Elite clubs can charge extra for ambience

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Recently Delhi High Court granted relief to the elite Delhi Gymkhana Club by deciding that it was allowed to sell beverages and refreshments to customers at a price higher than the maximum retail price (MRP) of food and beverages. The ruling came after a writ was filed by the club, challenging a notice issued to it by a consumer court on a petition from a club member, Harish Tripathi.

Tripathi had alleged that the club was illegally charging more than MRP for a bottle of water or a soft drink even though the club’s members paid a monthly membership fee. Allowing the club’s petition, Justice Geeta Mittal said, “Consumption of any refreshment or beverage by a member or a guest at a club would not bring him within the definition of the consumer’’, thereby quashing the proceedings before the consumer court and its notice against the club in 2006.

Citing previous judgments, the judge held that “the service rendered by the club in making available to its members/guests food items and beverages, packaged or in any other form for their convenience and consumption in a comfortable atmosphere provided at the premises of the club cannot be treated as a ‘sale’,’’ since a customer was not just consuming a drink but was also enjoying other facilities such as air conditioning, interior decoration and other elements of the club premises.

The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in, lbhasin@vsnl.com or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.