NEW DELHI: While dealing with the Central Consumer Protection Authority (CCPA)’s plea in relation to the service charge issue of eateries, the Delhi High Court on Tuesday said that restaurants should raise the salaries of the employees if they were concerned about their staff.
A division bench of Chief Justice Satish Chander Sharma and Justice Subramonium Prasad was hearing the appeal of the Central Consumer Protection Authority (CCPA) challenging the July 20 stay order on its new guidelines restraining restaurants from adding a service charge by default to food bills.
The court also asked whether consumers be forced to pay a service charge. The common man can feel the service charge as imposed by the government is like a tax, the bench said. The matter will be further heard on August 18.
The stay of the fresh guidelines of the country’s consumer watchdog on July 20 was following the challenging plea of the National Restaurant Association of India (NRAI). In the last hearing, Justice Yashwant Varma remarked: “Don’t pay. Don’t enter the restaurant. It’s a matter of choice.”
Granting the stay, the court has also directed that the information regarding the levy of service charge should be displayed on menu cards and also otherwise displayed so that customers are aware of this charge.
Importantly, the court also clarified that the service charge cannot be levied on any takeaway orders. NRAI is very relieved with the passing of this order because it otherwise had a direct adverse impact on the human capital employed in the trade.
In its response to the verdict, the NRAI said it has always been steadfast in its assertion that there is nothing illegal in levying of Service Charge and it is a very transparent system. “The levying of service charge is a matter of contract and decision of the management, “ it stated.
Consumer watchdog seeks verdict
A division bench was hearing the appeal of the Central Consumer Protection Authority challenging the stay order on its new guidelines restraining restaurants from adding a service charge by default to food bills