Tamil Nadu

South Chennai

CC/412/2014

M/s.M.Mohana Sundaram - Complainant(s)

Versus

M/s.Buhari Restaurant. - Opp.Party(s)

M/s.S.P.S.Buddhan

15 Mar 2019

ORDER

                                                                        Date of Filing  : 13.10.2014

                                                                          Date of Order : 15.03.2019

                                                                                  

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

TR. R. BASKARKUMARAVEL, B.Sc., L.L.M., BPT., PGDCLP. : MEMBER

 

C.C. No.412/2014

DATED THIS FRIDAY THE 15^TH DAY OF MARCH 2019

                                 

M. Mohana Sundaram,

S/o. Mr. Meenakshi Sundaram,

Advocate,

No.207, New Additional Law Chambers,

High Court,

Chennai – 600 104.                                                     .. Complainant.                                                           ..Versus..

 

BUHARI RESTAURANT,

Rep. by its Proprietor,

Old No.83, New No.3/17,

Mount Road,

Chennai – 600 002.                                                  ..  Opposite party.

          

Counsel for the complainant     : M/s. S.P.S. Buddhan & another

Counsel for the opposite party : M/s. M. Abdul Nazeer & another

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 prays to reimburse the complainant a sum of Rs.176/- together with interest at the rate of 24% p.a. from 02.06.2014 till the date of realization and to pay a sum of Rs.75,000/- towards compensation for mental agony to the complainant.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that he is an Advocate took dinner in the opposite party’s restaurant along with his family members on 25.05.2014.   After the dinner, the staff of the opposite party generate the bill to the tune of Rs.3,946/- in which, a sum of Rs.176/- i.e. 5% of the total amount of food was added as service charge apart from VAT and service tax.   When the complainant questioned the service charge, with the opposite party’s staff they informed that it is nothing but tips to the staffs.  The complainant paid the bill amount through his debit card.  On 02.06.2014, the complainant issued notice to the opposite party questioning the legality of charging extra amount towards service charge.   The complainant submits that he received a reply dated:15.07.2014 from the opposite party.  In which, the opposite party admitted the collection of 5% towards service charge.  The complainant submits that the opposite party tried to justify such collection as a ‘universal phenomenon’ and as a practice to regulate the staff from getting heavy amount as tips from the customers.  The act of the opposite parties amounts to deficiency in service and unfair trade practice which caused great mental agony.  Hence, the complaint is filed.

2.      The brief averments in the written version filed by opposite party is as follows:

The opposite party specifically denies each and every allegation made in the complaint and puts the complainant to strict proof of the same.    The opposite party denies all the allegations made in the complaint filed under Section 11 & 12 of the Consumer Protection Act, 1986 filed by the complainant and put the complainant to strict proof of his case.  The opposite party states that he is not able to admit that the complainant took dinner along with his family on 25.05.2014 for a sum of Rs.3,946/- since he has not produced the bill when it was demanded through the reply legal notice dated:15.07.2014.   The charging of 5% towards service charge is not illegal.   All the Hotels collect service charge and the service charge is clearly mentioned in the menu card.  The opposite party states that the Hotel Management cannot force the customer to pay service charge without providing the option of self service.   There is a clear display that the Hotels take service charge when the food is served in Fine Dining Restaurant.  The staffs of the opposite party insisted the complainant to pay the entire amount of the bill including the disputed service charge.  It is absolutely unfair to suggest that the Hotel Management can force the customer to pay service charge without providing the option of self service.  The opposite party states that the collection of service charge cannot be termed as unfair trade practice and the allegation that the customer cannot be forced to pay tips under guise of service charge can be termed as unfair trade practice.  It cannot be at any stretch of imagination that the collection of service charge is to illegally exploit the Customer and file the provision of the Customer Protection Act.   Hence, the above complaint is liable to be dismissed with cost.

3.     To prove the averments in the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A6 are marked.  Inspite of sufficient time is given the opposite party has not filed his proof affidavit within the stipulated time and hence it is concluded as ‘No Proof Affidavit’ on the side of the opposite party. 

4.      The points for consideration is:-

1. Whether the complainant is entitled to get refund of a sum of Rs.176/- collected towards service charge  as prayed for?
2. Whether the complainant entitled to a sum of Rs.75,000/- towards compensation for deficiency in service with cost as prayed for?

