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Restaurant Made to Pay 30 Times over Service Charge as Compensation

Restaurant Made to Pay 30 Times over Service Charge as Compensation

A restaurant in Khan Market paid over 30 times the service charge amount as compensation to a customer who moved a consumer forum seeking directions for a refund of the service charge amount.

The petitioner, Nihit Dalmia, in his petition, claimed that the restaurant staff had misbehaved with him because he refused to pay over Rs. 500 as service charge.

“I had gone to Harry’s Bar and Café in Khan Market last year and ran up a bill of Rs. 7,294. The total included a 10% extra service charge of Rs. 557 and tax of Rs. 105.32 on the service charge amount. When I asked the staff to remove the service charge, they misbehaved and said it was mandatory to pay the service charge as it was written on the menu,” said Mr. Dalmia.

After the consumer panel issued a notice to the restaurant, the restaurant agreed to settle the matter by paying Rs. 18,000 as compensation to the petitioner.

The plea stated that the “The Ministry of Consumer Affairs, Food and Public Distribution guidelines state that it is not mandatory for consumers to pay service charge at restaurants and that it is solely the discretion of consumers if they want to pay the amount or not. In the interest of justice, the claim amount and the compensation should be allowed with interest on the said amount.”


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