What can be done when theatre charges excess or more price for food? Is it allowed?

All the cinema lovers would agree that movies and food are the best partners. The weekend trips to movies become gleeful when such trips are accompanied with toothsome munchies and nibbles. But toady, this enhanced experience comes with a price. This is largely due to the fast paced changeover from single screen theatres to multiplexes. As of now, all the Indian metro cities are brimming with multiplexes, which were once characterised by single screen theatres and cinema halls. All multiplexes play along with foods and beverages that have untenable and extravagant prices.

Even though 60 to 70 percentage of profit, which comes from the sale of tickets, goes to the production companies for the first one or two weeks from the date of release, only 30 to 35 percentage of the profit will be given to them for the rest of the days, till the movie is been played.[i] When this is the case in India as opposed to the Western model, multiplexes in India have no need to make a penny more by escalating the prices of food that they sell. Third party contractors own most of the food points in multiplexes. They in an attempt to recoup their large sums of invested money, set exorbitant rates to their products along with restricting the movie watchers to carry their own food articles, thereby impelling movie viewers to buy the expensive food kept at their outlets. This write-up will probe into what can be done, when a theatre charges more price for food and will scrutinise whether such practice is allowed or not.

What can be done?

Is the practice of charging excess price for foods in theatres allowable, is a critical question that has no definite answer. But it is definite that something could be done when theatre charges more prices for the food it sells. Since the issue that emanates from the practice of charging more prices for food in theatre is in relation to the interests of a consumer, it has to be dealt with according to the principles set out in the practice of the Consumer Protection Act, (CPA) 2019. Though the Act has not prescribed any statutory form in which an appeal is to be filed, the hierarchy of appeal from low to high is as follows.

1. District Consumer Forum

2. State Commission for Consumer Disputes Redressal (SCDRC)

3. National Consumer Disputes Redressal Commission (NCDRC)

4. The Supreme Court of India

However Section 24 of CPA, 2019 mentions that more than 30 days should not have elapsed between the date of order and the date of appeal for approaching the National Commission. For any order to be operative it should have been communicated. In this sense, the period of 30 days will commence only on the actual receipt of order.

When a case is filed before any forum against the excess charging of prices by theatres for food, any of the following two remedies could be claimed, either jointly or separately.

• Compensation for charging more than Maximum Retail Price (MRP) of any packed good
• Order for entitling the movie-goers to carry their own food articles

Courts have entertained cases, which sought remedies of this sort. In Rupasi Multiplex V. MautusiChaudri,[ii] the respondents were compelled to buy mineral water bottle priced more than its market price, by prohibiting them to take their water bottle inside the Multiplex. The NCDRC on Aug 8, 2015, observed that restriction to carry water bottle without providing free drinking water and making them buy highly priced water bottle amounts to unfair trade practice and further slapped the multiplex to pay compensation of Rs 10,000 and cost of litigation of Rs 1,000 along with a direction to deposit Rs 5,000 as cost of appeal. Later in the case of Big Cinemas V. Manoj Kumar,[iii] the respondent was charged Rs 30 for a bottle of drinking water, the MRP of which is Rs 16. The NCDRC on Feb1, 2016, dismissed the revision petition filed by the multiplex, which challenged the orders of a District Forum and that of a SCDRC, and affirmed the decision of the District Forum as well as SCDRC along with directing the multiplex to return excess money charged. It also slapped the multiplex with a fine of Rs 6,500 as compensation and also imposed further costs of Rs 5,00,000.

Is it allowed?

As said earlier, to ask whether or not, charging more price for food in a theatre is allowed, cannot be answered in a straight way. This is so because, there is no rule that exclusively bars or entitles the multiplexes (and theatres) to charge higher prices for foods and beverages sold within its premises. The answer for this question can be appreciated by dissecting it into various components, as follows, and by analysing the same.

