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Delhi High Court imposes Rs 1 lakh cost on Restaurant and Hotel Associations for non-compliance of directions pertaining to Service Charge

Team SoOLEGAL 1 Aug 2023 4:47pm

Delhi High Court imposes Rs 1 lakh cost on Restaurant and Hotel Associations for non-compliance of directions pertaining to Service Charge

New Delhi: The Delhi High Court recently levied penalties of one lakh rupees each on both hotel and restaurant association for failing to comply with its directives on the matter of service fee.

In an order issued on April 12, 2023, the Court directed the National Restaurants Association of India (NRAI) and the Federation of Hotels and Restaurants Association of India (FHRAI) to consider altering the term service fee' on bills to staff welfare fund or staff welfare contribution.

The two associations were also directed to hold a meeting and report to the Court on the proportion of their members willing to advise consumers that service charges are not mandatory and the percentage of members willing to give consumers the option of making contributions.

When the case was heard on July 24, Justice Prathiba M Singh stated that there was no evidence that the two associations followed its directives.

The Court further noted that two organisations filed their affidavits without properly serving the respondents in order to prevent the hearing from proceeding before it.

As a result, it directed that affidavits be properly filed, subject to payment of ₹1 lakh each as costs.

The court stated “accordingly, one last opportunity is granted to the Petitioners to properly file these affidavits within four days subject to payment of ₹1,00,000/- as costs in each of the petitions which shall be paid to the Pay and Accounts Office, Department of Consumer Affairs, New Delhi by way of a Demand Draft. Without the cost being deposited, the affidavits shall not be taken on record.”

The case will be heard again on September 5th.

The National Restaurants Association of India was represented by advocates Dr Lalit Bhasin, Nina Gupta, Ananya Marwah, Vaishnavi Gupta, and Ajay Pratap Singh.

Sameer Parekh, Sumit Goel, Sonal Gupta, Swati Bhardwaj, and Abhishek Thakral represented the Federation of Hotel and Restaurants Association of India.

The Central Government was represented by Additional Solicitor General (ASG) Chetan Sharma, Central Government Standing Counsel (CGSC) Sandeep Mahapatra, and advocates Kritika Sharma and Abhinav Bansal.



Tagged: Delhi High Court  
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