Levying service charge of Rs137 costs Nando’s Rs 12,000

Aneesha Sareen

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Tribune News Service

Chandigarh, July 3

Levying an illegal service charge of Rs 137.55 on the bill of a customer has cost Nando’s, an eating joint at Elante Mall in the Industrial Area, dear as the food chain will now have to pay Rs 12,000 to the customer towards compensation and the litigation cost. The UT Consumer Disputes Redressal Forum has directed Nando’s (Sukhmani Enterprises) in Elante Mall and the managing directors of Nando’s in New Delhi to pay Rs 7,000 as compensation and Rs 5,000 towards the litigation cost for illegally levying service charge on a food bill. Nando’s has also been directed to refund the amount of Rs 137.55 to the customer as it has been held guilty of unfair trade practices.

The complainant, Gurinder Singh, a resident of Sector 69, Mohali, stated to the forum that on October 27, 2014, he along with his family members, went to Nando’s for lunch and ordered two veggie pita, one peri peri paneer kebab, four kidz burger (veg), five fresh lime soda and one fries large, worth Rs 1,965. It was alleged that when the complainant, after having lunch, went to the counter for payment, to his utter surprise, he was asked to pay an additional amount of Rs 137.55 as service charge. It was further stated that the authorities explained that this amount directly went into the pocket of waiters and they were authorised to charge it.

It has been further stated that when the complainant refused to accede to the illegal demand of service charge made by the restaurant, he was insulted in front of his family members. Left with no alternative, the complainant had to pay the service charge.

In its reply, representatives of Nando’s pleaded that the service charge was a nominal fee collected from the customers for the betterment of the establishment and employees thereof.

It was asserted that the service charge was a fee charged for providing hospitality and services to the customers.

What the forum said

Coming down heavily on the food chain owners, the forum, presided by president PL Ahuja and member Surjeet Kaur, stated that, “We feel Nando’s has been fleecing customers by charging money at the rate of 7 per cent on the bill as service charge. By levying the service charge illegally, the restaurants are putting an additional burden on consumers, who already have to pay around 25 per cent taxes in form of VAT and service tax. The Chandigarh Administration has recently declared service charge as illegal vide instructions dated October 31, 2014, and has directed all restaurants and hotels not to levy the service charge on customers.” 

  “Nando’s has not placed on record any statute/instructions/guidelines, entitling it to levy the service charge to the extent it charged from the complainant in the present case. It is, thus, legitimately proved that they resorted to unfair trade practices in collecting the excess amount and failed to return the same, which resulted in mental agony and harassment to the complainant.”