Rs 25,000 Penalty On Restaurant For Forcing Service Charges: Illegal, Says Court


Rohit Kulkarni

Rohit Kulkarni

May 04, 2024


A Mumbai restaurant was fined a compensation of Rs 25,000 to one of its customers after it imposed a compulsory 5% service charge on its bills.

Rs 25,000 Penalty On Restaurant For Service Charges: Illegal, Says Court

The Curious Case of Cream Centre

It was the Girgaon-based “Cream Centre” owner Prince Cuisines Pvt Ltd. Against which the complaint was filed before a district consumer commission by Yogesh Patki, a lawyer on July 21, 2017.

The commission later ruled against the restaurant and termed the service charge levied on customers as “highly objectionable as well as illegal” and said that “It is the bouquet of additional services that completes the experience of customers who choose to dine in at the restaurant. Building this narrative to collect 5 per cent mandatory service charge from customers is highly objectionable as well as illegal and hence cannot be justified at all.”

As per the order “The restaurant’s act of levying mandatory five percent service charges over and above the food and beverages bills falsely represents that the services are of particular standard, quality, and great as they provide a range of other service including the ambience of the restaurant, air conditioning, crockery, carpets, furniture, staff including waiters for service. that essentially completes the experience of the customers who choose to dine in at the restaurant”.

Restaurant Ordered to Refund Service Charge

Calling the decision to pay a service charge totally personal decision when it comes to the amount of tip and gratuity, the panel has also ordered the restaurant to repay a service charge of Rs 29.

The panel said that “Hotel management has no role in this. It is up to the customer to decide the amount of tip and gratuity”.

Notably, it is not the very first time that such incident has occurred since very recently the Bengaluru court recently ordered online delivery platform Swiggy to pay Rs 5,000 to a customer for failing to deliver ice-cream worth Rs 187.


Rohit Kulkarni
Rohit Kulkarni
  • 1207 Posts

Subscribe Now!

Get latest news and views related to startups, tech and business

You Might Also Like

Business
Dec. 8, 2022

Beat The Burden Of Medical Inflation With A Health Insurance

As disease rates rise and medical technology develops, treatment costs climb. It’s essential to understand that medical costs are not exclusively associated with hospitals. The cost of prescription drugs, diagnostic procedures, ambulance and operating room fees, consultations with doctors, and other costs are also constantly increasing. All of them could put a big strain on […]

Business
Dec. 8, 2022

3 Biggest Changes Of iOS 16.2 Update That Every iPhone User Should Know!

In its latest update Apple said that it is preparing for the iOS 16.2 update for iPhones across the world. Notably, like the previous release, there are a couple of changes coming for the iPhones.  iOS 16.2 Update Release Date So far, Apple has not announced a release date for iOS 16.2 update. Reportedly, the […]

Business
Dec. 8, 2022

300 Microsoft Employees Create Employee Union, First Time Ever: This Is How Microsoft Reacted

Around 300 workers at Microsoft Corp.’s ZeniMax Studios have commenced the process of forming a union which is said to be the first at the software giant in the US.  Here, Microsoft Corp.’s ZeniMax Studios known for popular video games including Skyrim and Fallout. Forming Union In Microsoft Corp Moreover, the quality assurance employees at […]

Business
Dec. 7, 2022

India Beats China In Air Travel Safety: Ranking Jumps From 102 To 48 In Global Aviation Safety

India’s air safety protocols and executions have improved drastically over the years, as validated by the findings of a specialized agency of the United Nations, the International Civil Aviation Organization or ICAO. The UN watchdog has upgraded India’s ranking in terms of aviation safety to the 48th position, jumping past the rankings of countries like […]

Recent Posts

Related Videos

   

Subscribe Now!

Get latest news and views related to startups, tech and business

who's online