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CCPA Enforces Delhi HC Ruling, Targets Five Restaurants Over Service Charge Violations

The consumer watchdog issues notices demanding refunds after eateries fail to comply with court-backed guidelines prohibiting mandatory service charges.

The guidelines stipulate that no hotels or restaurant shall add service charge automatically or by default in the food bill.
Image
On March 28, a bench of justice Prathiba M Singh reinforced the guidelines issued by the Central Consumer Protection Authority (CCPA) in 2022. (Representative photo)
In March this year, the Delhi high court upheld the CCPA guidelines on service charges. (HT ARCHIVE)

Overview

  • The Central Consumer Protection Authority (CCPA) has issued notices to five Delhi restaurants for failing to refund mandatory service charges despite a Delhi High Court ruling on March 28, 2025.
  • The notices, issued under the Consumer Protection Act, 2019, direct the restaurants to refund collected service charges and comply with guidelines that mandate service charges be voluntary.
  • The restaurants named include Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation, which were found to have continued unfair trade practices after consumer complaints.
  • The Delhi High Court upheld the CCPA's 2022 guidelines, which prohibit automatic or disguised service charges and require clear disclosure of their voluntary nature.
  • Restaurant associations, including NRAI and FHRAI, have appealed the High Court's decision, with the next hearing scheduled for May 9, 2025.