Jalandhar Restaurant Fined Rs 15,000 for Illegally Charging Service Charge

When Advocate Sanjeev Duggal from Hadiabad, Phagwara went to a well known restaurant in Civil Lines, Jalandhar on November 8, 2023 to have buffet dinner with his family, his experience turned out to be the worst. According to Duggal, he had specifically informed the restaurant staff that there were three adults and one minor child, but the restaurant charged buffet charges for four adults.

Moreover, he had purchased liquor and was issued two bills.In the said bills, service charges amounting to Rs 128.13 and Rs 23.40 respectively, totaling Rs 151.53, were levied at the rate of 3%.

Duggal alleged that when he objected to the charging of service charges and the charging of buffet charges for the minor child, the restaurant staff misbehaved with him and failed to address his grievance. He also alleged that the quality of certain food items, particularly fish, was not satisfactory. Thus he claimed deficiency in service of the restaurant and filed a consumer case seeking refund of the service charges along with compensation of Rs 5 lakh and litigation expenses.

The restaurant denied all allegations of misbehavior, deficiency in service and unfair trade practice and said that Duggal was misconceived and filed the consumer case with mala fide intentions.

The restaurant also clarified before the consumer commission that the amount charged in the bills was shown as staff contribution/service charge, that the same was prominently displayed on the menu card, and that it was their policy to waive such charge if any customer objected to it. They asserted that Duggal never raised any objection at the relevant time so they did not waive it.

The case was filed in consumer commission on November 24, 2023 and on June 4, 2026, the consumer commission passed its judgement in Duggal’s favour (Complaint No.469 of 2023). The consumer commission said that due to rush of work the complaint could not be decided within the stipulated time.

Jalandhar district consumer disputes redressal commission order and discussion

A summary of the consumer commission judgement is as follows:

Restaurant says the charges are staff contribution but bill shows it as service charge

The consumer commission said that even for the sake of arguments, if it is assumed that the terminology ‘staff contribution’ is being used, but even then it is the duty of the Restaurant to disclose to the customers about the guidelines and about the levy of such charges.

However, the restaurant's entire pleadings and even the documents, nowhere show that the complainant was ever informed beforehand in a clear and unambiguous manner regarding the compulsory levy of such service charges/staff contribution.

The consumer commission said: “Even the bills produced by the complainant (Duggal) nowhere shows that these charges were levied as staff contribution. It is clearly mentioned in the bills that service charges @ 3% have been levied in both the bills.”

The consumer commission observed that the restaurant claims to follow the Delhi High Court and other guidelines, but did not comply with those guidelines nor there is any evidence to show that Duggal has ever consented to mandatory payment of service charges/staff contribution as alleged by the restaurant.

Without evidence of misbehavior or bad food it cannot be admitted

The consumer commission observed that Duggal even though alleged that the restaurant misbehaved with him and threatened to take action against him, if he opts to take any action against them, but the Restaurant has denied it and there is also no evidence of such misbehavior.

The consumer commission said that Duggal has not examined any independent witness to prove this fact and also has not lodged any complaint with the higher authorities of the restaurant or the hotel management immediately after the incident.

The consumer commission said that Duggal himself is an advocate and he knows the steps/measures to be taken in such types of incidents, but he has not proved on record these allegations.

Similarly, even though Duggal raised objections about the standard and quality of the food, but did not file any complaint to the food inspectors or food authorities under the Food and Adulteration Act to prove that the quality of the food was sub-standard.

The consumer commission said: “Merely raising allegations do not prove that the food was of sub-standard quality.”

It is proved that restaurant charges service charges and not staff contribution and this too without consent

The consumer commission said that it is proved that the restaurant charged service charges and not the staff contribution, without obtaining consent from the consumer and this constitutes an unfair trade practice and the complainant is entitled to refund of the said amount. Duggal has indeed suffered mental harassment also and thus the restaurant's unfair trade practice is proved.

Consumer commission order

The consumer commission ordered the restaurant to refund Rs 151.53 and pay a compensation including litigation expenses of Rs 15,000 for causing mental tension and harassment to the complainant (Duggal).