• Rule 18(2) in Chapter 2, the provisions of which are applicable to packages intended for retail sale, of the Legal Metrology (Packaged Commodities) Rules, 2011 asserts that,
  1. A Retail dealer[iv] (or)
  2. Any other person including
     • Manufacturer
     • Whole Sale Dealer
     • Packer
     • Importer
  3. cannot make any sale of any commodity in packed form
  4. at a price exceeding [Retail Sale Price.][v]
     • Going by strict interpretation of this rule, it makes the practice of charging higher price for food by multiplexes as unallowable. But Rule 26 of the same Legal Metrology (Packaged Commodities) Rules, 2011 will give a different connotation to this practice of charging higher for food sold in theatres.

• Rule 26(b) of the Legal Metrology (Packaged Commodities) Rules, 2011 exempts from the application of these rules, any package covering fast food items packed by restaurant or hotel or any other like institution.
  • If we go by literal interpretation of this rule, charging higher prices for fast food by multiplexes seems to be unquestionable.
  • But it may be the opposite way. It is because, what institutions will come under the purview of the term “like institutions” has to be decided by courts. Say for instance, in a PIL filed by JainendraBaxiin Maharashtra High Court, one of the judges opined that, foods sold in hotels and restaurants involves service and hence allowed to charge more, whereas foods sold in theatres do not have a touch of service and hence not allowed to charge more than MRP, as Chapter 2 of the Legal Metrology (Packaged Commodities) Rules, 2011 will apply to retail sale of goods alone.
• Leaving aside this exemption, pre-packaged commodities like soft drinks or mineral water bottles are obviously governed by the Legal Metrology (Packaged Commodities) Rules, 2011. Section 2(l) of the Legal Metrology Act, 2009 defines pre-packaged commodities as those, which are placed in a package of whatever nature in the absence of a purchaser, and that those products contained therein will have a pre-determined quantity. Whether fast food sold in multiplexes or any other product falls within the ambit of pre packaged commodities or not is a matter that has to be qualified by the courts.
  1. In Titan Industries Ltd V. Union of India,[vi] the court formulated a twin test for ascertainment of whether a product is a pre-packaged commodity or not. The test is that, is the product required to be packaged before it is sold by its very nature and, if such package is opened will it undergo any perceptible change.
     • If we go by this decision, then fast foods that are being sold at theatres will fall within the purview of pre-packaged commodities.
  2. In Whirlpool of India Ltd V. Union of India,[vii] the court had taken a more liberal view and held that refrigerator is a pre-packaged commodity even if it is being opened for display and testing. The court further said that, as Rule 3 of the Legal Metrology (Packaged Commodities) Rules latently but specifically intends that provisions of Chapter 2 should apply to packages intended for retail sale, the word “package” should be construed accordingly.
     • If we go by this view taken by the court, then also fast foods sold in theatres would come under the meaning of pre-packaged commodities.