5.      On point:-

  The opposite party after due service of notice entered appearance and filed written version.  But the opposite party miserably failed to file proof affidavit and documents to prove the contentions raised in the written version.  The complainant has filed his proof affidavit, documents and written arguments.  Heard the complainant Counsel also.   Perused the records namely; the complaint, written version, proof affidavit and documents of the complainant.  The complainant pleaded and contended that he is an Advocate took dinner in the opposite party’s restaurant along with his family members on 25.05.2014 is admitted.   After the dinner, the staff of the opposite party generated the bill to the tune of Rs.3,946/- in which, a sum of Rs.176/- i.e. 5% of the total amount of food was added as service charge apart from VAT and service tax.   Ex.A1 is the copy of hotel bill.  When the complainant questioned the service charge, with the opposite party’s staff they informed that it is nothing but tips to the staffs.  The complainant paid the bill amount through his debit card.  Ex.A2 the copy of bank receipt.  On 02.06.2014, the complainant issued notice to the opposite party questioning the legality of charging extra amount towards service charge as per Ex.A3.  For which, the complainant received a reply dated:15.07.2014 from the opposite party as per Ex.A5.  In which, it is admitted that the collection of 5% towards service charge is a ‘universal phenomenon’ and a practice to regulate the staff from getting heavy tips from the customers. 

6.     The Government of India, Labour Department also sent a letter dated:23.09.2014 as per Ex.A6, wherein it is stated as follows:

“In the light of the above, the Deputy Commissioner of Labour-1, Chennai was instructed to inspect on issues like the authority under which the service charges of 5% are levied on the customers under the guise of payment as tips to the workers, whether they have consulted the workers and whether such amount collected is being disbursed to the workers.  The Deputy Commissioner of Labour-1, Chennai inspected with a team of officers on 09.09.2014 and submitted a report.  The report states that the 5% service charges are collected suo-motto and that 80% of the amount collected is spent for the workers and 20% is spent on maintenance of road block.   The management has not produced wages register to the inspecting authorities for verification whether the service charges form a component of wages. 

Hence, it is informed to the Government that the Deputy commissioner of Labout-1, Chennai has been instructed to initiate penal action for non production of records.  Further, a letter has been sent to the Commercial Taxes Department for taking necessary action on collection of service charges in addition to service tax and VAT by the hospitality industries” proves the restrictive trade practice adopted by the opposite party by way of collecting service charge which amounts to deficiency in service.  The complainant is praying to refund of the service charges collected by the opposite party with a compensation of Rs.75,000/- with cost.

7.     The opposite party has not filed any proof affidavit and documents to prove the contentions raised in the written version.   As per the report of the Government of India, Labour Department, the collection of service charge amounts to restrictive trade practice.  Considering the facts and circumstances of the case, this Forum is of the considered view the opposite party shall pay a sum of Rs.176/- with interest at the rate of 9% p.a. with a compensation of Rs.10,000/- towards mental agony and cost of Rs.5,000/- to the complainant.

In the result, this complaint is allowed in part.  The opposite party is directed to pay a sum of Rs.176/- (Rupees One hundred and seventy six only) being service tax collected with interest at the rate of 9% p.a. from the date of complaint (i.e.) 18.10.2014 to till the date of this order (i.e.) 15.03.2019 and to pay a sum of Rs.10,000/- (Rupees Ten thousand only) towards compensation for mental agony with cost of Rs.5,000/- (Rupees Five thousand only) to the complainant.

The aboveamounts shall be payablewithin six weeks from the date of receipt of the copy of this order, failing which, the said amounts shall carry interest at the rate of 9% p.a. to till the date of payment.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 15^th day of March 2019. 

 

MEMBER                                                                  PRESIDENT

 

COMPLAINANT SIDE DOCUMENTS:-

Ex.A1	25.04.2014	Copy of Hotel Bill
Ex.A2	25.04.2014	Copy of Bank receipt
Ex.A3	02.06.2014	Copy of legal notice
Ex.A4	June 2014	Copy of acknowledgement card
Ex.A5	15.07.2014	Copy of reply notice
Ex.A6	23.09.2014	Copy of letter from the Labour Department

 

OPPOSITE PARTY SIDE DOCUMENTS:- No Proof Affidavit

 

 

MEMBER                                                                  PRESIDENT