Service charge

CCPA appeals against suspension of Delhi HC over guidelines

The Central Consumer Protection Authority (CCPA) has appealed to the Delhi High Court challenging the July 20 order which suspended new guidelines from the old banning restaurants from adding default service charges to food bills.

The appeal would be taken to the Divisional Bench led by the Chief Justice on August 16.

The upholding of new guidelines from the country’s consumer watchdog on July 20 followed a provocative call from the National Restaurant Association of India (NRAI).

At the final hearing, Judge Yashwant Varma remarked, “Don’t pay. Don’t enter the restaurant. It’s a matter of choice.”

Granting the stay, the court also ordered that information regarding the levy of service charges be displayed on menu cards and also posted in such a way that customers are aware of such charges.

Importantly, the court also clarified that service charges cannot be levied on takeout orders. The NRAI is greatly relieved by the passage of this order, as it has also had a direct negative impact on the human capital employed in commerce.

In its response to the verdict, the NRAI said it has always been firm in its assertion that there is nothing illegal about charging service fees and that it is a very transparent.

“The collection of service charge is a matter of contract and decision of the management. The collection of service charge is displayed at various places in the restaurant. The same is also displayed on restaurant menu cards. Once that the customer places the order after being informed of the terms and conditions, a binding contract arises.No authority can interfere with the binding nature of a valid contract until it is demonstrated and proven to be inadmissible or that it is an unfair business practice,” he said. .

The Central Consumer Protection Authority (CCPA), under the Ministry of Consumer Affairs, has issued guidelines to prevent unfair commercial practices and the violation of consumer rights with regard to hotels and restaurants charging service, stating that the consumer may file a complaint with the National Consumer Helpline (NCH) against such practices.

The CCPA said the consumer can ask the hotel or restaurant concerned to remove the service charge from the amount of the bill. The consumer can also file a complaint against unfair commercial practices with the Consumer Commission.