Service charge

Center, CCPA asks HC to stay on service charge guidelines for restaurants

The central government and the Central Consumer Protection Authority (CCPA) have filed an application in the Delhi High Court seeking cancellation of the stay over the July 4 CCPA guidelines which prohibited hotels and restaurants from charging service charges on food bills without express consumer consent. .

The Single Judge Bench of the Delhi High Court, headed by Justice Yashwant Varma, has been advised by the Center and the CCPA of the filing of counter affidavits in response to the motion challenging the CCPA guidelines by the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India.

In response, the court asked both authorities to put the documents on file, after which the petitioners can file their responses and scheduled the case for a rehearing on October 6.

Earlier, the Delhi High Court stayed the application of the CCPA guidelines while issuing an opinion on the motion of the Federation of Hotel and Restaurant Associations of India. CACP then challenged the order before the Division Bench to the Single Bench Stay Order. The division bench, however, ordered the authority to approach the single bench to cancel the stay.

Counsel for the Center and CCPA had argued before the Division Bench that 1,000 complaints had been received from consumers since the Single Judge’s order of July 20 and that the Single Judge’s bench order had been passed without surrendering. realize that the guidelines were issued to safeguard the rights and interests of consumers.

In its appeal, the authority said: “The guidelines have been issued to safeguard the rights and interests of consumers and to protect consumers against unfair commercial practices and violation of consumer rights due to the compulsory collection of service charges and the addition of these charges automatically or by default in the food bill without giving consumers the choice or discretion to decide whether or not to pay these charges.

Counsel for Restaurants argued, however, that the issue of charging a service charge was not simply a matter of “tipping” and related to an industry practice governed by the right to undertake in under Article 19(1)(g) of the Constitution and that it has lasted for over 70 years.

The bench observed that restaurants have a legal obligation to pay their employees but the cost cannot be put on the consumer without suspending the single judge’s order.

With contributions from agencies

Catch all the trade news, market news, breaking news and latest updates on Live Mint. Download the Mint News app to get daily market updates.

More less

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

Post your comment