Winning Bizness Desk

Mumbai. The Central Consumer Protection Authority (CCPA) has taken suo motu action against five restaurants in Delhi for continuing to levy mandatory service charges despite a clear ruling from the Delhi High Court. The restaurants served notices include Makhna Delhi, Zero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation. The CCPA stated that these eateries failed to comply with existing guidelines and legal directives by not refunding the service charge collected from customers.

Notices Issued for Violation of Consumer Law

The regulatory body has issued notices to these restaurants under the Consumer Protection Act, 2019, directing them to refund the charged amount to affected consumers. The Ministry of Consumer Affairs clarified that this move aims to relieve consumers from undue financial pressure while availing services at hotels and restaurants. Authorities reiterated that levying a service charge without explicit consumer consent constitutes an unfair trade practice.

Guidelines Clearly Prohibit Default Charges

Back in 2022, the CCPA had issued detailed guidelines to prevent exploitative practices involving service charges in the hospitality sector. According to the guidelines, no restaurant or hotel can add a service charge by default or automatically include it in the bill. Furthermore, they cannot collect this charge under any alternative label or term, nor can they compel a customer to pay it.

Voluntary Nature of Service Charges Emphasized

The CCPA guidelines explicitly state that customers must be informed that paying a service charge is entirely voluntary, optional, and subject to individual discretion. The aim is to ensure transparency in billing and protect consumers from deceptive pricing tactics. Restaurants are expected to comply by disclosing this policy clearly to all patrons at the point of sale.

Complaints Continue Despite Court Verdict

On March 28, 2025, the Delhi High Court upheld the CCPA's guidelines, reaffirming that service charges cannot be enforced. However, the authority continued to receive complaints on the National Consumer Helpline (1915) indicating that several restaurants still imposed such charges without prior consent. This prompted the CCPA to take immediate action to safeguard consumer interests and uphold the law.

Key Highlights

1. CCPA acts against 5 Delhi restaurants for charging mandatory service fees.

2. Notices sent to Makhna Delhi, Zero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation.

3. Restaurants directed to refund service charge amounts.

4. 2022 guidelines ban default or disguised service charges in food bills.

5. Consumers must be informed that service charge is voluntary.

6. Delhi HC upheld CCPA’s guidelines on March 28, 2025.

7. Complaints on helpline reveal ongoing violations, prompting fresh action.