The Delhi High Court on Friday questioned the National Restaurant Association of India (NRAI) over the practice of charging customers more than the marked price (MRP) of food items and asked why the additional charge is not included in the service charge, which is billed separately, as per a report by Live Law.
A division bench of Chief Justice DK Upadhyay and Justice Tushar Rao Gedela raised the question while hearing an appeal filed by the NRAI and Federation of Hotels and Restaurant Associations of India (FHRAI) against a single-judge order, which had held that service charge and tip are voluntary and cannot be mandatorily imposed on food bills by restaurant or hotels.
Court Asks How Restaurant Can Charge Extra
As per the report, the Chief Justice asked how a restaurant can charge Rs 100 for a bottle of water when its MRP is Rs 20.
The court further questioned how the restaurant can charge a customer for ambience separately and not include the amount in service charge only.
No Rule To Charge More Than MRP
Chief Justice Upadhyay said that under rules, no vendor is allowed to charge more than the MRP for any item. However, the court noted that restaurant claims that the additional charges are for the dining experience, which includes ambiance and services provided.
The court questioned why the menu showed Rs 100 for a bottle of water without making it clear that Rs 80 was for ambiance and experience.
The High Court bench, citing an example of a Rs 20 water bottle being sold for Rs 100 at restaurants, asked the NRAI and FHRAI why the establishments did not clarify that the additional Rs 80 was for the ambience.
Next Hearing
The matter will be heard next on September 22, and the court has indicated that it will pronounce the final verdict without granting interim relief.
March Verdict
Earlier in March, a single-judge bench had dismissed pleas by restaurant associations challenging the 2022 CCPA guidelines, which bar hotels and restaurants from levying service charges “automatically or by default” on food bills.
