Restaurant Fined Rs 5,000

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Hyderabad: Restaurant Fined Rs 5,000 For Taking Service Charge From Customer

Sudhanva

June 21st, 2017

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Image Credit: Square Space

A popular Hyderabad restaurant has been penalised by the District Consumer Forum after it charged one of its customers 10% as service charge.

The customer, who happened to be anti-corruption activist Vijay Gopal, filed a case against the restaurant, Ohri’s 100 Degrees, in Madhapur police station under Sections 420 (cheating) and 418 (cheating with knowledge that wrongful loss may ensue to person) of the Indian Penal Code (IPC).


The bill, where Vijay Gopal was charged 10% as service tax.

The District Consumer Dispute Redressal Forum has directed Ohri’s 100 Degrees to refund the Rs 213 that was paid as service charge along with a compensation of Rs 5,000. The Consumer Forum has also asked the restaurant to reimburse Rs 1,000, which was the cost of filing the complaint.

Speaking to The Logical Indian, Mr Gopal said, “You’re exploiting the professions behaviour of some people who are not eager to pick up a fight or argue over things. I hope this proves to be a slap on the face of any hotel management that feels entitled to blatantly mention on its menu or outside its premises that some percentage of the bill will be charged as a service charge. Not only does this hoodwink citizens into being forced to pay the service charge – even when they may not be satisfied with the service or unwilling to.”


In India, paying service charge at restaurants is not compulsory and is entirely up to the customer. While the restaurant can add a service charge on a person’s bill, it is up to the customer to pay the service charge. The customer could very well decide to not pay the service charge; they cannot be forced by the hotel management to pay up.

Mr Gopal said, “This has to be a warning to restaurants to stop looting gullible citizens in the name of business. I will file a criminal cases against all the restaurants in the city if they continue to levy service charge on any customer. My opinion about it is that forcing the payment of a service charge is unconstitutional as I have ever right against exploitation. This better be a wake up call for others restaurants in the city and around the country.”


Payment of service charge is completely voluntary and left to the customer

Only two months ago, Food and Consumer Affairs Minister Ram Vilas Paswan reiterated that service charges in restaurants was voluntary and could not be made compulsory. Paswan also issued guidelines for states to take action.

“The government has approved guidelines on service charge. As per the guidelines, service charge is totally voluntary and not mandatory now,” Paswan said in a tweet. “Hotels/restaurants should not decide how much service charge is to be paid by the customer and it should be left to the discretion of customer … Guidelines are being sent to states for necessary action at their ends.”

As per the guidelines, the column of service charge in a bill is to be left blank to customers to fill up before making the final payment. If there is mandatory levy of service charge, customers can file a complaint in the Consumer Court.

An analysis of these guidelines can be read here.


The Logical Indian take

This is not the first time that Vijay Gopal has taken it upon himself to ensure that the law is upheld. Only earlier this year, he filed a case against INOX Movies’ unfair trade practices and won the case. He also saw to it that restaurants that overcharge customers and schools that charged excess fees were fined for their excesses.

The Logical Indian community hopes that more customers become aware of service charges being optional and voluntary. We also hope that restaurants that enforce service charges are penalised and more citizens report such instances. Additionally, we thank Mr Gopal for his hard work and dutifulness in bringing this injustice to light and seeing to it that those responsible for cheating the public are made to face the law.


Also read:

  1. Hyderabad: Man Filed A Complaint Against INOX Movies’ Unfair Trade Practices And Won The Case
  2. Hyderabad Restaurant Fined Rs 10,000 For Overcharging Rs 4 On A Cold Drink
  3. Thanks To Activist’s FIR, Hyderabad Private School Booked For Charging Excess Fees

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