The Central Consumer Protection Authority (CCPA) has taken suo motu cognizance in the wake of non-refund of service charges by five restaurants in Delhi, the Consumer Affairs Ministry said Tuesday.
In a statement, the ministry said action was being taken against “Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation for failing to refund mandatory service charges despite judgment held by Hon’ble High Court of Delhi. Notices have been issued under the Consumer Protection Act, 2019, directing the restaurants to refund the service charge amounts.”
“This measure is aimed at reducing the undue pressure on Consumers to pay additional amount at the time of availing services at any Restaurant as no Hotel or Restaurant shall force a consumer to pay Service Charge or Service Charge shall not be collected from consumers by any other name,” the statement added.
The authority’s action comes after the Delhi High Court upheld the CCPA guidelines on service charges last month. On July 4, 2022, CCPA had issued guidelines seeking to curb unfair trade practices and protect consumer interests in connection with service charges in hotels and restaurants. As per the guidelines, no hotel or restaurant shall add service charges to the food bill by default.
“Subsequently, it came to notice…through complaints received on the National Consumer Helpline (1915), that grievances had been registered alleging that certain restaurants continued to impose a mandatory service charge without obtaining prior consent from consumers, thereby disregarding consumer rights and indulged in unfair trade practices as per the Consumer Protection Act, 2019,” the ministry’s statement said.
CCPA was established under section 10 of the Consumer Protection Act, 2019. Its primary mandate is to regulate matters related to the violation of consumer rights, unfair trade practices, and false or misleading advertisements that are detrimental to the interests of the public and consumers at large.
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