Delhi HC stops 'no service charge order' on restaurants
Premium- Delhi HC stays guidelines prohibiting automatic levying of service charge by restaurants.
The Delhi High Court on Wednesday stayed the recent guidelines prohibiting hotels and restaurants from levying service charge automatically on food bills.
Recently, the Centre dealt a blow to restaurateurs across the country with the Central Consumer Protection Authority (CCPA) disallowing them from adding a service charge to food bills. As per the CCPA, the latest guidelines aim to prevent unfair trade practices that violate consumer rights.
Hotels or restaurants shall not force a consumer to pay service charge and shall clearly inform the consumer that service charge is at the consumer’s discretion and there will be no restriction on entry to a customer on this basis, CCPA said in its guidelines.
However, on Wednesday, Justice Yashwant Varma, while dealing with petitions by the National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India said the issue requires consideration and directed the authorities to file their reply.
The court said that the stay is subject to the members of the petitioners ensuring that the levy of service charge in addition to the price and taxes and obligation of customer to pay the same is duly and prominently displayed on the menu or other places.
Further, the members will also undertake not to levy service charge on any take-away items, it added.
“If you don't want to pay, don't enter the restaurant. It is ultimately a question of choice. I have stayed the para 7 guidelines subject to these two conditions," the court said.
The court listed the matter for further hearing on November 25.
The NRAI has claimed in the petition that CCPA's July 4 order was “arbitrary, untenable and ought to be quashed" as it has been issued without appreciation of the facts and circumstances.
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