Delhi High Court Fines Restaurant Associations INR 2 Lakh Over Service Charge Disclosure

Delhi High Court Fines Restaurant Associations INR 2 Lakh Over Service Charge Disclosure By Author Published on July 29, 2023 Delhi High Court has imposed a fine of INR 2 lakh on two restaurant associations for their failure to disclose the complete list of members who levy service charges as a mandatory condition and those who do it voluntarily. One of the associations, FHRAI, has already deposited INR 1 lakh with the Department of consumer affairs. The court had directed the associations, FHRAI and NRAI, to disclose the relevant information in support of the petitions challenging the guidelines prohibiting the automatic levying of service charges on food bills. In April, the court ordered the associations to disclose the member list and state the percentage of members imposing service charges mandatorily or voluntarily. The court also inquired if they had any objection to replacing the term 'service charge' with alternatives like 'staff welfare fund' to avoid consumer confusion. However, the associations failed to comply with the directions properly, and the court granted them a last chance to file the affidavits correctly. Union consumer affairs secretary Rohit Kumar Singh confirmed that the fine was paid by the association, and the money was deposited into the Consumer Welfare Fund (CWF). The court's guidelines on service charges came in July 2022, and since then, the National Consumer Helpline received over 4,000 complaints, including instances of forcing customers to pay service charges despite dissatisfaction with the service and using various disguised names for service charge collection.