Delhi HC approves the use of service charges in eateries till next hearing

The Delhi High Court ruled on Thursday that restaurants across the country can continue to impose a service charge for the time being.

The Delhi High Court ruled on Thursday that restaurants across the country can continue to impose a service charge for the time being. The court also stated that while restaurants are required by law to pay their employees, the expense cannot be passed on to customers.

The remarks were made when the court was hearing an appeal against a single judge’s judgement that had placed on hold guidelines issued by the CCPA, or Central Consumer Protection Authority, that prohibited restaurants from automatically adding service charges to food bills.

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The Delhi High Court bench, comprised of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, also granted CCPA 10 days to file their response to the restaurant’s petition as it remanded the case to the single judge for reconsideration. The CCPA’s appeal was dismissed by the court.

Despite stating that the interim orders will be maintained, the bench scheduled the case for a hearing on August 31.

The long-running conflict over the CCPA guidelines, which forbade eateries from automatically adding service charges to food bills, was suspended on July 20 by justice Yashwant Varma.

All restaurants are required to prominently publish a service charge levy on menus and other places, according to Justice Varma. The National Restaurant Association of India and the Federation of Hotel & Restaurant Associations of India submitted to the court that they would not impose this fee on takeout.

The CCPA had filed an appeal in opposition to the ruling, arguing that a customer shouldn’t be compelled to pay the service fee.