CCPA Penalises Cafe Delhi Heights for Unlawful Default Service Charge Levy: Key Findings and Directions
Background and Overview
The Central Consumer Protection Authority (CCPA) exercised its suo-moto powers after receiving multiple consumer grievances through the National Consumer Helpline 1915 between 28th March, 2025 and 31st March, 2026. These complaints were directed against Cafe Delhi Heights, a unit of Batra Bros Food and Beverages Pvt. Ltd., alleging that the restaurant was systematically adding a service charge to customer bills under the label "(Proposed Service Charge)(Staff Contribution)" — without obtaining prior informed consent and refusing to remove the charge when specifically requested by consumers.
The grievances originated from consumers across Uttar Pradesh, Haryana, and Delhi, and each complaint was accompanied by documentary evidence in the form of bills issued by the establishment. This matter ultimately culminated in a penalty of Rs. 80,000/- being imposed on the restaurant, along with binding directions to overhaul its billing practices.
Consumer Grievances That Triggered CCPA Action
The following complaints received on National Consumer Helpline 1915 formed the foundation of the CCPA's suo-moto action:
| Grievance No. | Date | Complainant | State | Nature of Complaint |
|---|---|---|---|---|
| 8791601 | 28-02-2026 | Timsy Jaipuria | Uttar Pradesh | Service charge levied without consent |
| 8906734 | 16-03-2026 | Mehakpreet Kaur | Haryana | Service charge not removed despite request; discount manipulated |
| 8932523 | 20-03-2026 | Shushil Kumar | Delhi | Service charge added to bill without consent |
| 8946151 | 23-03-2026 | Rajan Garg | Haryana | Service charge added and refused to be removed on request |
Note: All complainants submitted copies of their bills along with the grievances, providing concrete documentary evidence of the alleged practice.
Legal Framework Invoked
Relevant Delhi High Court Judgment
A critical reference point in this case was the Delhi High Court's judgment dated 28th March, 2025 in National Restaurant Association of India & Ors. v. Union of India & Anr., which had unequivocally held that:
- All restaurant establishments must adhere to the CCPA guidelines on service charges.
- Mandatory service charge collection is contrary to law and violates the guidelines.
- The CCPA guidelines are valid, enforceable, and in the interest of consumers.
- CCPA is free to enforce its guidelines in accordance with law.
This judgment effectively settled any ambiguity around the enforceability of CCPA's service charge guidelines and provided a solid legal foundation for the present action.
Applicable Provisions of the Consumer Protection Act, 2019
The CCPA examined the following statutory provisions before arriving at its conclusions:
Section 2(9)(ii)— Right of consumers to be informed about the quality, quantity, and price of goods and services, so as to protect them against unfair trade practices.Section 2(9)(v)— Right to seek redressal against unfair trade practices or unscrupulous exploitation.Section 2(28)— Definition of misleading advertisement, which includes any representation that falsely describes a product or service or conceals material information.Section 2(46)(vi)— Definition of unfair contract, which includes terms that impose unreasonable charges or obligations placing the consumer at a disadvantage.Section 2(47)— Definition of unfair trade practice, encompassing deceptive or unethical methods used in the promotion or provision of goods and services.
CCPA Guidelines Dated 4th July, 2022
The CCPA's Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants dated 4th July, 2022 lay down specific and unambiguous requirements:
(i) No hotel or restaurant shall add service charge automatically or by default in the bill.
(ii) Service charge shall not be collected from consumers by any other name.
(iii) No hotel or restaurant shall force a consumer to pay service charge and shall clearly inform the consumer that service charge is voluntary, optional and at consumer's discretion.
(iv) No restriction on entry or provision of services based on collection of service charge shall be imposed on consumers.
(v) Service charge shall not be collected by adding it along with the food bill and levying GST on the total amount.
These guidelines form the backbone of the CCPA's regulatory framework against coercive service charge collection.