# MUNICIPAL CORPORATION OF DELHI v. LAXMI NARAIN TANDON ETC. ETC

- **Citation:** [1976] 2 S.C.R. 1050
- **Court:** Supreme Court of India
- **Decided:** 1975-12-11
- **Case number:** Criminal Appeal Nos. 11,6, 63 and 64 of 1968
- **Bench:** Y. V. Chandrachud, P. N. Bhagwati, R. S. Sarkaria
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/municipal-corporation-of-delhi-v-laxmi-narain-tandon-etc-etc-6695
- **Pages:** 10

## Headnote

••Sale" -Distinction be11·/een-Prevention dj Food -Adulteration Act, 1954,
and Punjab General Sales. Tox Act.
Storing an article of food for purposes other than sale-I/ constitutes all,
offence-Supply and offer of food by a hotelier to a customer under a consoltdated charge-If constitutes sale within the nzeaning of Prevention of Food
A.dulterc.ilian Act.
.
. '
The respcndents Y.'ere charged with. an offence under s. 7 read with s. 16
or the Prevention of Food Adulteration Act, 1954 .. on the ground that they had
stored far sale articles of food, which were adulterated and of sub-standard
quality. Before the ~Iagistrate, the respondents contended that no articles of
food \Vere-sold in the hotel to non-resident visitors. or the public generally and
that the hotel provided residential /services and other amenities including meals
only tQ, resident customers against a composite charge and that no rebate was
ano .. ved for food if a resident customer. chose not to eat it The 11agistrate
acquitted the respondents.
D
On appeal the Division Bench of the High: Court referred two questions to
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the Full Bench. namely, (i) whether for the purposes of the Prevention or Food
Adulteration Act, 1954, there was no scle of food provided by a hotelier to a
guest when a consolidated charge was made; and (ii) whether the expression
"store'' used in ss. 7 and 17 of the Act means storage: simpliciter or storing for
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sale?
The Full Bench held ( 1) that there was no 'sale' of food to the customer
within the contemplation of the Act; and (2) that the word "store" used in ss. 7
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·and 16 means storage for sale.
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Allowing the appeals,
HELD : (I) The· High Court has over·looked the important distinction bet·
ween the connotation of .. sale" for the purposes of Sales Tax Act and the one
under the Prevention of Food Adulteration Act. The supply of food by a
hotelier to a customer when a consolidated charge is made for residential accom-
~
modation and other amenities, including fcxxi, amount9 to a ''sale" of an article
F
of food for the purposes of the Prevention of Food Adulteration Act. [1057
B and 1058 FJ
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(a)_ A comparative study of the definition- of 'sate' in the Sales Tax Act
and the Prevention of Food Adulteration Act would show that the connotation
of "sale"_ for the purposes of Prevention of Food Adulteration Act is far wider
than the meaning assigned to it in the Sales Tax Act. [1056. B]
(b) The object of the Sales Tax Act is to levy tax on sales or purchases
· (
of certain articles of commerce. The object of the Prevention of Food Adulteration Act is to prevent, in the i):lterest of the health of the community, supply
of adulterated foodstuffs by a person as a part of his business activity. [1056 F
& HJ
(c) For the purPoses·of the Prevention of Food Adulteration-Act the broad
test applicable would be, whether the article of food was offered by the hotelier
to the resident customer for a money consideration, it being immaterial v:hether
such consideration was a distinct item or was an inseparable element of the
consolidated charge made by the hotelier for providing residential accommoda-
~
services, amenities and food. The mere fact that the property in lhe food
article does not pass to the customer before he eats it doeS not take it out of
the definition of "sale" under the Food Act. In the case of food actually con··
sumed, the property does pass to the customer. Jn other case9, even when. the
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MUNICIPAL CORP. v. L. N. TANDON (Sarkaria, J.)
1051
resident customer does not eat the i'ood offered to him by the hotelier, such an
A
offer by itself would be sufficient to constitute a "sale" of that article of food
within the contemplation of s. 2(xiii) of the Food Act. The fact remains that
the supply or offer of food to a customer i! for a money consideration as a part
of business activity and, as such, constitutes "sale" under the Prevention of
Food Adulteration Act. [1057 C-D 1058 CJ
(d) The object

## Text

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1050
MUNICIPAL CORPORATION OF DELHI
v.
