The appeals, filed by the National Restaurant Association of India (NRAI) and the Federation of Hotels and Restaurant Associations of India (FHRAI), contest a March 2025 decision by a single judge that upheld the Central Consumer Protection Authority’s (CCPA) 2022 guidelines prohibiting default imposition of service charges.

The Division Bench, comprising Chief Justice D.K. Upadhyaya and Justice Tushar Rao Gedela, agreed to list the matter before the upcoming summer recess, responding to an urgent plea from Senior Advocate Siddharth Luthra, who appeared on behalf of the restaurant bodies seeking interim relief.

Initially scheduled as items 4 and 5 in Friday’s cause list, the appeals could not be taken up due to the Bench being occupied with time-sensitive petitions. The matter had earlier been listed on April 29 but was deferred due to technical glitches in the Court’s virtual hearing system.

The original judgment had dismissed the industry’s writ petitions and imposed a Rs. 1 lakh cost on each petitioner to be deposited with the CCPA for consumer welfare. It also emphasized that default service charges on bills are coercive and misleading, often mistaken by customers for government-imposed taxes.

The Court ruled that any tipping should be a voluntary act and not automatically included in the bill, stating that doing so infringes upon a consumer’s freedom of choice.

The restaurant and hotel industry is now seeking a stay on the implementation of that ruling, arguing that the decision significantly impacts operational norms and revenue models in the food service sector.

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