The Delhi High Court has recently imposed a ₹1 lakh fine on restaurant associations that challenged the Central Consumer Protection Authority (CCPA) guidelines prohibiting mandatory service charges. In a significant ruling, the court stated that restaurants cannot levy service charges on food bills, indicating that such a practice violates the Consumer Protection Act.
Upholding the validity of the CCPA guidelines, the court reaffirmed that service charges cannot be added to bills. The CCPA had previously directed restaurants to avoid including service charges without consumer consent to promote transparency in billing practices.
The Federation of Hotels and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India (NRAI) had filed two separate petitions contesting the guidelines issued by the CCPA on July 4, 2022. However, later that month, the Delhi High Court stayed the implementation of the guidelines. FHRAI’s counsel argued that the CCPA lacked the authority to impose such a ban without adhering to the principles of natural justice.
This ruling underscores the importance of consumer rights and promotes a fair dining experience, ensuring that customers are not obligated to pay additional charges without their explicit consent.