The District Consumer Disputes Redressal Commission, Jalandhar, has held that the levy of mandatory service charges by a restaurant without obtaining the customer’s prior consent amounts to an unfair trade practice, directing the restaurant to refund the amount collected and pay compensation for mental harassment.
The complaint was filed by an advocate who alleged that a restaurant charged 3% as service charge on his food and liquor bills without his consent. He further claimed that despite informing the restaurant that his family comprised three adults and one minor child, buffet charges were levied for four adults, and that his objections were met with misbehaviour by the staff.
The restaurant defended the levy by contending that the amount represented “staff contribution”, that the policy was displayed on its menu card, and that such charges would have been waived had the customer objected. It also relied on interim orders of the Delhi High Court concerning service charges and expressed willingness to refund the amount of ₹151.53 collected under the two bills.
The Commission observed that while the restaurant sought to justify the levy as “staff contribution”, the bills expressly described the amount as service charges, and there was no evidence to show that the complainant had been informed beforehand or had consented to their mandatory payment. It held that merely referring to menu disclosures or pending litigation could not substitute the requirement of obtaining clear and informed consent from the consumer.
However, the Commission declined to accept the complainant’s allegations regarding misbehaviour by the staff, substandard quality of food, and wrongful charging of buffet fees for a minor child, observing that these claims were unsupported by independent evidence and would require detailed adjudication beyond the scope of summary consumer proceedings.
Partly allowing the complaint, the Commission directed the restaurant to refund ₹151.53 collected as service charges with interest from the date of filing of the complaint and pay ₹15,000 towards compensation and litigation expenses, holding that charging mandatory service charges without the consumer’s consent constitutes an unfair trade practice.
