Consumer Commission Orders Jalandhar Restaurant to Refund Service Charges, Awards Compensation for Unfair Trade Practice

June 4, 2026 : In a significant ruling for consumer rights, the District Consumer Disputes Redressal Commission, Jalandhar, has held that a restaurant cannot impose service charges on customers without obtaining their clear consent. The Commission directed a Jalandhar-based restaurant to refund the service charges collected from a customer and awarded compensation for mental harassment, holding that the practice amounted to an unfair trade practice under consumer law.

The order was passed on June 4, 2026, in a consumer complaint filed by advocate Sanjeev Duggal against Maya Inss Pvt. Ltd., a restaurant operating in Jalandhar. The dispute arose from a family dinner visit on November 8, 2023, during which the complainant alleged that the restaurant charged buffet fees for four adults despite being informed that one member of the group was a minor child. He further alleged that service charges were added to the bill without his consent and that restaurant staff behaved improperly when he objected.

According to the complaint, the restaurant raised two bills for food and liquor purchases and collected service charges amounting to ₹151.53 at the rate of 3 percent. The complainant claimed that the levy of such charges, coupled with the alleged misconduct of restaurant staff and dissatisfaction regarding the quality of certain food items, amounted to deficiency in service and unfair trade practice. He sought refund of the service charges along with compensation for mental agony and litigation expenses.

The restaurant contested the allegations and denied any deficiency in service. It argued that the disputed amount represented “staff contribution” rather than service charges and claimed that such charges were disclosed through its menu card. The management also relied upon proceedings pending before the Delhi High Court concerning service charges levied by hotels and restaurants and stated that it was willing to refund the disputed amount of ₹151.53.

After examining the evidence and hearing both sides, the Consumer Commission focused primarily on the legality of the service charges. The Commission noted that the restaurant had admitted collecting the amount and had also expressed readiness to refund it. While the restaurant attempted to justify the levy by referring to the term “staff contribution” and certain regulatory developments, the Commission found that the bills issued to the customer clearly described the amount as “service charges” and not as staff contribution.

The Commission observed that the restaurant failed to establish that the customer had been informed beforehand in a clear and unambiguous manner about any compulsory levy of service charges or staff contribution. It further noted that there was no evidence showing that the complainant had consented to such charges before availing the service. The Commission emphasized that merely relying on internal policies or menu disclosures was insufficient where customer consent could not be demonstrated.

Explaining its reasoning, the Commission observed that, “It is proved that the OP charged service charges and not the staff contribution, without obtaining consent from the consumer which constitutes an unfair trade practice.” This finding became the central basis for granting relief to the complainant.

At the same time, the Commission declined to accept several other allegations made by the complainant. It found that there was no independent evidence to support claims of misbehavior, threats, humiliation, or poor food quality. The Commission noted that no independent witness had been examined, no complaint had been lodged with restaurant management or food authorities, and no material had been produced to establish that the buffet was ordered for three adults and one minor child. Since consumer proceedings are summary in nature, the Commission held that such allegations required stronger evidentiary support and could not be accepted merely on assertion.

The decision is important because it reinforces consumer protections against unauthorized service charges in restaurants and hospitality establishments. The ruling reflects the broader regulatory position adopted by consumer authorities that service charges cannot be imposed as a mandatory component of a bill without the customer’s informed consent. It also highlights that businesses must maintain transparency regarding additional charges and ensure that customers are adequately informed before such amounts are collected.

Partly allowing the complaint, the Consumer Commission directed the restaurant to refund ₹151.53 collected as service charges along with interest from the date of filing of the complaint until realization. The Commission also awarded ₹15,000 as compensation, including litigation expenses, for the mental harassment and inconvenience suffered by the complainant. The restaurant has been directed to comply with the order within 45 days of receiving a copy of the judgment.

The ruling serves as a reminder that consumer rights under the Consumer Protection Act, 2019 extend beyond product quality and include protection against unfair billing practices. Restaurants and service providers may now face greater scrutiny if they continue to impose mandatory service charges without obtaining clear customer consent.

Case Reference : Sanjeev Duggal v. Maya Inss Pvt. Ltd. & Anr., Complaint No. 469 of 2023, District Consumer Disputes Redressal Commission, Jalandhar.