LAXMI NARAIN TANDON ETC. ETC.
December 11, 1975
[Y. V. CHANDRACHUD, P. N. BHAGWATI AND R. S. SARKARIA, JJ.)
••Sale" -Distinction be11·/een-Prevention dj Food -Adulteration Act, 1954,
and Punjab General Sales. Tox Act.
Storing an article of food for purposes other than sale-I/ constitutes all,
offence-Supply and offer of food by a hotelier to a customer under a consoltdated charge-If constitutes sale within the nzeaning of Prevention of Food
A.dulterc.ilian Act.
.
. '
The respcndents Y.'ere charged with. an offence under s. 7 read with s. 16
or the Prevention of Food Adulteration Act, 1954 .. on the ground that they had
stored far sale articles of food, which were adulterated and of sub-standard
quality. Before the ~Iagistrate, the respondents contended that no articles of
food \Vere-sold in the hotel to non-resident visitors. or the public generally and
that the hotel provided residential /services and other amenities including meals
only tQ, resident customers against a composite charge and that no rebate was
ano .. ved for food if a resident customer. chose not to eat it The 11agistrate
acquitted the respondents.
D
On appeal the Division Bench of the High: Court referred two questions to
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the Full Bench. namely, (i) whether for the purposes of the Prevention or Food
Adulteration Act, 1954, there was no scle of food provided by a hotelier to a
guest when a consolidated charge was made; and (ii) whether the expression
"store'' used in ss. 7 and 17 of the Act means storage: simpliciter or storing for
~
sale?
The Full Bench held ( 1) that there was no 'sale' of food to the customer
within the contemplation of the Act; and (2) that the word "store" used in ss. 7
~
E
·and 16 means storage for sale.
"
·
Allowing the appeals,
HELD : (I) The· High Court has over·looked the important distinction bet·
ween the connotation of .. sale" for the purposes of Sales Tax Act and the one
under the Prevention of Food Adulteration Act. The supply of food by a
hotelier to a customer when a consolidated charge is made for residential accom-
~
modation and other amenities, including fcxxi, amount9 to a ''sale" of an article
F
of food for the purposes of the Prevention of Food Adulteration Act. [1057
B and 1058 FJ
'
G
H
(a)_ A comparative study of the definition- of 'sate' in the Sales Tax Act
and the Prevention of Food Adulteration Act would show that the connotation
of "sale"_ for the purposes of Prevention of Food Adulteration Act is far wider
than the meaning assigned to it in the Sales Tax Act. [1056. B]
(b) The object of the Sales Tax Act is to levy tax on sales or purchases
· (
of certain articles of commerce. The object of the Prevention of Food Adulteration Act is to prevent, in the i):lterest of the health of the community, supply
of adulterated foodstuffs by a person as a part of his business activity. [1056 F
& HJ
(c) For the purPoses·of the Prevention of Food Adulteration-Act the broad
test applicable would be, whether the article of food was offered by the hotelier
to the resident customer for a money consideration, it being immaterial v:hether
such consideration was a distinct item or was an inseparable element of the
consolidated charge made by the hotelier for providing residential accommoda-
~
services, amenities and food. The mere fact that the property in lhe food
article does not pass to the customer before he eats it doeS not take it out of
the definition of "sale" under the Food Act. In the case of food actually con··
sumed, the property does pass to the customer. Jn other case9, even when. the
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MUNICIPAL CORP. v. L. N. TANDON (Sarkaria, J.)
1051
resident customer does not eat the i'ood offered to him by the hotelier, such an
A
offer by itself would be sufficient to constitute a "sale" of that article of food
within the contemplation of s. 2(xiii) of the Food Act. The fact remains that
the supply or offer of food to a customer i! for a money consideration as a part
of business activity and, as such, constitutes "sale" under the Prevention of
Food Adulteration Act. [1057 C-D 1058 CJ
(d) The object of assigning w extensive a meaning to the term "sale" is
to bring within the ambit of the Prevention oi' Food Adulteration Act all comB
mercilll transactions whereunder an adulterated article of food i~ supplied for
consumption by one person to another. [1056 DJ
Municipal Corporation of Delhi v. Shri Kacheroo 11-l<il [1976J 2 S.C.R. 1,
referred to.
