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The HC upheld CCPA guidelines prohibiting mandatory service charges by restaurants, dismissing the petitioners' challenge. The Court determined that CCPA possesses statutory authority under CPA 2019 to issue binding guidelines protecting consumer interests. Mandatory service charges constitute an unfair trade practice and create unfair contracts since consumers have limited bargaining power against restaurant establishments. The Court applied the doctrine of proportionality, finding the restriction on restaurants' rights constitutional as it serves the larger consumer interest. The judgment confirmed that service charges cannot be compulsory, and consumers must retain discretion regarding payment, even when charges are displayed on menu cards.
The HC upheld CCPA guidelines prohibiting mandatory service charges by restaurants, dismissing the petitioners' challenge. The Court determined that CCPA possesses statutory authority under CPA 2019 to issue binding guidelines protecting consumer interests. Mandatory service charges constitute an unfair trade practice and create unfair contracts since consumers have limited bargaining power against restaurant establishments. The Court applied the doctrine of proportionality, finding the restriction on restaurants' rights constitutional as it serves the larger consumer interest. The judgment confirmed that service charges cannot be compulsory, and consumers must retain discretion regarding payment, even when charges are displayed on menu cards.
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