Delhi HC upholds guidelines prohibiting automatic levying of service charge

The Delhi High Court on Friday ruled that the payment of service charges on food bills by customers is voluntary and cannot be imposed as mandatory by restaurants or hotels, observing that mandatory collection of it amounts to unfair trade practice.

Justice Prathiba M Singh delivered the verdict, dismissing petitions filed by restaurant associations challenging the Central Consumer Protection Authority's (CCPA) guidelines, which prohibit hotels and restaurants from mandating service charges on food bills.

The High Court also imposed costs of Rs 1 lakh on the restaurant associations that challenged the CCPA guidelines.