The Delhi High Court has imposed a ₹1 lakh fine on restaurant associations that challenged the Central Consumer Protection Authority (CCPA) guidelines prohibiting mandatory service charges. The court ruled that restaurants cannot levy service charges on food bills, adding that such a practice violates the Consumer Protection Act.
Upholding the validity of the CCPA guidelines, the court reaffirmed that restaurants cannot add service charges to bills. The CCPA had previously directed restaurants to refrain from including service charges without consumer consent to ensure transparency in billing.
The Federation of Hotels and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India (NRAI) filed two separate petitions, challenging the guidelines issued by the CCPA on July 4, 2022.
Later that month, the Delhi High Court stayed the implementation of the guidelines. FHRAI’s counsel argued that the CCPA lacked the authority to impose such a ban without adhering to the principles of natural justice.
