Jahanvi Agarwal
The Delhi High Court recently assessed costs of Rs. 1 lakh apiece on the two hotel and restaurant associations for failing to follow its instructions on the issue of service charges.
The National Restaurants Association of India (NRAI) and the Federation of Hotels and Restaurants Association of India (FHRAI) were instructed by the court in a ruling issued on April 12, 2023, to consider replacing the phrase “service charge” on receipts with “staff welfare fund” or “staff welfare contribution.”
Both Associations were also instructed to convene a meeting and report to the Court on the proportion of their members willing to advise customers that service charges are optional and the percentage of members willing to give customers the choice to make voluntary donations.
Hearing the matter, Justice Prathiba M. Singh observed that there was no evidence to support the two Associations’ compliance with her instructions when the case was heard on July 24, 2023.
The Court further noted that two entities failed to properly serve the respondents on their affidavits in order to prevent the hearing from taking place in front of them.
Therefore, it ruled that affidavits must be properly submitted and subject to a payment of Rs. 1 lakh for each.
The Court pronounced that:
“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.”
NDOH for the said matter is listed on 05.09.2023.
Case Name: National Restaurant Association of India & Ors v Union of India & Anr.
Diary Number: 10683/2022
Bench: Justice Prathiba M. Singh