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Hitesh Jindal v. PVR Bluo Entertainment Ltd.
Factual and Procedural Background
On 6.3.2016, the complainant, Hitesh Jindal, along with friends visited the restaurant operated by PVR Bluo Entertainment Ltd. and ordered various food items including Jumbo Non Veg Platter and Veg Platter. After the meal, the complainant was presented with a bill of Rs.4,067/-, which included a 10% service charge amounting to Rs.335.80. Upon querying the basis for the service charge and requesting the relevant notification or instruction, the complainant was unable to obtain any documentation from the opposite party (OP). Additionally, when the complainant requested the complaint register, he alleged that he was humiliated and coerced into paying the bill. Alleging deficiency in service and unfair trade practice, the complainant filed the instant complaint before the District Consumer Disputes Redressal Forum-I, Chandigarh.
The OP responded by stating that the earlier Chandigarh Administration notification dated 31.10.2014, which restricted charging service charges, was superseded by a notification dated 24.2.2015 issued by the Excise and Taxation Commissioner, UT Chandigarh. The OP denied any deficiency or unfair trade practice and sought dismissal of the complaint. The complainant filed a rejoinder denying the OP’s claims. Both parties led evidence and presented arguments before the Forum.
Legal Issues Presented
- Whether the opposite party was legally entitled to charge a 10% service charge from the complainant.
- Whether charging the service charge constituted deficiency in service or an unfair trade practice by the opposite party.
- Whether the complainant is entitled to compensation for alleged humiliation and harassment.
Arguments of the Parties
Complainant's Arguments
- The OP illegally charged a 10% service charge without providing any valid notification or authority for such levy.
- Charging the service charge amounted to an unfair trade practice.
- The complainant suffered humiliation and mental torture when objecting to the service charge and was forced to pay.
- Compensation is warranted for the harassment faced.
Opposite Party's Arguments
- The earlier Chandigarh Administration notification prohibiting service charges was superseded by a later notification dated 24.2.2015 from the Excise and Taxation Commissioner.
- The OP was within its rights to charge the service charge as per the latest notification.
- There was no deficiency in service or unfair trade practice.
- The complaint is without merit and should be dismissed.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Premier Restaurant Pvt. Ltd. & Anr. Vs. Union Territory, Chandigarh & Ors (CWP No.23369 of 2014) | Notification dated 31.10.2014 prohibiting service charge was superseded by notification dated 24.2.2015. | Confirmed that no notification existed prohibiting the OP from charging service charge. |
| The Federation of Hotels and Restaurants Association of India and Ors. Vs. Union of India and Ors., AIR 2007 (Delhi) 137 | Charging prices above MRP for mineral water/soft drinks in hotels/restaurants does not violate SWM Act; eatables and drinks served in hotels/restaurants are services, not sale under Consumer Protection Act. | Supported the principle that service charges in restaurants are permissible and do not constitute unfair trade practice under Consumer Protection Act. |
| Nandos Enterprises Vs. Gurinder Singh & Anr., First Appeal No.166 of 2015 | Restaurants/eateries can levy service charges from consumers. | Reinforced that levying service charges by restaurants is lawful. |
Court's Reasoning and Analysis
The court examined the facts and relevant notifications concerning the charging of service charges by restaurants. It noted that the initial Chandigarh Administration notification dated 31.10.2014, which prohibited service charges, was superseded by a later notification dated 24.2.2015 from the Excise and Taxation Commissioner. Consequently, no prohibition on charging service charges existed at the time of the complainant’s visit.
The court further relied on authoritative precedents, including the judgment of the Hon’ble Delhi High Court in The Federation of Hotels and Restaurants Association case, which clarified that the Consumer Protection Act does not apply to food and drinks served in hotels/restaurants as these constitute services rather than sales. This principle was corroborated by the State Commission’s decision in Nandos Enterprises, which upheld the legality of service charges in eateries.
Applying these legal principles to the facts, the court held that the OP was within its rights to charge a 10% service charge. There was no deficiency in service or unfair trade practice. Since the complainant failed to prove any illegal charging or resultant harassment, no compensation was warranted. The court also observed that the OP was subjected to unnecessary litigation.
Holding and Implications
The complaint is dismissed as devoid of merit, with the parties directed to bear their own costs.
The direct effect of this decision is that the opposite party is entitled to levy a service charge of 10% on customers without it constituting deficiency in service or unfair trade practice. No compensation is awarded to the complainant. The decision does not establish any new legal precedent but affirms existing legal principles regarding service charges in restaurants under the Consumer Protection Act.
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH Consumer Complaint No. : CC/325/2016 Date of Institution : 10/05/2016 Date of Decision : 22/12/2016 Hitesh Jindal, Add: H.No.1441-A, Sector 39-B, Chandigarh.
..Complainant V E R S U S PVR Bluo Entertainment Ltd., 3 Floor, Elante Mall, Business Park, Industrial Area, Phase-1,rd Chandigarh 160002 through its Manager/Proprietor.
