The Central Consumer Protection Authority (CCPA) has taken suo moto cognizance against five prominent restaurants in Delhi—Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation—for continuing to impose mandatory service charges in violation of established consumer protection norms. The action follows multiple complaints received through the National Consumer Helpline (NCH 1915).
Despite clear directions from the Hon’ble High Court of Delhi, these restaurants allegedly failed to refund service charge amounts levied without consumer consent. In response, the CCPA has issued notices under the Consumer Protection Act, 2019, demanding an immediate refund of these charges to affected consumers.
Violation of Consumer Rights
The CCPA’s move aims to reinforce its stand that no restaurant or hotel can compel a consumer to pay service charges. According to the authority, the continuation of such practices not only defies judicial orders but also constitutes an unfair trade practice, thereby violating consumer rights protected under the 2019 Act.
“Consumers cannot be forced to pay extra in the name of service charge. Any attempt to do so without clear, informed, and voluntary consent is a violation of their rights,” the authority stated.
ALSO READ: India’s Mobile Libraries: How Horses, Vans & Carts Are Delivering Books to Every Corner
Background: CCPA Guidelines and Legal Standing
On July 4, 2022, the CCPA issued comprehensive guidelines stating that:
- No service charge shall be added automatically to the food bill.
- No collection of service charge shall be done under any other name.
- Consumers must be clearly informed that service charge is voluntary.
- No denial of service should occur if the consumer refuses to pay the charge.
- GST must be levied only on the food bill, excluding any voluntary tip.
These guidelines were later upheld by the Delhi High Court on March 28, 2025, confirming the authority of the CCPA to regulate unfair trade practices related to service charges.
Central Consumer Protection Authority: Mandate and Responsibility
Established under Section 10 of the Consumer Protection Act, 2019, the CCPA is empowered to protect the rights of consumers, regulate deceptive practices, and take action against misleading advertisements. The latest action demonstrates the authority’s proactive approach to ensuring compliance with consumer laws and holding violators accountable.
The CCPA has urged consumers to report such violations promptly via the National Consumer Helpline (1915) and reiterated that service charges are not mandatory and must remain entirely at the consumer’s discretion.