In a major move to protect consumer rights, India's top consumer protection body has taken strict action against several restaurants across the country. The Central Consumer Protection Authority (CCPA) has initiated legal proceedings against 27 food outlets for illegally imposing a mandatory service charge on customers' bills.
What Action Has the CCPA Taken?
The authority has launched a suo motu case, meaning it acted on its own initiative, against these establishments. This action comes despite clear guidelines issued earlier that prohibit making service charges compulsory. The Delhi High Court has upheld these guidelines, giving them legal weight.
The CCPA has ordered these restaurants to immediately refund the illegally collected service charges to consumers. Furthermore, the authority is investigating formal complaints to decide on further penalties against the violators. The goal is to create a strong deterrent effect, discouraging other restaurants from engaging in this unfair practice.
Fines and Specific Violators Named
Investigations have already led to financial penalties in some cases. At least two restaurants have been fined up to Rs 50,000 each for flouting the rules. The CCPA has also directed all 27 restaurants to modify their billing systems to remove any automatic or mandatory service charge.
During its probe, the CCPA identified specific restaurants that were adding a 10% service charge by default without giving customers a choice. Among those named are Cafe Blue Bottle in Patna and China Gate Restaurant Pvt Ltd (Bora Bora) in Mumbai. Penalties have been imposed in these instances.
Ongoing Vigilance and Consumer Protection
The CCPA has made it clear that its crackdown is not a one-time event. The authority stated it is "closely monitoring complaints received on the National Consumer Helpline regarding levy of service charge." It has vowed to continue taking strict action against any restaurant that fails to comply with the law.
This sustained effort aims to achieve two primary objectives: safeguarding consumer rights and preventing unfair trade practices in the hospitality industry. The CCPA's message is unambiguous - a service charge is entirely voluntary, and consumers have the right to refuse to pay it if it is forced upon them.
