In re Zorro-The Luxury Night Club (a unit of Rudra Hospitality Private Limited) (CCPA)
CCPA Orders Refund and ₹20,000 Penalty for Automatic Service Charge Despite Delhi High Court Ruling; Restaurant Penalised for Automatically Adding Service Charge Without Consumer Consent; CCPA Holds Default Service Charge Through Billing Software Violates Consumer Rights; Automatic Service Charge Declared Unfair Because Consumers Were Forced to Opt Out; Restaurant’s Refund Policy Did Not Cure Illegal Automatic Service Charge, Rules CCPA; CCPA Directs Immediate End to Automatic Service Charge Because Billing Software Added It by Default.
The Central Consumer Protection Authority (CCPA) took cognizance of a consumer grievance alleging that Zorro – The Luxury Night Club (a unit of Rudra Hospitality Private Limited), Gurugram, had automatically added a 10% service charge amounting to ₹805.40 to a bill without the consumer’s consent. The complaint was supported by a copy of the bill. The CCPA noted that the Delhi High Court, by judgment dated 28 March 2025, had upheld the CCPA Guidelines on service charges, holding that mandatory service charges are contrary to law and that all restaurants must comply with the Guidelines. The complaint indicated a possible unfair practice affecting consumers as a class, prompting the CCPA to initiate a preliminary inquiry under the Consumer Protection Act, 2019.
