Understanding The ‘Dual MRP’ Issue And The Confusion Around It
May 2nd, 2017
Image Credit: cloudinary
The issue of Dual MRP is in the news again, thanks to an order of the district consumer forum in Hyderabad. The law is actually silent on the issue of dual MRP.
The issue of ‘Dual MRP’ is once again in the lime light, thanks to the decision of district consumer forum in Hyderabad. While dealing with a complaint about higher MRP for bottled letter in INOX multiplex, the district forum relied on an earlier order of the National Consumer Disputes Redressal Commission (NCDRC) where the NCDRC ruled that there cannot be two MRPs, except in accordance with the law. But it has to be noted that the law is silent on the issue of dual MRP.
The relevant law
All packaged commodities like bottled water are covered under sec 2(l) of the Legal Metrology Act, 2009. Every packaged commodity also has to comply with the provisions of Rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011. As per Rule 6, the following mandatory information has to be declared on the package for the benefit of the consumer.
- Name & address of the Manufacturer / Packer / Importer.
- Common or generic name of the commodity contained in the package.
- Net quantity of the commodity contained in the package or where commodity is packed or sold by the number, the number of commodity contained in the package shall be mentioned.
- Month and year of manufacturing / pre-packing / importing.
- Retail sales price of the package (as maximum retail price Rs. ___, inclusive of all taxes)
- Dimensions of the commodity where the sizes of the commodity contained in the package is relevant
It is clear that the MRP is to be fixed by the Manufacturer/Packer/Importer. Nobody else can fix it.
While there is no principle of law or legal proposition to have different MRPs for the same product, there is no explicit prohibition also, under the Legal Metrology Act, 2009 or the rules framed.
In fact, in the case before the NCDRC, explanation to II (c) of Sub-section 4 of Section 4A of the Central Excise Act, 1944, was mentioned. This particular explanation contemplates different sale price for the same product for sale at two different locations.
Then what did the NCDRC actually say?
The NCDRC in its order penalized Big Cinemas and not the manufacturer Pepsi. It held that the higher MRP was the making of Big Cinemas and not of the manufacturer Pepsi. It explicitly stated that MRP was not made/sanctioned by the Manufacturers. The NCDRC order also mentions that Pepsi nowhere stated that they have two MRPs for bottled water and are conspicuously silent about it.
The Hyderabad district forum relied on the above order of NCDRC and penalised INOX multiplex. This is valid unless INOX can prove that the higher MRP was actually fixed by the manufacturer and not the retailer. It has to be noted that only the manufacturer/importer/packer has the right to decide the MRP and not the retail seller.
What is the government’s stand?
The Government of India on multiple occasions mentioned in the Lok Sabha that state governments are competent for taking action in these cases and an advisory has been sent to the state governments regarding the issue. An advisory on the issue was sent to various states in September 2016. But not much has been done about it.
What is the way forward?
While it may sometimes be the case that the retailers are fixing a higher MRP and not the manufacturers, there is considerable confusion and ultimately it is the end consumer who is on the losing side. The government would do well to amend the rules and categorically say that dual pricing is not allowed for packaged commodities. In the absence of such clear rules, the consumers will lose because not everybody can approach the consumer forum.