TMI Blog2001 (12) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... ices Act, 1969 (hereinafter referred to as the Act). The allegation consists of recovery of compulsory service charges at 9% of the total bill for taking food in the restaurant. 2. Briefly stated the facts are that one Mrs. S.S Ahuja during her visit to a restaurant namely, Pizza Express, Connaught Place in New Delhi, discovered that the bill for food included additional amount of 9% towards service charges along with cost of food. On an inquiry made from the waiter, the amount was stated to be compulsory tip charges recovered from all customers who visit the restaurant. Understanding the tip charges to be optional, the practice of recovering service charges at a specified rate for serving food at tables was considered to be an unfair tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duly approved by the Department of Tourism as is the case in most of the hotels/restaurants. These are duly reflected on the menu cards. As the customers are duly informed of the charges to be levied, no unfair or deceptive method is stated to have been adopted to recover the amount. There is also no tie up between the products sold by the respondent and the service charges levied by it. There is a take away service available in the restaurant as clearly indicated in the menu card and it is only the food served in the premises that carry service charges reflected in the menu card. The charges so levied are not in the nature of compulsory tip but a commercial decision taken in accordance with the hospitality industry. In distinction to fas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hotels/restaurants who do not levy service charges. As per Shri Sanjay Mohindra appearing on behalf of the respondent, service charges are part of the price of the food items served inside the restaurant. The services mentioned in para 8 of the affidavit were stated to be merely a few of illustrations. Quite a few other benefits like offer of complimentary ice-creams to children, etc. were mentioned to justify the service charges by the respondent. 8. We have carefully considered the submissions made on either side and have also gone through the material placed on record. As agreed to on both sides, the photostat copies of the menu cards of the restaurant placed on record by the respondent are not taken into consideration for want of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar restaurants/hotels, does not make the practice as unfair within the meaning of Section 36A of the Act. There is thus no unfair practice or deceptive method adopted by the respondent as contended by the complainant. In fact the extra levy at 9% would act as a disincentive to the promotion of sales, which is a pre-requisite condition for holding the trade practice to be unfair. 9. It is true that, as generally understood and also impliedly accepted by the respondent, the tip is a voluntary contribution, which cannot be quantified. To the extent the averments of the complainant are correct. In view of the stand taken by the respondent, however, not much weight can be attached to the statement of the waiter. Thus the complainant has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving food at the table has a facility of Carry away service for which no service charges are levied. Normally understood, service charges are levied for the service of food at the table in the restaurant. The choice rests with the customer either to take food in the restaurant bearing the service charges, as-is also a practice in other restaurants, or to carry away the food avoiding the aforesaid levy. There could, however, be no tie up between the sale of food and service of it on the table as is in the present case. This goes along with it. These two cannot be separated. Thereof, the same cannot be covered under Clause (b) of Section 33(i) of the Act. The practice followed by the respondent as well the others in trade in no way harms the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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