(e) The dominant object of the transaction and the intention of the parties,
while entering into the transaction in question, was to provide against payment
wholesome food for consumption, besides residential accommodation and services. [I 058 BJ
C
State of Punjab v. Mis. Associated Hotels of India Ltd. [1972J 2 S.C.R. 937,
referred to.
(2) (a) The Full Bench has rightly answeTed the second question. The
expression "store" in s. 7 means "storing for sale" and consequently, storing an
adulterated article of food for purposes other than for sale would not consti.
tute an offence 'under s. 16(1)(a). [1054-HJ
(b) The terms "store" and "distribute" take their colour from the context
and the collocation of words in which they occur in ss. 7 and 16.
"Storage"
or "distribution" of an adulterated article of food for a purpose other than
for sale, does not fall within the mischief of this section.
Under s. 10, th"' Food
Inspeclor is authorised to take samples of an article of food only from particular
persons indulging in a specified course of business activity, the immediate or
ultimate end of which is the sale of an article of food.
The section does not
give a blanket power to the Food Inspector to take samples of an article of
food from a person who is not governed by any of the sub-clauses of s.' 2(i)
(I) (a). Sub-s. 2 makes il clear that a sample can be taken only of that article
of food which is "manui'actured", ''stored" or "exposed for sole". If an article
of food is not intended for sale and is in the possession of a person who doe.s
not fulfil the character such as is referred to in s. 10, the Food Inspector will
not be competent under the law to take a sample, and on such sample being
found adulterated, to validly launch prosecution thereon. [1054 D-GJ
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal Nos 101104 of 1971.
From the Judgment and Order dated the 24th April, 1970 of Delhi
High Court in Criminal Appeal Nos. 11,6, 63 and 64 of 1968.
V. S. Desai, D. P. Maheshwari and Naresh Sethi for the Appellants.
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A. K. Sen, M. C. Bhandare, Rameshwar Nath and M. K. Gupta
G
for Respondents.
The Judgment of the Court was delivered by
SARKARIA, J.
The common questions that arise for
determination in these appeals on certificate directed against the judgments of
the Delhi High Court are :
(1) Whether for purposes of the Prevention
of
Food
Adulteration Act, 1954 (for short, the Food Act)
12-277SCI/76
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1052
SUPREME COURT REPORTS
, (1976] 2 s.c.R.
there is no sale of food which is provided by a
hotelier to a guest when a consolidated charge is
made for room and the other amenities,
including
food, and when no rebate is allowed for any
meal.
which may not be taken by the guest ?
(2) Whether the expression "store'', as used in section
7 and section 16 of the Act, means storage simpliciter
or storing for sale ?
In answer to the first question, the Full Bench of the High Court,
to which these questions were referred, held that when a composite
charge is made for ·residential accommodation and food by a hotelier,
there is no sale of food to the customer within the contemplation of
the Food Act.
On the second question, its answer was that the word
"store" used in s. 7 and s. 16 of the Act means storage for sale.
The quest~ons arose in these circumstances :
M/s. Associated Hotels of India Ltd.
(for
short,
Associated
Hotels) runs Hotels, one of them is Oberoi Maidens Hotel, 7, Alipur
Road, Delhi.
Respondent 1 (L. N. Tandon) is the Manager of that
Hotel, while Respondent 2 is the Managing Director of the Associated
Hotels.
According to the prosecution case, on July 25, 1966, Shri
P. P. Sinha, a Food Inspector of the Municipal Corporation of Delhi,
got from Respondent 1, the samples of ice-cream, milk,
curd and
butter for the purpose of analysis.
The sealed samples were sent to
the Public Analyst for examination and were found to be sub-standard
and, as such, 'adulterated articles of food' within the purview of
s.
2(i) (i). In the case of ice-cream; there was 1.6% deficiency in
total solids and 2.9% deficiency in fat.
The Assistant Municipal Prosecutor thereupon filed four separate
complaints under s. 7 read with s. 16 of the Act for prosecution of the
Respondents in the court of the Magistrate 1st Class, Delhi. It was
alleged in the complaints that the articles of food of which samples
were taken, had been stored for sale in the said Hotel.
The accused
raised factual as well as legal pleas in defence.
