottles, and two 500ml mini water bottles. However, when he received the bill, he noticed that he had been charged Rs. 30 for each mini-PET COLA bottle, even though the maximum retail price (“MRP”) printed on the bottle was Rs. 20. Similarly, he was charged Rs. 20 for each water bottle, despite the MRP being Rs. 10.

Aggrieved, the complainant filed a complaint with the Hyderabad District Consumer Disputes Redressal Commission-I (“District Commission”), alleging unfair trade practices and deficiency of service by the restaurant. He also pointed out that the restaurant's official website listed higher prices for the beverages than the MRP. The complainant further expressed dissatisfaction with the dining conditions, stating that customers were compelled to eat in their cars in an open area filled with dust and pollution.

The restaurant denied all allegations of unfair trade practices and deficiency of service. They maintained that the charges imposed on the complainant were consistent with the items listed in their menu. Additionally, they clarified that any additional costs were attributed to the ambiance that the restaurant provided to its patrons. The restaurant challenged the complainant's claim that their staff had displayed rude behaviour and had coerced him into paying the inflated bill. According to the restaurant, these allegations were devoid of any factual basis and were entirely baseless.

Observations by the District Commission:

The District Commission highlighted the legal framework governing the sale of pre-packaged commodities, specifically the Legal Metrology (Packaged Commodities) Rules, 2011. According to Rule 18(2) of the 2011 Rules, no retail dealer or other person, including manufacturers, packers, and importers, is permitted to make any sale of a commodity in packed form at a price exceeding the retail sale price. In light of the rules, the District Commission ruled that charging above the MRP not only constituted an unfair trade practice but also violated the amended Legal Metrology Rules, 2011, which prohibited dual MRP.

The District Commission ruled in favour of the complainant. It further ordered the restaurant to pay compensation of Rs. 1,000 and to refund the excess amount of Rs. 40 charged for the bottled beverages. The restaurant was also directed to pay an interest rate of 6 percent per annum from the payment date until realization. Additionally, the District Commission ordered the restaurant to cease the practice of charging above MRP for pre-packaged commodities immediately.

Case: Lakkireddy Lokesh Reddy vs the Operations Manager, Chichas Asli Hyderabad

Case No.: CC/439/2021

Advocate for the Complainant: In Person

Advocate for the Respondent: Adv. A. Bhaskar Rao

Click Here To Read/Download Order