Centre, Consumer Protection Authority move Delhi HC for vacation of stay on order prohibiting restaurant service charges
Aug 31, 2022
New Delhi [India], August 31 : The Central Government and the Central Consumer Protection Authority (CCPA) on Wednesday moved a plea in the Delhi High Court seeking a vacation of the stay on the guidelines prohibiting levying of service charges on consumer's bill by hotels and restaurants.
Justice Yashwant Varma listed the application for hearing on October 6.
The bench had on July 20 stayed the guidelines issued on July 4 by CCPA. This order was challenged by the restaurant body. Thereafter the stay order was challenged before the division bench and the authorities were asked to approach the single judge for relief.
During the hearing on Wednesday, a bench of Justice Yashwant Varma was informed that the Centre and CCPA have filed their counter affidavits on the petitions challenging a move by the National Restaurant Association of India (NRAI) and Federation of Hotels and Restaurant Associations of India.
The court asked the counsel for the two authorities to bring the documents on record after which the petitioners may file their replies to the application.
The counsel for the authorities had argued before the division bench that the stay order was passed by the single judge without giving them an opportunity to file their reply on the petition against the guidelines.
The guidelines for the ban were issued after several complaints were received from consumers.
The High court while issuing the notice on another petition by the Federation of Hotels and Restaurants of India (FHRI) had set down conditions that the restaurants prominently display service charge component in the price of the food.
Restaurants will not charge service charges on takeaway/delivery of food, the High court had said.
The counsel had also said that various complaints were received that restaurants were restraining consumers who were not paying the service charge.
HC said, "It is a matter of choice. Don't enter the restaurant if you don't want to pay."
The petition moved by FHRI stated that CCPA can only issue guidelines. The latest guidelines restraining levying of service charge is arbitrary.
Earlier the guidelines were challenged by the National Restaurant Association of India (NRAI). These petitions have been fixed for November 25, 2022.
The petitioner restaurant association had contended that the issue of levying service charge was not merely like giving a "tip" and that it pertained to an industry practice governed by the Right to Business under Article 19(1)(g) of the Constitution and has been going on for 70 years.