• Leaving apart all these things, which discusses about, whether or not the provisions and rules under the Legal Metrology Act, 2009 will apply to theatres, it is a general rule under the provisions of many States’ Cinemas (Regulation) Act.[viii] It makes it mandatory for the management, leaseholders and food points of the theatre to comply with the relevant conditions of the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011 and Food Safety and Standards Rules, 2011 made under the Food Safety and Standards Act.
  • This will make the charging of higher prices for foods in theatres to be forbidden.
• Even though all the above points discussed above make us to think that, charging high prices for food in theatres is not allowable the two latest judgments made in relation to this issue confers an entirely different view.
  1. In Multiplex Association of India V. State of Jammu and Kashmir,[ix] on Aug 10, 2018 the Supreme Court stayed the order passed by Jammu and Kashmir High Court, which directed multiplexes not to restrain cinema viewers from carrying their own food articles and water inside theatres.
  2. In Vijay Gopal V. INOX Leisure Ltd, State of Telengana and another,[x] on Feb 28, 2019 the appellant contended that, opposite parties 1 and 2 have entered into an agreement with beverage companies to sell water and beverages at a high cost inside the multiplexes, more than the price of the same brand available in retail market. The NCDRC held that no violation of the provisions 3(4) read with 3(1) of the Competition Act has been proved and the agreement between the opposite parties do not have the potential of creating an adverse effect on competition in the market of retail sale of beverages inside multiplexes, without taking into account, the contention of appellant that, as water is an essential commodity it should be allowed to be carried within the multiplexes.
• The above views expressed in the two latest judgments need not be taken as absolute. This is so, because there always existed conflicting opinions between the courts on the same issue.
  1. On Apr 4, 2018 the Bombay High Court, while hearing a PIL, which challenged the prohibition on carrying movie viewers’ own food articles inside movie theatres and multiplexes, allowed the plea and directed the Maharashtra Government to frame policies regarding the issue. Moreover Justice Kemkar accepted that prices of foods and beverages sold inside multiplexes are exorbitant and said that theatre is not a sensitive place like that of an airport and hence the management of a theatre should only ensure that no rules regarding safety or security has been breached.[xi]
  2. In Cine PrakashaluViniyogaDarulaSangham V. Hindustan Cocacola Beverage Pvt Ltd, the court recognized the principle that different sales of medium will have different and therefore report between prices of food.
  3. In the case of Zaika Bazar V. Hemant Goel,[xii] the view taken is contradictory to the view in above case. The complainant was charged Rs 34 for a mineral water bottle, the MRP of which is Rs 12, by the appellants. On Oct 9, 2006 the court dismissed the appeal and imposed Rs 50,000 as fine on the appellants. It further proclaimed that, no commodity at any place can be sold at a price higher than its MRP.

Conclusion:

The intention behind quoting a slew of cases with different views is to make one realize that, there have been many judgments in the past, some of which go hand in hand with the present ones and some of which are contradictory to the present ones. Hence answer to the question, whether the practice of charging more price for foods in theatres, is dependent on the judicial interpretation given to it at that time. Apart from this, there is an intention among the public and many social activists to curb this unfair practice. Moreover, the Legal Metrology (Packaged Commodity) Rules are applied to pre-packaged commodities with an intention to safeguard consumers of such commodities, as the consumers will not know what quantity of goods has been packaged, how fresh it is, when they expire or the value of such packaged commodity. But there are practical difficulties, like lack of authority to efficiently enforce the provisions, as well as technical flaws, like Rule 26(b) of the Legal Metrology (Packaged Commodities) Rules, 2011 that disallows such intentions from becoming a reality. Steps should be taken so that the purpose of the legislative intent is been served.

Edited by Pragash Boopal

Approved & Published – Sakshi Raje

Reference

[i] https://www.scoopwhoop.com/Why-Food-Beverages-Cost-Insanely-High-In-Movie-Theaters/

[ii] https://www.scconline.com/blog/post/2015/10/15/free-portable-drinking-water-must-be-provided-inside-the-cinema-halls/

[iii] https://www.scconline.com/blog/post/2018/08/13/sc-stays-the-order-of-jk-hc-on-allowance-of-carrying-own-food-articles-in-cinema-halls/

[iv] Rule 2(j) of the Legal Metrology (Packaged Commodities) Rules, 2011

[v] Rule 2(m) of the Legal Metrology (Packaged Commodities) Rules, 2011

[vi] AIR 2006 BOM 336

[vii] (2007)14 SCC 468

[viii] https://factly.in/indian-movie-theater-rules-next-time-you-go-a-cinema-theatremultiplex-check-if-your-theatre-follows-these-rules/

[ix] Special Leave Petition (Civil) Diary No 2790 of 2018

[x] Case No. 29 / 2018

[xi] https://economictimes.indiatimes.com/news/politics-and-nation/food-should-be-sold-at-regular-prices-in-theatres-high-court/articleshow/63611915.cms?from=mdr

[xii] Appeal No. A-512 of 2006