Delhi High Court imposes ₹1 lakh costs on restaurants associations for failing to comply with order on service charge

The Delhi High Court recently imposed costs of ₹1 lakh each on the two hotel and restaurants associations for failing to comply with its directions on the issue of service charge. .In an order passed on April 12, 2023, the Court had ordered the National Restaurants Association of India (NRAI) and the Federation of Hotels and Restaurants Association of India (FHRAI) to consider changing the term ‘service charge’ on bills to ‘staff welfare fund’ or ‘staff welfare contribution’.The two associations were also directed to hold a meeting and inform the Court about the percentage of its members willing to inform the consumers that service charge is not mandatory and the percentage of members willing to give consumers the option to make voluntary contributions..When the case was taken up for hearing on July 24, Justice Prathiba M Singh noted that there was nothing to show that the two associations complied with its ordersThe Court also observed that two organisations filed their affidavits without serving the respondents properly to ensure that the hearing does not proceed before it.It, therefore, ordered that affidavits be filed properly subject to payment of ₹1 lakh each as costs.“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 Court ordered.The matter will be heard next on September 5..Advocates Dr Lalit Bhasin, Nina Gupta, Ananya Marwah, Vaishnavi Gupta and Ajay Pratap Singh appeared for the National Restaurants Association of India.Federation of Hotel and Restaurants Association of India was represented through advocates Sameer Parekh, Sumit Goel, Sonal Gupta, Swati Bhardwaj and Abhishek Thakral.Additional Solicitor General (ASG) Chetan Sharma with Central Government Standing Counsel (CGSC) Sandeep Mahapatra and advocates Kritika Sharma and Abhinav Bansal represented the Central government..[Read Order]