Respondents inter
alia contended that the· sampling was not done in their presence, and
consequently, the entire proceedings, being violative of the mandatory
requirement of law, were vitiated and illegal.
A common stand taken
by both the Respondents, was that no articles of food are wld in this
Hotel to the non-resident visitors, or the public generally,
that the
hoteliers provide residential accommodation, services and other amenities, including meals, only to the resident customers against a composite charge and that no rebate is allowed for food if a resident customer
chooses not to eat it.
The· Magistrate accepted the defence plea that the samples had
been taken in the absence of Respondent 1 and there had been breach
of the law on that score.
He further held that the food articles of
which samples were taken had not been stored for sale.
In the result ·
the Magistrate acquitted both the Respondents.
Against this acquittal. the Municipal Corporation of Delhi carried an appeal to the High
Court.
The Division Bench before which that appeal came up for
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MUNICIPAL CORP. v. L. N. TANDON (Sarkaria, J.)
1053
hearing, referred three questions (including the two set out above) to
a Full Bench for opinion.
Thereafter, the Division Bench, merely on
the basis of the answers returned by the Full Bench upheld the
acquittal and dismissed the appeals.
It will be useful at the outset to have a look at the scheme and
content of the relevant provisions of the Act.
The broad aim of the Act is to ensure the sale and supply of pure
food to the public.
With that end in view, the Act prevents adulteration of food articles.
For the purpose of the Act an article of food is deemed to be
adulterated, if it falls under any of the clauses (a) to (I) of s. 2 (i)
A
This definition of "adulterated article of food" is of very wide ampliC
tude.
Even a sub-standard article would fall within
the
mischief
of sub-clause (l) "if the quality or purity of the article falls
below
the prescribed standard or its constituents are present in quantities
which are in excess of prescribed limits of variabilily".
Section 7 prohibits a person . to "manufacture'.' for sale or "store'',
"sell", or "distribute", inter alia, any: "(i) adultered food".
Contravention of this prohibition is 'punishable as an offence under
s. 16.
The relevant part of the sections reads :
"(1) If any personD
(a) whether by himself or by any other person on
his
behalf imports into India or manufactures for sale, or
stores, sells or distributes any articles of foodE
(i) which is adulterated or misbranded, or the sale
of
which is prohibited by the Food (Health) authority
in the interest of public health ................. .
he shall in addition to the penalty to which he may
be liable under the provisions of s. 6, be punishable
with imprisonment for a term which shall not be less
F
than six months but may extend to six years,
and
with fine which shall not be Jess than one thousand
rupees:"
Then, there is a Proviso to this sub-section which gives a discretion
to the Court for any adequate and special reasons to be recorded, to
award a sentence Jess than the minimum prescribed, only if the offence
G
is under cl. (a) (i) and is with respect to an article adulterated under
s. 2(i) (1).
.
Section I 0 confers powers on the Food fnspector to take sample~
and also indicates the scope of these powers.
Sub-section ( 1) authorises him-
( a) to take samples· of any articles of food from-
(i) any person selling such article;
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1054
SUPREME COURT REPORTS
(1976] 2 S.C.R.
(ii) any person who is in the course of conveying, delivering or preparing to deliver such article to a purchaser oi consignee;
(iii) a consignee after delivery of any such article to him;
and
(b) to send such sample for analysis
to
the public
analyst for the local area within which such sample has been
taken.
*
*
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*''
Sub-section (2) gives power to the Food Inspector to enter and
inspect any place where any article of food is manufactured, stored or
exposed for sale and take samples of such articles of food for analysis.
From a conjoint reading of the above referred provisions, it will
be clear that the broad scheme of the Act is to prohibit and penalise
the sale, or import, manufacture, storage or distribution for sale of any
adulterated article of food.
The terms "store" and "distribute" take
their colour from the context and the collocation of words in which
they occur in ss. 7 and 16. "Storage" or "distribution" of an adulterated
article of food for a purpose other than for sale does not fall within
the mischief of this section.
That this is the right construction of the
terms "store" and "distribute" in s.16 (1) will be further clear from
a reference to s. 10.
Under that section, the Food Inspector, to
whom the Act assigns a pivotal position for the enforcement of its
provisions, is authorised to take samples of an articles of food only
from particular persons indulging in a specified course of business
activity.
