Karnataka High Court: While deciding the petition filed by Samsung India seeking to quash the proceedings against it for violation of provisions under Legal Metrology (Numeration) Rules, 2011, Legal Metrology (Packaged Commodities) Rules, 2011 and Legal Metrology Act, 2009, the bench of Sachin Shankar Magadum, J.*, held that the offences indicated by the Inspector, Department of Legal Metrology are applicable to retail packages and not to wholesale packages and therefore, on meticulous examination of the allegations, it was clearly evident that the complaint is tainted with malafides. The Court also held that the impugned complaint has grossly misinterpreted the provisions 2009 Act and Packaged Commodities Rules, 2011.
Background and Contentions: Samsung India is prominent consumer and household electronics and appliances company and is in the business of manufacture, import, marketing and selling of consumer durable electronic products, home appliances and cellular mobile phones through its distributors and retailers.
Inspector, Department of Legal Metrology inspected M/s. ABM Tele Mobiles India Pvt. Ltd., Bengaluru who is a distributor for Samsung India. While inspecting one pre-packed Samsung Galaxy Tab-4 manufactured by Samsung, it was found that the MRP printed was Rs. 14,000/- which was not in conformity with Rule 4(2) of the Legal Metrology (Numeration) Rules, 2011 read with Section 6(2) and (3) of the Legal Metrology Act, 2009. The Inspector also alleged violation of Section 11 read with Section 29 of Metrology Act, 2009.
The Inspector further alleged to have inspected one pre-packed (wholesale packaged product) containing 20 individual packages which did not have qualifying symbol ‘N’ for indicating the quantity as provided under Rule 13 (5)(ii) of Legal Metrology (Packaged Commodities) Rules, 2011. It was claimed that mere mentioning of Numeral ’20’ without qualifying unit ‘N’ amounts to violation of Packaged Commodities Rules, 2011.
Vis-à-vis the first offence, Samsung India contended that combined reading of Section 52 and Section 10 of Metrology Act, 2009, makes it quite clear that Numeration Rules, 2011 would apply only for weight, measure or number as detailed in Section 52(2)(f) of Metrology Act, 2009 and therefore, it is not at all applicable for price/MRP of packaged goods. The counsel also pointed out that MRP on pre-packaged goods should be as per Rule 2(m) of Packaged Commodities Rules, 2011 and not as per Numeration Rules, 2011. It was further pointed out that the product in question is in conformity with the provisions of law and therefore, the Inspector has misinterpreted the provisions and rules and has arbitrarily issued notice for compounding the alleged offences without following the principles of natural justice.
The respondent rebutted the afore-stated contentions by arguing that Samsung India was offered sufficient opportunity to offer explanation for compounding the offences. As they failed to offer satisfactory explanation, the Inspector was compelled to register the complaint.
Court’s Assessment and Verdict: Upon perusing the complaint and contentions raised by the parties, the Court stated that-
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A combined reading of Sections 52 and 10 of Metrology Act, 2009, makes it evident that Numeration Rules, 2011 would apply only for weight, measure or number as detailed in Section 52(2)(f) of Metrology Act, 2009. The Court thus pointed out that Rule 4(2) of Numeration Rules, 2011 does not apply for price/MRP and therefore, no offence is made out as there is no violation of Section 11 read with Section 29 of Metrology Act, 2009.
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The Court noted that price/MRP of packaged goods is regulated under Packaged Commodities Rules, 2011, with Rule 2(m) being the governing one. Section 18 of Legal Metrology Act, 2009 states that no one can manufacture, pack, sell, import expose or possess for sale any pre-packaged commodity unless such package is in the prescribed standard quantity and a procedure is also prescribed under Section 52(2)(j) of the 2009 Act. Thus, the MRP of pre-packaged goods has to be in terms of Packaged Commodities Rules, 2011 and more particularly, as per Rule 2(m) of Packaged Commodities Rules, 2011. The Court thus pointed out that on bare reading of Rule 2(m), it is clear that the Inspector has misinterpreted the law applicable to price/MRP and has arbitrarily issued notice for compounding the alleged offence.
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Regarding the second alleged offence of packages not carrying the qualifying symbol “N”, the Court analysed Rule 13(5)(i) and 5(ii) of Packaged Commodities Rules, 2011 and pointed out that it is evident that the said Rule is applicable only for retail packages and are not applicable to wholesale packages. The provisions applicable to wholesale packages is enumerated in Chapter-III of Packaged Commodities Rules, 2011. The Court also examined Rule 24 of Packaged Commodities Rules and pointed out that under Rule 24(c), only number of quantities is to be disclosed without adding a prefix ‘N’ or ‘U’ as indicated in Rule 13(5)(ii) of Packaged Commodities Rules, 2011.
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The Court also found the Inspector’s complaint be unsustainable as it was registered against all the Directors when the company had clearly nominated a person in terms of Section 49 of the Metrology Act, 2009.
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Based on the afore-stated findings, the Court was firmly of the view that the impugned complaint did not disclose any offence and indicated offences are applicable to retail packages and not wholesale packages. The allegations made in the complaint were found to be totally frivolous and vexatious by the Court. The Court further held that that the complaint itself is contradictory and there is a total misinterpretation of relevant Sections of Metrology Act, 2009, Rule 2(m) and Rule 24(c) of Packaged Commodities Rules, 2011.
[Samsung India Electronics Pvt. Ltd. v. State of Karnataka, 2023 SCC OnLine Kar 29, decided on 31-05-2023]
*Order delivered by Justice Sachin Shankar Magadum
Advocates who appeared in this case :
Petitioner- C.R. Mahendra Gowda, Adv;
Respondent- Vinayak V.S., HCGP.
