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Ludhiana: Consumer panel orders café to refund ₹52 service charge, pay ₹10k compensation
The order was passed by commission president Sanjeev Batra and member Monika Bhagat on a complaint filed by Rishabh Gupta of Haibowal Kalan
The District Consumer Disputes Redressal Commission, Ludhiana, has directed Café Elizabeth III to refund ₹52.50 service charge levied on a customer’s bill and pay ₹10,000 as composite compensation and costs, holding that the levy amounted to an unfair trade practice.
The order was passed by commission president Sanjeev Batra and member Monika Bhagat on a complaint filed by Rishabh Gupta of Haibowal Kalan.
According to the complaint, Gupta visited the café with friends on January 24, 2026, and ordered a pizza and a can of Diet Coke. He alleged that the café subsequently added a 5% service charge of ₹52.50 to his bill, besides GST, taking the total amount to ₹1,155.
When Gupta objected to the charge, a café representative allegedly told him that it was the establishment’s usual practice. He paid the amount and subsequently sent a legal notice to the café, but received no relief. He then approached the consumer commission.
The café did not appear before the commission despite notice and was proceeded against ex parte.
The commission relied on the Central Consumer Protection Authority’s (CCPA) 2022 guidelines, which state that restaurants cannot automatically or by default add a service charge to customers’ bills. It also referred to a March 2025 judgment of the Delhi High Court upholding the CCPA guidelines and observing that service charges are voluntary and cannot be imposed coercively. The commission noted that the disputed bill carried a separate entry for “service charge”, but the charge had not been prominently disclosed on the bill or displayed elsewhere in the restaurant. It held that this amounted to a violation of the consumer’s right to be informed.
The commission further observed that Gupta had been compelled to pay the charge before leaving the restaurant and held that the practice was contrary to the CCPA guidelines applicable at the time.
The café was directed to refund ₹52.50 to Gupta with 8% annual interest from January 24, 2026, until payment. It was also ordered to pay ₹10,000 as composite compensation and costs.
The commission further directed the café to modify its software-generated billing system to remove any default addition of service charge or any charge under another name.
The café has been given 30 days from receipt of the order to comply.
