The Commission observed that hotels and restaurants cannot force consumers to pay service charges and must treat such charges as voluntary, optional and at the consumer's discretion.

Facts

The complaint was filed by Rudresh R.S., who stated that he visited Sherlock's Pub in Nagarabhavi, Bengaluru, along with a friend on March 24, 2026, at around 8:30 PM for dining services.

According to the complainant, he noticed the service charge mentioned in the menu and immediately objected to its compulsory levy. However, the pub's Manager allegedly informed him that a 7.5% service charge would be mandatorily added to the final bill.

The complainant further stated that he brought the Central Consumer Protection Authority (CCPA) guidelines to the Manager's attention and informed him that service charge was voluntary. Despite this, he was allegedly told that the charge was mandatory pursuant to management instructions and would not be removed. He was also allegedly informed that dining services would not be provided unless he agreed to pay the charge.

Despite reiterating his objection at the time of payment, the complainant eventually paid a bill of ₹1,887, which included ₹128 towards the 7.5% service charge. He subsequently issued a legal notice dated April 10, 2026, seeking refund of the service charge and compensation. The pub allegedly neither responded to the notice nor complied with his demands.

Despite service of notice, the opposite party failed to appear before the Commission and was proceeded ex parte.

Observations

The complainant relied on the CCPA guidelines and the Delhi High Court's decision in National Restaurant Association of India & Ors. v. Union of India & Anr., which held that service charge or tip is voluntary and cannot be made compulsory.

The Commission found that despite the complainant informing the pub about the CCPA guidelines, it continued to insist that the service charge was mandatory as per management instructions. It observed that this was not an inadvertent billing error but appeared to be part of a management policy to impose the charge irrespective of the consumer's choice.

The Commission further noted that the pub refused to provide dining services unless the complainant agreed to pay the charge and subsequently refused to remove it despite his objection. It held that such conduct amounted to deficiency in service and unfair trade practice.

Decision

The Commission partly allowed the complaint and directed Sherlock's Pub to refund ₹128 to the complainant with 8% interest per annum from March 24, 2026, until realization. It further directed the pub to pay ₹2,000 towards damages and mental agony and ₹1,000 towards litigation costs.

The Commission directed the pub to comply with the order within 45 days from receipt of the order, failing which the amount of ₹128 would carry 10% annual interest from the date of default until realization.

Complainant's Advocate: S. Sumantha