The immediate or ultimate end of such activity is the sale
of an article of food.
The section does not give a blanket power to
the Food Inspector to take samples of an article of food from a person
who is not covered by any of the sub-clauses of sub-s. 1 (a) of sub-s. 2.
The three sub-clauses of sub-section 1 (a) apply only to a person who
answers the description of a seller or conveycr, deliverer, actual or
potential, of an article of food to a purchaser or consignee or his
consignee after delivery of such an article to him.
Sub-section
(2)
further makes it clear that sample can be taken only of that article of
food
which
is "manufactured", "stored" or exposed for sale. It
follows that if an article of food is not intended for sale and is in
the possession of a person wha does not fulfil the character of a
seller, conveyer, deliverer, consignee, manufacturer or storer for sale
such as is referred in sub-ss. 1 (a) and (2) of the section, the Food
Inspector will not be competent under the law to take a sample, and
on such sample being found adulterated, to validly launch prosecution
thereon.
In short, the expression "store" in ~. 7 means "storing for
sale" and consequently storing of an adulterated article of food for
purposes other than for sale would not constitute an offence
under
s. 16(1)(a).
The Full Bench of the High Court has thus rightly answered the
second question.
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MUNICIPAL CORP. v. L. N. TANDON (Sarkaria, J.)
1055
The stage is now set for considering the main question, whether
A
food made available to a resident customer in a hotel by a hotelier
against a consolidated charge for all the services and amenities and
food amounts to a sale of an article of food for the purposes of the
Food Act?
The High Court has considered this question entirely in accordance
with the norms and tests applied in the context of Punjab General
Sales Tax Act, 46 of 1948 (for short, the Sales-tax Act) by a Division Bench of the High Court of Punjab in State of Punjab v. M/s.
Associated Hotels of India Ltd. (i) which was subsequently affirmed in
appeal by this Court on January 4, 1972 in State of Punjab v. M/s.
Associated Hotels of India Ltd. (2).
The High Court has adopted two main criteria for holding the
transaction or the arrangement in question not to be a ""'sale' of an article
of food.
First, under such an arrangement, there is no transfer of the
property in the food to the. customer unless it is actually consumed by
him.
Second, the predominant character which the transaction bears
is not that of a sale of an article bf food but of a contract for work or
services, and the food supplied by the. hotelier pursuant to such a
transaction, is only a part of the amenities or services rendered to the
customer.
In our opinion, neither of these reasons holds good, if the matter
is considered in the context of the Food Act.
For a proper appreciation of the points for determination, it is important to bear in mind
the distinction between the definition of the term 'sale' in. the Sales-tax
Act and the Food Act, and also the fact that the purpose, scheme and
the content of the two Acts are entirely different.
Under s. 2(h) of the Sales-Tax Act 'sale' bas been defined as
follows :
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"In this Act, unless there is anything repugnant in the
subject or context,-
(h) "sale" means any transfer of property in goods other
than goods specified in Schedule C for cash or deferred payment or other valuable consideration, but does
not include a mortgage, hypothecation,
charge
or
pledge.
Explanation-( 1) A transfer of goods on hire-purchase
or other instalment system of payment shall, notwithstanding
that the seller retains a title to ·any goods as security for
payment of the price, be deemed to be a sale."
In the Food Act "sale" has been defined as under :
"In this Act unless the context otherwise requires-
"sale" with its grammatical variations and cognate expressions means the sale of- any article of food whether for
cash or on credit or by way of exchange and 'whether by
wholesale or retail, for human consumption or use, or for
analysis, and includes an agreement for sale, an offer for
{I) 20 S.T.C, t.
(2) [1972j 2 S,C,R, 937,
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SUPREME COURT REPORTS
[1976] 2 s.c.R.
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sale, the exposing for sale or having in possessi:on for sale of
any such article, and includes also an attempt to sell any such
article."
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A comparative study of the above-quoted definitions would show
that the connotation of "sale" for purposes of the Food Act is far
wider than the meaning assigned to it in the Sales-tax Act. While under
the Food Act "sale" would include a mere "offer for sale", "exposing
for sale" or having in "possession for sale", under the Sales-tax Act,
the transfer of property in the goods, except where it falls within the
Explanation, is an essential feature of "sale".
