The Delhi High Court fined two restaurant organizations a total of Rs 2 lakh in costs for disobeying a directive it issued in response to their challenge of the rules that forbid hotels and restaurants from automatically adding a service charge to meal bills. Justice Prathiba M. Singh ordered that the Department of Consumer Affairs get payment for the charges.
The National Restaurant Association of India and the Federation of Hotels and Restaurant Associations of India were ordered by the court on April 12 to provide the complete list of their members in support of the petitions as well as the percentage of their members who were imposing service charges as a requirement as well as those who were willing to make a voluntary contribution.
In order to clarify to the consumer that the fee was not a tax, the petitioners were also asked to declare whether they objected to the phrase “service charge” being substituted with another term, such as “staff welfare fund.”
The petitioners were “in complete non-compliance” with the orders, according to Justice Prathiba M. Singh’s ruling from July 24, and they had filed their affidavits without properly serving the Centre “so as to ensure that the hearing does not proceed.”
“It is clear that the petitioners had to comply with a number of requirements. The court stated that none of the petitioners had submitted the affidavits required by the impugned order.
The court ruled that the petitioners were given one final chance to properly file these affidavits within four days, but they had to pay Rs. 100,000 as costs in each of the cases, which had to be sent by demand draught to the Pay and Accounts Office of the Department of Consumer Affairs in New Delhi.
The two petitioner organizations had filed two separate petitions with the high court last year in an effort to overturn the rules that forbid hotels and restaurants from automatically adding a service charge to meal bills.
The affidavits shall not be taken on record without the cost being deposited, the court made clear.
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According to additional solicitor general Chetan Sharma, there have been nearly 4,000 more consumer complaints concerning service charges levied by the petitioners and their associates.
They have contended that the CCPA order is capricious, flawed, and needs to be overturned.
In its counter affidavit, the CCPA requested that the petitions be dismissed, claiming that the petitioners had completely failed to understand the rights of the customers whose hard-earned money was being unfairly taken automatically or by default under the guise of a service charge.
