Chandigarh Consumer Court Orders Restaurant to Pay ₹5,000 for Unauthorised Service Charge

The District Consumer Disputes Redressal Commission-II, Chandigarh, has held a Bathinda-based restaurant guilty of deficiency in service and unfair trade practice for levying a service charge of Rs 129 without obtaining the customer's consent.

In an order dated June 19, the bench, comprising President Amrinder Singh Sidhu and member B M Sharma, observed that automatically adding and collecting a service charge without the consumer's agreement amounts to a deficiency in service and constitutes an unfair trade practice under the Consumer Protection Act.

The complainant, a High Court advocate, visited the restaurant on October 5, 2023. The restaurant issued two bills—one for Rs 2,291 and another for Rs 1,191—and added service charges of Rs 79 and Rs 49.9 respectively, totalling Rs 129, without prior information or consent. The complainant alleged that the restaurant refused to remove the charge despite his objection.

He argued that the Central Consumer Protection Authority (CCPA) guidelines issued on July 4, 2022, clearly state that service charge is optional and voluntary. It cannot be imposed forcibly, added automatically to the bill, or collected under any other name. The automatic levy violates these guidelines.

The restaurant failed to appear before the commission despite receiving notice and was proceeded against ex parte. The commission noted that this absence warranted an adverse inference, leaving the complainant's evidence unrebutted.

“The OP did not appear to contest the claim of the complainant and preferred to be proceeded ex-parte. This act of the OP draws an adverse inference against it. The non appearance of the OP shows that it has nothing to say in its defence against the allegations made by the complainant,” the order read.

The commission observed that the restaurant had not produced any evidence to justify the levy of service charge, nor did it prove that the complainant voluntarily agreed to pay it. “The consumer cannot be compelled to pay any amount over and above the price of goods and services availed unless the same is legally permissible and duly disclosed,” the commission ruled.

Finding the restaurant guilty of deficiency in service and unfair trade practice, the commission directed it to refund the Rs 129 collected as service charge and pay a lump sum of Rs 5,000 towards compensation for harassment and litigation expenses. The order must be complied with within 45 days of receiving its certified copy.

The ruling reinforces that restaurants cannot automatically add service charges to bills without the customer's prior knowledge and explicit consent. Service charges remain voluntary, and in the absence of proof of consent, restaurants risk being ordered to refund the amount along with compensation.