CCPA Takes Suo Moto Action Against Five Delhi Restaurants Over Mandatory Service Charges

New Delhi, India – The Central Consumer Protection Authority (CCPA) has initiated suo moto action against five Delhi-based restaurants—Makhna Deli, Xero Courtyard, Castle Barbeque, Chaayos, and Fiesta by Barbeque Nation—for failing to refund service charges despite a ruling by the Delhi High Court. The Ministry of Consumer Affairs, Food & Public Distribution announced this measure, reinforcing consumer rights under the Consumer Protection Act, 2019.

Regulatory Intervention

The CCPA issued notices to these restaurants, directing them to refund service charges unlawfully imposed on customers. The ministry emphasised that no hotel or restaurant can force a consumer to pay service charges, nor can they collect such fees under any other name.

This enforcement stems from guidelines released by the CCPA on 4 July 2022, which aimed to curb unfair trade practices and protect consumer interests concerning service charges in hospitality businesses.

Delhi High Court’s Ruling and Consumer Complaints

On 28 March 2025, the Delhi High Court upheld the CCPA guidelines on service charges, reinforcing consumers’ rights. Despite this ruling, complaints filed through the National Consumer Helpline (1915) revealed that certain restaurants continued to impose mandatory service charges without prior consent, violating the Consumer Protection Act, 2019.

These allegations prompted the CCPA to take suo moto cognizance and intervene, ensuring compliance with consumer protection laws.

Role of the CCPA

Established under Section 10 of the Consumer Protection Act, 2019, the CCPA’s primary mandate is to regulate violations of consumer rights, prevent unfair trade practices, and address false or misleading advertisements that harm the interests of the public.

Impact on Consumer Rights

This latest action highlights the government’s commitment to safeguarding consumer interests and ensuring that businesses operate transparently. As enforcement continues, the CCPA remains vigilant in preventing service charge impositions that pressure consumers into paying additional fees without prior consent.