Mumbai: The Central Mumbai District Consumer Commission has imposed a fine on a restaurant in Mahim for charging a service fee that violated the National Consumer Protection Authority’s 2017 guidelines. The Commission has ordered the establishment to refund the charge along with interest and compensation for poor service.

Incident Details

The issue began when Nagvekar noticed a ₹75.30 "service charge" on her bill and informed the restaurant manager that such charges were prohibited under the Central Consumer Protection Authority’s guidelines. She emphasized that such payments should be voluntary, similar to a tip, and requested its removal. Her request was denied.

Following this, Nagvekar attempted to resolve the issue by emailing the restaurant and sending a legal notice, but received no response. Consequently, she took the matter to the District Commission, seeking both a refund of the service charge and compensation for the inconvenience caused.

Restaurant's Defense

In its defense, the restaurant argued that Nagvekar paid the bill voluntarily and claimed they do not enforce service charges, thus disputing any involvement in unfair trade practices. They also cited Delhi High Court guidelines, suggesting that terms like "staff contribution" could replace "service charge" with a cap of 10% on the food bill. However, they acknowledged that these guidelines were under challenge in the high court.

Consumer Commission’s Ruling

Despite the restaurant’s arguments, the Consumer Commission found the restaurant at fault for service deficiencies, noting that the guidelines were in effect at the time of the incident. The Commission ordered the restaurant to refund the excess amount with 6% annual interest. Additionally, the establishment must pay ₹5,000 to Nagvekar for compensation and litigation costs within 45 days.

Wider Implications

This case highlights the ongoing tension between consumer rights and restaurant practices in India, particularly concerning service charges. As legal disputes over these guidelines continue, both consumers and establishments are awaiting clearer regulations on this contentious issue.