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Synopsis

The Central Consumer Protection Authority (CCPA) has filed an appeal in the Delhi High Court challenging the High Court’s order to stay guidelines restraining restaurants from levying service charges automatically on food bills, reports ANI.

The appeal is scheduled to be heard by a division bench of Chief Justice Satish Chandra Sharma and Justice Subromonium Prasad on August 16.

Last Month, the bench of Justice Yashwant Varma stayed the Ministry of Consumer Affairs guidelines prohibiting hotels and restaurants from levying service charges on food bills.

The order was passed in petitions filed by the National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India challenging the Central Consumer Protection Authority (CCPA)' guidelines.

The single-judge bench, while passing the interim order, directed that the information that the restaurant levies service charge must be displayed prominently for the knowledge of the customers.

The bench further stated that the customers have a choice to not go to a restaurant if they do not wish to pay the service charge.

Court further ordered the restaurants to ensure that service charge is not levied on takeaway orders and took note of the undertaking for it by the members of NRAI.

The guidelines by CCPA from July 4, 2022, stipulate that restaurants or hotels cannot automatically levy service charges on food bills. It further stipulates that the objective behind the provision is to prevent violation of consumer rights.

According to the guidelines, service charges cannot be levied under any other name either and customers cannot be forced to pay the same. Service charge is voluntary and may be paid at discretion by the customer and the same shall be informed to restaurant-goers, the guidelines stipulate.