Jalandhar consumer forum orders restaurant to refund service charge, pay Rs 15,000 compensation

Delhi/Jalandhar, June 17 (IANS) The District Consumer Disputes Redressal Commission, Jalandhar, has held that a restaurant’s levy of service charges without obtaining the consumer’s consent amounts to an unfair trade practice and directed it to refund the amount collected along with compensation of Rs 15,000.

The complaint was filed by Sanjeev Duggal, a practising advocate from Phagwara, against Maya Inns Pvt. Ltd. and its directors, following a buffet dinner he had with his family at the restaurant on November 8, 2023.

According to the complaint, Duggal visited the restaurant with three adults and one minor child and was allegedly charged buffet charges for four adults.

He further claimed that the restaurant levied service charges of Rs 128.13 and Rs 23.40 in two separate bills, totalling Rs 151.53, at the rate of 3 per cent. The complainant alleged that when he objected to the service charge and to billing the minor child as an adult, the restaurant staff misbehaved toward him.

He also raised concerns regarding the quality of certain food items and sought a refund of the service charges along with compensation of Rs 5 lakh for mental agony, harassment and humiliation.

Contesting the complaint, the restaurant denied allegations of service deficiencies, misbehaviour, and unfair trade practices. It argued that the amount was collected as “staff contribution”, which was prominently displayed on the menu card, and claimed that such charges would have been waived had any objection been raised by the customer.

The restaurant also relied upon interim orders passed by the Delhi High Court in proceedings relating to service charges levied by hotels and restaurants. While denying liability, it expressed willingness to refund the disputed amount of Rs 151.53.

After examining the evidence and hearing both sides, the consumer forum found that the restaurant had admitted collecting the amount and agreed to refund it.

“It is proved that the OP charged service charges and not the staff contribution, without obtaining consent from the consumer, which constitutes an unfair trade practice and the complainant is entitled to a refund of the said amount,” the commission said in its order.

The commission observed that even if the restaurant intended to collect the amount as a staff contribution, it was under a duty to clearly inform customers about such charges in advance.

“The entire pleadings and even the documents, nowhere show that the complainant was ever informed beforehand in a clear and unambiguous manner regarding the compulsory levy of such service charges/staff contribution,” it said.

The consumer forum further said that the bills produced on record specifically described the levy as “service charges” and not staff contribution.

At the same time, the commission rejected the complainant’s allegations regarding misbehaviour by the restaurant staff, sub-standard food quality and charging buffet rates for a minor child, observing that these claims remained unsubstantiated due to a lack of supporting evidence.

“There is no evidence on the record to substantiate the allegations of misconduct, threat, humiliation of the complainant,” the commission said.

Holding that the levy of service charges without obtaining the consumer’s consent amounted to an unfair trade practice, the forum said: “It is proved that the OP charged service charges and not the staff contribution, without obtaining consent from the consumer, which constitutes an unfair trade practice.”

Partly allowing the complaint, the commission directed the restaurant to refund Rs 151.53 collected as service charges, along with interest from the date of filing of the complaint until realisation.

It also ordered payment of Rs 15,000, including litigation expenses, towards compensation for mental tension and harassment caused to the complainant.

The consumer forum directed the opposite parties to comply with the order within 45 days from receipt of its copy.

–IANS

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