Restaurants Cannot Charge Above MRP For Packaged Water Even Inside Dining Premises: Chandigarh State Commission
Pranav B Prem
The State Consumer Disputes Redressal Commission, Union Territory of Chandigarh, comprising Mrs. Padma Pandey, Presiding Member, and Preetinder Singh, Member, has held that restaurants are not permitted to charge more than the Maximum Retail Price (MRP) for pre-packaged commodities such as bottled water, even when such sale takes place within a restaurant offering premium ambience and services. The Commission set aside the order of the District Consumer Commission, Chandigarh, and held that charging above MRP for a sealed water bottle amounts to an unfair trade practice.
The dispute arose when the complainant, Ishita Khanna, visited “Ghazal Restaurant” in Chandigarh on December 12, 2023. After dining at the restaurant, she noticed from the invoice that she had been charged ₹55 for a sealed Aquafina water bottle, despite the MRP printed on the bottle being ₹20. In addition to this, GST was levied on the inflated price of ₹55, even though MRP already includes all applicable taxes. Alleging deficiency in service and unfair trade practice, she approached the District Consumer Commission, Chandigarh. However, her complaint was dismissed as being devoid of merit, prompting her to file an appeal before the State Commission.
Before the State Commission, the restaurant admitted that it had charged ₹55 for the bottled water. It justified the pricing by contending that Ghazal Restaurant was one of the oldest and well-known restaurants in the city, offering premium ambience, comfort, air-conditioned seating, and quality services. According to the restaurant, customers pay not merely for food or water but for the overall dining experience, and therefore there was no deficiency in service or unfair trade practice on its part.
After hearing the parties, the State Commission framed the core issue as to whether a restaurant could charge over and above the MRP of a sealed water bottle. Answering this in the negative, the Commission relied on the Legal Metrology (Packaged Commodities) Rules, 2011. Referring to Rule 2(m), the Commission observed that the “maximum retail price” is the highest price at which a packaged commodity may be sold to the consumer and that it is inclusive of all taxes. The Commission further noted that Rule 18(2) of the 2011 Rules expressly prohibits any retail dealer or other person from selling a packaged commodity at a price exceeding the retail sale price.
The Commission emphasised that the water supplied to the complainant was a sealed, pre-packaged commodity bearing an MRP of ₹20. It held that when a restaurant sells such a product, it acts as a retailer, and “the fact that the sale occurs on restaurant premises does not denude the transaction of its essential character as a retail sale of a packaged good.” The bench observed that MRP includes all taxes, packaging costs, and the retailer’s profit margin, and is intended to provide transparency and protect consumers from hidden or additional charges.
Holding the restaurant liable for unfair trade practice under the Consumer Protection Act, 2019, the Commission noted that the invoice clearly showed that ₹55 was charged for a water bottle priced at ₹20, while other food items were billed as per the menu rates. The Commission also rejected the restaurant’s argument that premium ambience and service justified higher pricing for bottled water, observing that this reasoning conflated two distinct categories—food and beverages prepared in-house, which may be priced freely, and pre-packaged commodities bearing an MRP, the sale of which is strictly regulated. It categorically held that in the latter case, “the MRP constitutes the statutory ceiling, inclusive of all taxes.”
The Commission further distinguished the reliance placed by the restaurant on the Supreme Court’s decision in Federation of Hotel and Restaurant Associations of India v. Union of India, clarifying that the said judgment did not confer any blanket authority on restaurants to charge above the printed MRP for sealed, pre-packaged commodities separately billed to consumers.
Consequently, allowing the appeal, the State Commission set aside the District Commission’s order and partly allowed the consumer complaint. The restaurant was directed to refund the excess amount of ₹25 charged above the MRP and to pay compensation of ₹3,000 to the complainant for mental agony and physical harassment caused due to the unfair trade practice, with interest stipulated in case of non-compliance within the prescribed period.
Cause Title: Ishita Khanna vs. Ghazal Restaurant
Case No: A/142/2025
Coram: Mrs. Padma Pandey, Presiding Member, Preetinder Singh, Member
