Kukatpally’s Iron Hill Brewery accused of charging above MRP, adding service charges

Hyderabad: Iron Hill Brewery in Kukatpally here has been accused of overcharging customers, failing to adhere to metrology standards and levying unlawful charges.

The RTI and anti-corruption activist Ananda Varma listed a number of the alleged violations of legal metrology and consumer protection laws in a letter addressed to chief minister A Revanth Reddy, the minister of Consumer Affairs, and the controller of Legal Metrology.

Here are the key allegations the establishment, located on the fifth floor of PNR Empire, HMT Sathavahana Nagar, has been accused of:

1. Overcharging for packaged water

The activist said that the restaurant is allegedly charged Rs 60 for a 1-liter Aquafina water bottle, while the printed MRP was Rs 20. This is in direct violation of Section 18(2) of the Legal Metrology Act, 2009, which states: “No dealer shall sell any pre-packaged commodity at a price exceeding the retail sale price thereof.”

2. Discrepancies in peg measures

Under Section 8(3) of the Legal Metrology Act, 2009, it is mandated that standard weights and measures must be used to ensure customers receive accurate quantities. The complaint alleged that the bar failed to comply with these standards.

3. Levying service charges without consent

According to Section 2(42) of the Consumer Protection Act, 2019, the imposition of a service charge without a customer’s consent is considered an unfair trade practice. Additionally, GO 9, issued on May 29, 2017, by the Telangana Consumer Affairs Department, explicitly prohibited mandatory service charges in hotels and restaurants.

4. GST on MRP

The activist further alleged that GST was charged on the MRP of the water bottle, violating both legal metrology rules and GST laws, which prohibit additional taxes on packaged goods sold at MRP.

Lack of accountability in grievance redressal

Ananda Varma criticised the lack of a grievance redressal mechanism in the Legal Metrology Department. “There is no proper system to address public complaints or to provide updates on action taken. Citizens are left in the dark,” he said speaking to Newsmeter. He urged the department to improve transparency by sharing action-taken reports with complainants.

The following actions were requested by the activist in the letter:

Inspection and penalisation: Direct the Legal Metrology Department to inspect Iron Hill Brewery, book cases and impose penalties for violations of the Legal Metrology Act and Consumer Protection Act.

Public accountability: Provide the action-taken report to the complainant to ensure transparency.

Involvement of police: Take action under the Indian Penal Code for breach of trust (Section 316) and cheating (Section 418).

“Charging mandatory service fees, overpricing packaged goods and tampering with measures are clear breaches of the law. These practices must be curbed to protect consumer rights,” Ananda Varma stated.

Relevant legal provisions

Legal Metrology Act, 2009:

- Section 18(2): Prohibits selling pre-packaged commodities at a price higher than the MRP.

- Section 8(3): Ensures standardised weights and measures in trade to protect consumers.

Consumer Protection Act, 2019:

- Defines the imposition of unauthorised charges as an unfair trade practice.

- Empower consumers to seek redressal for such grievances.

3. GO 9 (2017): Specifically prohibits hotels and restaurants from charging a mandatory service charge without the customer’s consent.

Call for public awareness

Varma concluded by urging authorities to take swift action to set a precedent for compliance and consumer protection. “Such practices undermine public trust and exploit their hard-earned money. Strong enforcement is the need of the hour,” he remarked.

Despite efforts to contact Iron Hill Brewery for their response to these allegations, the establishment has not issued a statement as of now. The outcome of the complaint is awaited.