“Restaurants Can’t Force Customers To Pay Service Charge”: Delhi HC

Delhi High Court

The Delhi High Court on Friday ruled that payment of service charge by customers at restaurants and hotels is voluntary and cannot be imposed as a mandatory charge on food bills.

Court Upholds Consumer Rights

Justice Prathiba M Singh, who delivered the judgment, dismissed the petitions filed by restaurant associations challenging the Central Consumer Protection Authority (CCPA) guidelines. These guidelines prohibit restaurants and hotels from automatically adding a service charge to customers’ bills.

The court reaffirmed that customers have the right to decide whether or not to pay a service charge, reinforcing the principle that such charges cannot be enforced without consent.

Background of the Case

The restaurant bodies had challenged the CCPA’s directive, arguing that the service charge was a standard industry practice and a way to ensure fair wages for staff.

The CCPA, however, maintained that the automatic addition of service charge violated consumer rights, as customers should not be forced to pay extra fees beyond the listed price of food and applicable taxes.

Impact of the Ruling

With this ruling, restaurants and hotels can no longer levy a compulsory service charge. Instead, they may request customers to pay it, but the decision remains at the discretion of the consumer.

This judgment is seen as a win for consumer rights and ensures that customers are not burdened with hidden charges when dining out.