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Synopsis

An association of restaurant owners on Monday moved the Delhi High Court challenging the Centre’s recent guidelines prohibiting hotels and restaurants from levying default service charge on food bills.

The bench of Justice Yashwant Varma directed the Ministry of Consumer Affairs and CCPA to take instructions on the plea and listed the matter for further hearing on July 20.

The plea filed by the National Restaurant Association of India (NRAI) challenged a July 4 guideline by the Central Consumer Protection Authority (CCPA) which barred hotels and restaurants from levying default service charges on food bills.

The CCPA guidelines also stated what steps consumers can take in case of violation of the guidelines.

The plea seeks to set aside the CCPA guidelines as it is "arbitrary, untenable and ought to be quashed" as they have been issued without an appreciation of the facts and circumstances.

"Levy of service charge has been a standing practice in the hospitality industry for more than 80 years which is evident from the fact that the Supreme Court took notice of this concept way back in 1964…," the plea stated.

The plea further stated that service charges are a common and accepted practice throughout the world and the new guidelines have created unnecessary confusion.

Case Title: NRAI & Ors. v. Union of India & Ors.

[Inputs: TOI]