A district consumer court in Mumbai fined the restaurant for Rs 25,000 for levying a compulsory 5% service charge of Rs 29 on the bills of one of its customers. Along with the fine, the restaurant has also been asked to refund Rs 29 of the service charge.
Yogesh S Patki filed a complaint with the South Mumbai District Consumer Disputes Redressal Commission against Girgaon-based Cream Centre owner Prince Cuisines Pvt Ltd in 2017, as reported by TOI. The panel has now decided in favour of the lawyer, calling the service charge “highly objectionable” and “illegal”.
“It is the bouquet of additional services that complete 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,” the commission further said.
The panel also noted that if a restaurant charges an obligatory service charge in addition to the food and beverage bills, it suggests that the services offered meet a certain standard and quality. This is because the restaurant provides a variety of different services, such as atmosphere, air conditioning, tableware, carpets, furniture, and service workers, including waiters.
The commission also stated that tipping is between the client and the service workers and that hotel management has nothing to do with it. It has now asked the restaurant to stop levying the mandatory service charges, effective immediately.
Further, in response to Yogesh’s complaint, the restaurant had said that it is a leading service provider in the restaurant business and, therefore it imposes service charges on the customers who dine in at the restaurant. It also said that it had mentioned the service charge through the restaurant’s premises, which included the entrance, front desk and even the menu card.
