The district consumer forum has slammed popular restaurant Cream Centre, which is run by Prince Cuisines Pvt. Ltd, for levying service charge. It has directed the eatery to stop the levy immediately. Calling this practice as a ‘condition precedent enforced on the customers’, the forum held that the 65 year -old restaurant is guilty of applying unfair trade and restricted practice.
Advocate Yogesh Patki, had filed a case against the Cream Centre located at Girgaum Chowpatty in July 2017 before the South Mumbai’s District Consumer Dispute Redressal Forum. He said after eating the food he was given a bill which included a five per cent service charge.
The invoice showed that the service charge was not optional but a compulsory. As the restaurant was collecting service charge in the bill itself, at the rate of 5%, it amounted to a restrictive and unfair trade practice under the provisions of the consumer protection Act.
Consumer Complaint Vs Restaurant's Defense On The Service Charges Issue
The complaint stated that the service charge was recovered by the restaurant towards the services offered by it, which is an inherent part of its activity involving supply of food items. Therefore, the cost incurred towards service of the food items is already fixed and recovered by the restaurant. “The quantum of service charge has to be left to the discretion of the customers who avail the service as it is the customer only who can decide the quantum of the service charge depending upon various factors including the quality of service, the service charge column in the bill has to be left blank so as to enable the customer to decide whether he or she wants to tip or reward the person serving the food in the restaurant,” Patki stated in his complaint.
The restaurant however denied all the allegations levelled against it. The management pointed out that the quantum of service charge is prominently displayed on various conspicuous places in the restaurant, including the entrance door and the front desk as well as the menu of the restaurant.
The Forum after going through the evidence held that the guidelines issued by Govt. of India on 21 April 2017 are not merely advisories but also explain the scope of the unfair trade practice.
Consumer Forum Rebukes Cream Centre, Orders Refund And Compensation
The Forum maintained that , “The restaurant’s act of levying mandatory five percent service charges over and above the food and beverages bills falsely represents that the services are of particular standard, quality, and great as they provide a range of other service including the ambience of the restaurant, air conditioning, crockery, carpets, furniture, staff including waiters for service. that essentially completes the experience of the customers who choose to dine in at the restaurant."
The Forum, thus, directed the restaurant to repay the additional service tax of Rs 29.45 to the complainant, along with an additional amount of Rs 25,000 by way of compensation. However as per the request of the complainant the above two amount’s will be deposited to the Consumer Welfare Fund.
