Delhi HC imposes Rs 2 lakh costs on restaurant associations in case against service charge ban

economictimes.indiatimes.com:

Delhi High Court has imposed total costs of Rs 2 lakh on two restaurant bodies for failing to comply with an order passed in relation to their challenge to the guidelines prohibiting hotels and restaurants from automatically levying service charge on food bills. Justice Prathiba M Singh directed that the costs shall be paid to the Department of Consumer Affairs.

On April 12, the court had directed National Restaurant Association of India and Federation of Hotels and Restaurant Associations of India to disclose the complete list of their members in support of the petitions and also state the percentage of its members who were imposing service charge as a mandatory condition as well as those were willing to make it a voluntary contribution. The petitioners were also asked to state if they had any objection over the term «service charge» being replaced with an alternative terminology such as «staff welfare fund» so as to prevent confusion in the minds of the consumer that the same was not a government levy.

In the order passed on July 24, Justice Prathiba M Singh observed that the petitioners were «in complete non-compliance» of the directions and had filed their affidavits without serving the Centre properly «so as to ensure that the hearing does not proceed» further. «It is evident that the petitioners had to make various compliances.

Neither of the Petitioners have filed the affidavits in terms of the said order,» the court said. «Accordingly, one last opportunity is granted to the Petitioners to properly file these affidavits within four days subject to payment of Rs.1,00,000/- as costs in each of the petitions which shall be paid to the Pay and Accounts Office, Department of Consumer Affairs, New Delhi by way of a