Delhi High Court to Hear Restaurant Bodies' Plea on Service Charge Ban

The Delhi High Court will review petitions from restaurant bodies challenging a ruling that prohibits mandatory service charges on food bills. The legal bodies argue the decision affects consumer interests and question the jurisdiction of the Central Consumer Protection Authority guidelines, which banned the charges.

The Delhi High Court has scheduled a May 9 hearing for petitions from restaurant organizations contesting an order against compulsory service charges on food bills. This legal review seeks to address challenges to the Central Consumer Protection Authority's (CCPA) guidelines.

The National Restaurants Association of India (NRAI) and the Federation of Hotel and Restaurant Associations of India have taken their grievances to the court. They argue that the mandatory service charges, which are stated on menu cards, do not qualify as unfair trade practices under the Consumer Protection Act, 2019.

A March 28 single judge ruling had dismissed their objections to the CCPA's directives, emphasizing that the charges undermine consumer welfare and enforce dual burdens on consumers by adding Goods and Services Tax on top. The upcoming court review will examine the limits of the CCPA's authority and the legality of service charges.

(With inputs from agencies.)