CCPA challenges Delhi HC's stay on service charge norms for hotels
Aug 11, 2022
New Delhi [India], August 11 : The Central Consumer Protection Authority (CCPA) has moved an appeal in the Division Bench of Delhi High Court challenging the court's decision to stay the recent guidelines issued by the government, restraining the levy of service charge on food bills by restaurants and hotels.
The appeal moved by CCPA is scheduled to come before the division bench headed by Chief Justice of Delhi on August 16.
Last month the Delhi High Court while issuing notice on the petition challenging the guidelines, had also stayed the operation of guidelines issued by Central Consumer Protection Authority restraining levying of service charge by restaurants and hotels.
Justice Yashwant Varma had issued notice to Ministry of Consumer Affairs, CCPA on the petition moved by Federation of hotels and restaurants of India (FHRI).
The single bench while issuing the notice also set down conditions that restaurants should prominently display service charge components in the price of the food. Restaurants will not charge service charges on takeaway or delivery of food, the High Court said.
The counsel for CCPA had submitted that,"consumers should not be forced to pay." He also said that anything beyond the maximum retail price (MRP) is unfair trade practice. The guidelines were issued to protect the right of the consumer.
The counsel also said that various complaints were received that restaurants were restraining people from entering who were not paying the service charge.
The single bench had said, "It's a matter of choice. Don't enter the restaurant if you don't want to pay."
The petition moved by FHRI has stated that CCPA can only issue guidelines. The latest guidelines restraining levying of service charge is arbitrary.
Another similar petition challenging the new guidelines is also pending before the court. This petition has been moved by National Restaurant Association of India (NRAI).
