Delhi High Court imposes Rs 1 lakh on restaurant and hotel associations

New Delhi [India], July 27 : The Delhi High Court has passed has directed the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India (FHRAI) to pay Rs 1,00,000 each as costs for complete non-compliance of the directions as per its previous order.
Ministry of Consumer Affairs, Food and Public Distribution, in its official press release on Thursday said that the Delhi High Court passed its order on July 24 to pay the cost for complete non-compliance of the directions as per its order of April 12 this year.
As per April 12 order, the court had directed that both associations shall file a complete list of all their members who are supporting the present writ petitions by April.
“Both the associations shall place their stand and file a specific affidavit on the percentage of members who impose service charge as a mandatory condition in their bills, whether the associations shall have objection in the term service charge being replaced with alternative terminology so as to prevent confusion in the minds of the consumer that the same is not a Government levy such as ‘Staff welfare fund’, ‘Staff welfare contribution’, ‘Staff charges’, ‘Staff welfare charges’, etc and the percentage of members who are willing to make service charge as voluntary and not mandatory, with option being given to the consumers to make their contribution to the extent that they are voluntarily willing subject to a maximum percentage that may be charged,” the order had said.
The restaurant associations were required to do necessary compliance as per the above-mentioned directions. However, neither of the associations filed the affidavits in terms of the said order.
The Court noted that the clear impression that it gets is that the restaurant associations are in complete non-compliance of the April 12 order and had filed the affidavits without serving the respondents properly so as to ensure that the hearing does not proceed before the Court.
The Court granted one last opportunity to properly file these affidavits within four days subject to payment of Rs1,00,000 as costs in each of the petitions which shall be paid to the Pay and Accounts Office of Department of Consumer Affairs in New Delhi through a demand draft. Non-compliance with this direction will result in the affidavits not being taken on record.
The matter is now scheduled for hearing on September 5.
It may be mentioned that a number of consumers have complained against forceful collection of service charge on the National Consumer Helpline (NCH). Since the guidelines issued by the CCPA in July, 2022, more than 4,000 complaints have been registered highlighting forcing consumers to pay service charge involuntarily even when they are dissatisfied with the service provided by the restaurant or hotel, making payment of service charge mandatory and portraying service charge as a charge which is levied by or has the approval of the government.
It also includes embarrassing and harassing consumers including by bouncers in case they resist paying service charge and charging exorbitant amount of money in the name of such charge as 15 per cent and 14 per cent etc.