A Delhi man's family dinner at an upscale restaurant in October 2024 turned into a legal battle after he refused to pay a Rs 949 service charge added to his Rs 11,761 bill. Alleging that restaurant staff surrounded his table and prevented him from leaving until he paid the amount, he approached a consumer commission, which has now held the restaurant guilty of unfair trade practice.

The South Delhi District Consumer Disputes Redressal Commission, comprising President Monika A. Srivastava and Member Kiran Kaushal, directed the restaurant, House of BOHO, to refund the service charge with interest and pay Rs 25,000 as compensation.

The order was passed on a complaint filed by Neeraj Dubey, who sought a refund of the service charge along with compensation for harassment and litigation costs.

Dubey alleged that after he requested the restaurant to remove the service charge, staff members surrounded his table and threatened him and his family. According to the complaint, they told him that he would not be allowed to leave the restaurant unless he paid the full bill, including the service charge. He eventually paid the amount under duress, the complaint said.

Dubey argued that the restaurant's conduct amounted to an unfair trade practice and deficiency in service under the Consumer Protection Act, 2019. He also contended that it violated the Central Consumer Protection Authority (CCPA) guidelines issued on July 4, 2022, which prohibit restaurants from automatically adding service charges and require such payments to remain voluntary and entirely at the consumer's discretion.

Despite being served with notice, House of BOHO did not appear before the commission. The commission, therefore, initiated ex parte proceedings on April 8, 2025, and decided the matter after considering the complainant's evidence and written submissions.

Commission relies on CCPA guidelines

The commission reproduced the CCPA guidelines issued on July 4, 2022, which state that no hotel or restaurant can automatically or by default add a service charge to a customer's bill, collect it under any other name, compel consumers to pay it, or restrict entry or services if a customer refuses to pay.

The commission also referred to the Delhi High Court's March 28, 2025 judgment in National Restaurant Association of India vs Union of India and Federation of Hotel and Restaurant Association of India vs Union of India, which upheld the validity of the CCPA guidelines. The High Court had held that collecting service charges in this manner is misleading and deceptive and amounts to an unfair trade practice, directing all restaurants to comply with the guidelines.

Relying on the CCPA guidelines and the Delhi High Court's ruling, the commission directed House of BOHO to refund the Rs 949 collected as a service charge, along with 7% annual interest from the date of payment until its realisation.

The commission also directed the restaurant to pay Rs 25,000 as compensation for the harassment caused to the complainant due to the unfair trade practice.

The commission ordered the restaurant to pay the amounts within three months of the order. If it fails to do so, it will be liable to pay 6% annual interest on the entire amount until realisation.

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