Delhi High Court directs hotel owners not to take service charge from customers

The Delhi High Court on Wednesday came down heavily on the hotel association for taking service charge from their customers.

The court says that the use of the term gives the impression that it is being imposed by the state government and not by hotel owners. 

The court has suggested that the hotel association change the name of 'service charge' to either 'staff welfare fund' or 'staff welfare contribution'. 

In a stinging attack on the hotel association, the court said that hotel owners can't mislead people on the basis of an interim order by the court.

The court in an interim order had stayed a ban on automatic levy for service charge on food bills. 

Hotel owners are displaying the court order on the gate, the walls of their building, and also on the menu.

The court says such a display of the interim order indicates that the court has allowed the hotels to impose a service charge. 

A government prosecutor had already informed the court about how hotel owners were misusing the interim order.

The court ordered hotel owners to maintain transparency and directed them to inform the court about how many of them want to tell their customers that a service charge is not mandatory. 

The hotel association has promised to deliver the list along with an affidavit to the court. The court was adjourned until the next hearing on July 24.