CCPA Moves Appeal Against Delhi HC Over Stay On Restaurant Guidelines

The Central Consumer Protection Authority (CCPA) has appealed a July 20 order in the Delhi High Court, which overturned CCPA's new guidelines banning restaurants from adding service charges to meals by default. The complaint is scheduled to be heard in the Chief Justice's office on August 16th.

The repeal of the country's new consumer control guidelines on 20 July follows a challenge from the National Restaurant Association of India (NRAI). In granting the stay, the court also ordered that information about how service charges were billed should be displayed on menu cards, etc. so that customers would be aware of the charges. Importantly, the court also clarified that service charges cannot be applied to takeout orders, much to the relief of NRAI because in the alternate situation, it will have a direct negative impact on the human capital engaged in trading.

In its response to the ruling, NRAI said it has always been adamant that charging for services is not illegal and is a very transparent system. “Service charge collection is posted throughout the restaurant. The same is displayed on restaurant menus. Accepting the Terms and Conditions and placing an order by the customer constitutes a binding contract. No authority can interfere with the binding force of a valid contract unless it is shown and proven to be an unscrupulous or unfair trade practise," the statement read. 

The Central Consumer Protection Authority (CCPA), under the Ministry of Consumer Affairs, issued guidelines for preventing unfair trade practises and violation of consumer rights with regard to the hotels and restaurants levying service charge. It was stated that the consumer may lodge a complaint with the National Consumer Helpline (NCH) against such practise.