The Central Consumer Protection Authority has fined a Connaught Place restaurant Rs 10,000 for adding a discretionary service charge of Rs 80 to a customer’s bill and ordered it to stop the practice immediately.
The action followed a complaint by Akshay Malhotra, who alleged that the restaurant issued him a bill of Rs 924 that included the service charge in addition to GST. He submitted the bill to the consumer watchdog, which took suo motu cognisance of the grievance and investigated the billing practice.
The CCPA found that the restaurant had levied the charge despite guidelines against including any service charge in a customer’s bill. The guidelines had been upheld by the Delhi High Court, making the restaurant’s automatic inclusion of the charge a regulatory violation, according to the report.
During the investigation, the restaurant told the authority that it had refunded the Rs 80 to the customer and that no active dispute remained. It also stated that it had ceased operations in November 2025. The CCPA acknowledged both the closure and the prompt refund as mitigating factors while deciding the penalty.
The authority nevertheless held that the billing mechanism itself breached the applicable statutory guidelines. The case therefore extended beyond the individual refund: the restaurant was directed to pay the penalty and ensure compliance of its billing software within 15 days.
The order highlights the role of automated billing systems in enforcing charges at urban food and hospitality establishments. A charge described as discretionary cannot be added automatically to a bill under the guidelines cited in the case. The CCPA’s direction places responsibility on the establishment’s billing process, even though the restaurant said it had returned the money and was no longer operating.
For consumers, the complaint also illustrates the importance of checking itemised bills for charges added separately from taxes. In this case, the disputed amount was Rs 80 on a bill of Rs 924, and the customer provided the document that enabled the authority to examine the transaction.
The CCPA has directed the restaurant to pay Rs 10,000 and complete software compliance within 15 days. The authority’s order follows the Delhi High Court’s upholding of the guidelines governing service charges on restaurant bills.
