2022 (7) TMI 970

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....for R-1. ORDER Notice. Since the respondents are duly represented by learned counsels, let a reply be filed within a period of eight weeks from today. 2. Prima facie, the Court finds merit in the challenge raised to the Guidelines which have been issued by the Central Consumer Protection Authority [CCPA]. 3. In order to evaluate the challenge which has been addressed, the Court firstly take note of the following recitals as appearing in the impugned guidelines dated 04 July 2022:- "3. It has come to the notice of the CCPA through many grievances registered on the National Consumer Helpline that restaurants and hotels are levying service charge in the bill by default, without informing consumers that paying such charge is voluntary and....

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.... levying of service charge, the CCPA issues the following guidelines - (i) No hotel or restaurant shall add service charge automatically or by default in the bill. (ii) Service charge shall not be collected from consumers by any other name. (iii) No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that service charge is voluntary, optional and at consumer‟s discretion. (iv) No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers. (v) Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount." 5. The Court notes that the issue of a levy of a service charge by....

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....o bears in mind the decisions rendered by the NCDRC in Nitin Mittal vs. Pind Balluchi Restaurant [2012 SCC OnLine NCDRC 444] where while dealing with a challenge to the levy of service charge, the Commission had held as follows:- "4. The learned counsel for the petitioner instead of touching the heart of the problem, just skirted it. It is now well established that consumer courts on the issue of pricing do not interfere in such matter as it is the discretion of the concerned restaurant to charge the price of the items as they wish. In fact it is the proposal from their side to the customers to accept the same or not. It is a contractual matter between the parties-one proposes and the other accepts. Consumer courts on both the counts cann....

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....ion in general or obstruct the flow of capital or resources into the stream of competition or flow of supplies in the market relating to goods or services in particular. Rather in absence of the aforesaid practice being universally followed, the customer has ample choice to select any one of the restaurants he would like to visit. Much can be said about the contention of the complainant that the kind of facilities like maintenance of hygienic conditions, provision of toilet tissues, hand dryers and others are separately accounted for while arriving at the profit of the restaurant. It is also true that such like facilities are offered by many restaurants but one needs to remember that it is for the trader to decide how to manage its business....