Opposite Party QUORUM: MRS.SURJEET KAUR PRESIDING MEMBER RAVINDER SINGH MEMBER ARGUED BY : Sh. Nikunj Dhawan, Counsel for complainant : Sh. Jai Singh Brar, Counsel for OP Per Surjeet Kaur, Presiding Member.
The facts, in brief, are that on 6.3.2016, the complainant alongwith his friends went to the OPs restaurant and ordered Jumbo Non Veg Platter, Veg Platter etc. as per the menu.
After the meals the complainant was presented bill of Rs.4,067/-. The complainant queried from the OP about levy of service charge to the extent of 10% i.e. Rs.335.80 and asked it to show the notification/instruction in regard to the same, but it failed to do so. When the complainant asked for the complaint register, he was humiliated and forced to pay the bill.
Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice, the complainant has filed the instant complaint.
The OP in its written statement averred that the Chandigarh Administration notification dated 31.10.2014 was superseded by notification dated 24.2.2015 issued by the Excise and Taxation Commissioner, UT, Chandigarh and as such the OP is not in default in any manner whatsoever. Pleading that there is no deficiency in service or unfair trade practice on its part, OP prayed for dismissal of the complaint.
Rejoinder was filed by the complainant denying all the averments in the written statement of the OP.
The parties led evidence in support of their contentions.
We have gone through the record and heard the arguments addressed by the learned Counsel for the parties.
The learned counsel for the complainant argued that the OP has illegally charged service charge @ 10%. He argued that the OP had no right to charge service charge @ 10% from the complainant and so charging of service charge from the complainant amounts to unfair trade practice adopted by the OP. As such, the complainant is to be compensated for the torture suffered at the hands of the OP and also humiliation faced by him when he objected for payment of the service charge and his request was not accepted.
The learned counsel for the OP, on the other hand, argued that earlier the notification was issued by the Chandigarh Administration restraining the restaurants etc. not to charge the service charge, but, later on that notification was superseded. As such, the OP was within its right to charge the service charge and the complaint is devoid of merit, hence the same is liable to be dismissed.
The case of the complainant is that he ordered for the meal on 6.3.2016. As per Annexure C-1, the OP charged VAT @ 12.5%, service charge @ 10% and service tax @ 5.8%. The total amount paid by the complainant was Rs.4,067/- including all types of taxes and service charge.
There is no dispute that the OP is entitled to charge VAT @ 12.5% and service tax @ 5.80% as it is a statutory obligation on the part of the OP to charge the same from the customers. The only dispute raised by the complainant is about the charging of service charge @ 10% from him. A writ petition bearing CWP No.23369 of 2014 (O&M) titled as Premier Restaurant Pvt. Ltd. & Anr. Vs. Union Territory, Chandigarh & Ors. was filed in the Honble Punjab and Haryana High Court which was decided vide order dated 27.2.2015. A close perusal of the said order reveals that the memo No.E&T (ETO-Est.)-2014/4315-4316 Sd/- Sd/- 22/12/2016 [Ravinder Singh] [Surjeet Kaur] hg Member Presiding Member dated 31.10.2014 was superseded by order dated 24.2.2015 passed by the Excise and Taxation Commissioner, UT, Chandigarh. Thus, there is no such notification in existence prohibiting the OP from charging service charge. Now the only question remains to be decided is as to whether the OP has a right to charge service charge from the complainant? In the judgment in the case of The Federation of Hotels and Restaurants Association , the Honble Delhi of India and Ors. Vs. Union of India and Ors. , AIR 2007 (Delhi) 137 High Court held that charging prices for mineral water/soft drink in excess of MRP printed on packages during the service of customers in hotels and restaurants do not violate any provision of the SWM Act as the persons enter hotels and restaurants to enjoy ambience available therein. It was further held that this does not constitute sale or transfer of these commodities. It was further held that Consumer Protection Act does not apply to eatables and drinks ordered and supplied in a Hotel or restaurant on the principle that such are not sale but only service and falls under the rate of caveat emptor and, hence, such persons enjoying eatables and drinks in a hotel or restaurant is not a consumer as defined in the Consumer Protection Act. Our own Honble State Commission in Nandos Sukhmani , First Appeal No.166 of 2015 decided on Enterprises Vs. Gurinder Singh & Anr.
14.8.2015 held that the restaurants/eateries can levy service charges from the consumers. So, in view of the above proposition of law, we have no hesitation to hold that the OP was within its right to charge service charge @ 10%. As such, the OP is neither deficient in service nor it has adopted any unfair trade practice.
Since the complainant has failed to prove that the OP has charged any amount illegally, as such, he is not entitled to any compensation as there has been no harassment or mental torture to him. On the other hand the OP has been harassed by the complainant by dragging it into the present unnecessary litigation.
Taking into consideration all the facts and circumstances narrated above, the present complaint is devoid of merit and the same is hereby dismissed, leaving the parties to bear their own costs.
The certified copies of this order be sent to the parties free of charge. The file be consigned.
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