Lawyer Awarded ₹15,000 After Restaurant’s Unapproved Service Charge

District Consumer Commission Orders Compensation for Unapproved Service Charge

In a recent decision, the District Consumer Disputes Redressal Commission in Jalandhar mandated a local restaurant to compensate a lawyer with ₹15,000. The compensation was ordered due to the restaurant’s imposition of a mandatory service charge on the lawyer’s bill without his consent. This case, titled Sanjeev Duggal v Maya Inns Pvt. Ltd, highlights the commission’s stance against unfair trade practices.

The complaint was heard by a panel comprising President Harveen Bhardwaj and Members Jyotsna and Jaswant Singh Dhillon. Advocate Sanjeev Duggal, the complainant, reported an incident from November 2023 when he and his family dined at the restaurant. According to Duggal, the restaurant added a 3% service charge, totaling ₹151.53, without prior consent. This was challenged by Duggal as an unfair trade practice.

In its judgment dated June 4, the Commission held the restaurant accountable for the unauthorized service charges. The ruling emphasized that charging service fees without explicit customer consent constitutes an unfair trade practice. “It is proved that the OP (the restaurant) charged service charges not as staff contribution, without obtaining consent from the consumer,” the commission noted. Duggal was thereby entitled to a refund, alongside compensation for mental harassment caused by the incident.

The restaurant defended its actions by claiming that the charge was labeled as a “staff contribution” and was detailed on their menu, asserting that it could be waived if requested. However, the commission rejected this argument, stressing the necessity for transparency and prior disclosure about such charges.

“Even if for the sake of arguments, it is assumed that the terminology ‘staff contribution’ is being used, it is the duty of the restaurant to inform customers about the guidelines and the levy of such charges,” the commission stated. It found no evidence that Duggal was properly informed or had agreed to the charge.

Additionally, Duggal alleged misbehavior by the restaurant staff when he contested the charges and claimed that some buffet items were of substandard quality. However, these claims were not substantiated with evidence such as witness testimonies. Therefore, the commission confined its judgment to the unauthorized service charge.

Consequently, the restaurant was ordered to return the collected service charges amounting to ₹151.53, with interest from the complaint filing date. Furthermore, the restaurant is required to pay ₹15,000 to Duggal, which includes litigation costs. The total relief sums up to ₹15,151.53, excluding interest, which the restaurant must settle within 45 days.

Advocate Sanjeev Duggal represented himself in the case, while Advocate IS Bhatia appeared for the restaurant. This ruling is significant against the backdrop of the Delhi High Court’s endorsement of the Central Consumer Protection Authority’s guidelines last year, which prohibit automatic or default inclusion of service charges by hotels and restaurants. An appeal against the guidelines is currently pending in the High Court.