The District Consumer Disputes Redressal Commission in Ludhiana has ordered Café Elizabeth III, located in South City, to refund a consumer Rs 52.50 charged as service charge, along with interest, and to pay Rs 10,000 in compensation and costs. The commission’s directive came after the cafe failed to appear before it despite receiving a notice.
Information was available with The Chenab Times indicating that the order was issued by Commission president Sanjeev Batra and member Monika Bhagat, addressing a complaint lodged by Rishabh Gupta, a resident of Haibowal Kalan. The cafe was proceeded against ex parte after its failure to present itself before the commission.
According to the details of the complaint, Gupta visited the café with friends on January 24, ordering a pizza and a diet coke. While the diet coke was served in an unopened can, the bill presented included a 5 per cent service charge amounting to Rs 52.50, in addition to the Goods and Services Tax (GST). This brought the total bill to Rs 1,155.
Gupta objected to the inclusion of the service charge and requested its removal from the bill. However, a representative of the establishment allegedly refused, citing it as the cafe’s standard practice. Following this, the complainant issued a legal notice on February 6, but reported receiving no satisfactory resolution.
The commission’s assessment referenced guidelines issued by the Central Consumer Protection Authority (CCPA) on July 4, 2022. These guidelines explicitly prohibit hotels and restaurants from automatically or by default levying a service charge on bills. Furthermore, the guidelines forbid the collection of such charges under any alternative name and emphasize that consumers cannot be coerced into paying them.
The commission concluded that the cafe had contravened the complainant’s right to be informed, a principle enshrined in the Consumer Protection Act. It was noted that the service charge was itemized separately on the bill and apparently levied on the consumer before he had an opportunity to depart the premises.
In its deliberations, the commission also took into account a judgment delivered by the Delhi High Court on March 28, 2025, in the case of National Restaurant Association of India and Others versus Union of India and Another. This ruling had previously upheld the CCPA guidelines, affirming that a service charge or tip is a voluntary payment and not an obligatory one.
Beyond the refund of Rs 52.50 with interest, the commission mandated that Café Elizabeth III pay Rs 10,000 as comprehensive compensation and legal costs. Additionally, the establishment was directed to revise its software-generated billing system to eliminate the default addition of service charges, or any similar levies under different nomenclature.
The café has been given a period of 30 days from the receipt of the order to comply with these directives. The commission’s ruling reinforces consumer rights and clarifies the voluntary nature of service charges in the hospitality sector within the district.
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The Chenab Times News Desk