F urthe.r, the legislature
has advisedly left the word "sale" occuring in the first part of the definition under the Food Act to be interpreted in its widest amplitude.
According to the Oxford Dictionary "sale" means "action or an act of
making over to another for a price", "the exchange of a commodity
for money or other valuable consideration'', "disposal of goods
for
mone.y''.
It will be seen that the definition of 'sale' in s. 2(xiii) of the Food
Act with which we are concerned, is wider even than its dictionary
meaning.
The object of assigning so extensive a meaning to the term
'sale' appears to be to bring within the ambit of the Food Act all
commercial transactions whereunder an adulterated article of food is
supplied for consumption by one person to another.
In the context
of .the Food Act, therefore, the term 'sale' has to be construed according to the "mischief rule" enunciated in Heydon's case.
As pointed
out by this Court in Municipal Corporation of Deihi v. Shri Kacheroo
Mal (1), wherever possible, without unreasonable stretching or straining, the language of this statute should be construed in a manner which
would suppress the mischief, advance the remedy, .promote its object,
prevent its subtle evasion and foil its artful circumvention.
The object of the Sales-tax Act is to 1evy tax on sales or purchases
of certain articles of commerce.
The taxable ewnt under that Act is
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,he sale or the purchase and to constitute a taxable sale or purchase
to use the words of Shelat J. who spoke for the Court in Associated
Hotels Case, supra, "the Revenue has to establish that there was a
sale, ·distinct from the contract of work or service of the property so
passing to the other party." A transaction to attract liability under
the Sales-tax Act, therefore, must be wholly and solely a 'sale' of a
taxable article as a distinct entity. If it is inseparably submerged in
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or amalgamated with a contract for work or services, then it is not
possible to fasten it with liability as a sale under the Sales-tax Act,
much less can such liability be quantified as an item of taxable turnover for the relevant account year.
Such considerations or difficulties do not arise for the purpose of the Food Act.
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The primary object of the Food Act is to prevent, in the interest
of the health of the community, the supply of adulterated foodstuffs.
hy a person as a part of his business activity.
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(!) [1976] 2 S.C.R. 1.
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MUNICIPAL CORP. v. L. N. TANDON (Sarkaria, /.)
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The definitions of the term 'sale' have in terms, been made subject
A
to the context of the respective Acts in which they occur.
Consequently, in judging whether a transaction is a sale or not, due regard
must be had to the purpose, scheme and context of the particular Act
under which the question arises.
The learned Judges of the High
Court appear to have overlooked the important distinction between
the connotation of 'sale' for purposes of the Sales-tax Act and the one
under the Food Act.
B
For the purposes of the Food Act, the broad
test applicable
would be whether the article of food was offered by the hotelier to the
resident customer for a money consideration, it
being
immaterial
whether such consideration was a distinct item or was an inseparable
element of the consolidated charge made by the hotelier for providing,
residential accommodation, services, amenities and food ?
C
The mere fact that the property in the food article does not pass
to the customer before he eats it, does not take it out of the definition
of 'sale" under the Food Act.
Jn the case of food actually consumed,
the property does pass to the customer. In other cases, even when
the resident customer does not eat the food offered to him by the hotelier, such an offer by itself, would be sufficient to constitute a "sale"
D
of that article of food within the contemplation of s. 2(xiii) of the
Food Act.
Mr. Ashok Sen, relying on the observations of this Court in Associated Hotels' case (supra) contends that the true test to be applied
even in a case under the Food Act, is; What was the primary object
of the transaction and the intention of the parties while entering into
it ? It is maintained that the predominant character of the transaction in question was to provide a number of amenities and services to
resident customers ·and that the meals supplied were only incidental
to those· services. In such a case, it is submitted, it cannot be said
that the transaction amounts to a 'sale' of meals as an article of commerce to the customer.
Mr. Sen cites instances of Hospital, Nursing
Home, Coll~ge Hostel, Nursery School, Passenger Airliner, Passenger
Ocean-going Ship where meals are provided to the residents or passengers, as the case may be, as part of the services against a consolidated
charge.
Counsel concedes that if the respondents had been supplying
food to the members of the public who were not residents of' the
Hotel, against charges, from the same kitchen or store from· which
they supplied it to the resident customers
against
a consolidated
charge, that would be hit by the Food Act because in such a case mere
storage of food in the Hotel, would be 'storage for sale' attracting the
penal provisions of the Food Act.
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F
G
It appears to us that the contention cannot be accepted.
We have
already indicated above that for purposes of the Food Act, the mere .
offer of an article of food for a money consideration, irrespective of
whether such consideration is ascertainable, as a distinct item, or is an
H
inseparable element of a consolidated charge for a number of things,
would bring it within the mischief of "sale" under s. 2(xiii)
of the
Food Act.
'
A
B
c
D
105 8
SUPREME COURT REPORTS
[1976] 2 s.c.R.
The test suggested by Mr. Sen is not decisive for the purposes of
the Food Act.
Even so, if such a test is applied consistently with the
object of the transaction and the intention of the parties while_ entering
tion is nevertheless a commercial transaction.
Surely, the dominant
object of the transaction and the intention of the parties while entering
into the transaction in question was to provide against payment, whole
some food for consumption besides residential accommodation
and
services.
Good residential accommodation and good food against one
consolidated charge were the main considerations which must have
weighed with the parties while entering into this transaction.
It is
therefore not correct to say that the supply of food under such a composite transaction entered into between the hotelier and his resident
customer does not amount to supply of food as an article of commerce.
The fact remains that the supply or offer of food to such a customer
is for a money consideration as a part of business, activity, and as such,
constitutes "sale" under the Food Act.
It is true that in pursuance of such a transaction, the bill prepared
by the hotelier is one and j•,1divisible; it is not capable of being proximated or split into charges for food and charges for other amenities.
But ihe fact remains that such a composite bill is prepared after taking
into account the cost 1Jf the meals, also.
The illustrations given by Mr. Sen are not apposite.
Hotel busi~
ness is very different from that of a Hospital or a Nursing Home, or
College Hostel, or Passenger Airliner etc.
Moreover, the question
whether a particular transaction in the context of the Food Act constitutes a sale or not, is largely a question of fact depending on the
circumstances of each case. It is therefore not proper to enunciate
E
any hard and fast rule of universal application on the basis of purely
hypothetical instaμces cited by Mr. Sen.
For the foregoing reasons we would reverse the answer given by
the High Court and hold that the supply or offer of food by a hotelier
to a customer when a consolidated charge is made for residential
accommodation and other amenities, including food, amounts
to
a
F
'sale' of an article of food for the purpose of the Food Act.
G
H
The last submission of Mr. Sen was that this case has been pending for the last 15 years; that the trial Magistrate had acquitted the
respondent not only on the ground that there was no "sale" within the
meanihg of the Food Act but also on the ground that the samples of
the articles in question were not taken in accordance with law in the
presence of Respondent No. 1. It is stressed that the law on the point
was anything but clear and this is not a case where articles of food
were found contaminated or mixed with any deleterious or injurious
substance; but the articles of food being sub-standard, were only technically adulterated under cl. (1) of s. 2 (i) of the Act. In these premises, counsel maintains, the acquittal should not be converted into a
conviction.
Reliance has been placed on this Court's dicta in Food
Inspector
Calicut
Corporation's
case (1)
and M/s.
Bhagwwr
Das Jagdish Chander v. Delhi Administration and anr. (2) in support
of this contention.
(1) [1971] 1 Supp. S.C.R. 271.
(2) [1975] Supp. S.C.R. 30.
I
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r
...
.J
}
-
MUNICIPAL CORP. v. L. N. TANDON (Sarkaria, J.)
1059
Although this last contention is not wholly devoid of force,
we
find it difficult to accept it because the High Court has not recorded
any finding on the merits of these cases. It has maintained the acquittal merely on the ground that the transaction in question did not
amount to "sale" of article of food within the meaning of the Food
Adulteration Act.
The case would therefore have to go back to the
High Court for deciding the appeals on merits;
. Accordingly, we allow these appeals, set aside the judgment of the
High Court and 'remit the cases to it with a direction to dispose them
of in accordance with law. It would be open to the Tespondents to
urge before the High Court all the contentions which are available to
them.
Since the cases are quite old, the High Comt will dispose them
of with utmost expedition.
P.B.R.
Appeabi allowed.
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A
B
c