HospitalityBiz India
Hotels FoodService Operations Ministry Associations Equipment Editorial HR Technology Technology Advisory Board Community
Follow us on Facebook Follow us on Twitter instagram
    Home > Expert Speak

Legal Obligations of Lost Properties - infra hospitium

Monday, December 30, 2019, 14:47 Hrs  [IST]

Whilst the growth of consumerism in India has led to increased accountability, it has also resulted in a spurt of consumer disputes. Consumers are increasingly becoming aware about the legal remedies and rights available to them. The hospitality industry, being a consumer centric industry, is not immune from consumer disputes. In Taj Mahal Hotel vs. United India Insurance Company Limited and Others, the Supreme Court recently (and reportedly for the first time) considered a hotel's liability for a guest's car which was given to the hotel's valet and stolen from the car parking.

An individual (Guest) had visited the Taj Mahal Hotel (Hotel) and handed over his car and keys to the hotel valet for parking. He was handed a parking tag which indicated that the car was being parked at his own risk and that the management would not be responsible for any loss, theft or damage to the car. Upon completion of his visit at the Hotel, when the Guest called for his car, he was informed that his car was driven away by another person. Such person, who was also a visitor at the Hotel, picked the Guest's car keys from the desk, went to the car park and stole the Guest's car. The Guest and the insurance company with whom he had insured his car, filed a consumer complaint against the Hotel for deficiency in service.

Applying the principal of strict liability for property kept infra hospitium (within the hotel), the National Consumer Disputes Redressal Commission (NCDRC) held that the Hotel was liable to make good the loss on account of the stolen car. The NCDRC held that the Hotel had failed to exercise the 'duty of care' and mere printing of 'owner's risk' on the parking tag did not absolve the Hotel of its liability as the loss of the car from its parking space was on account of its negligence. Aggrieved by the order of the NCDRC, the Hotel filed an appeal before the Supreme Court.

What the Supreme Court held?
The Supreme Court held that the failure of a hotel to return a guest's vehicle strikes at the root of the bailment relationship between the hotel and the guest and gives rise to a prima facie case of negligence against the hotel. However, in such a case it is open for the hotel to exclude its liability by proving that the loss did not occur due to any fault or negligence on its part. Thus, the Supreme Court deferred from the strict liability rule adopted by the NCDRC. In the Supreme Court's view, making the hotel strictly liable for the safety of vehicles of guests without proof of negligence on the hotel's part would lead to grave injustice.

Importantly, the Supreme Court opined that a contract of bailment exists between a hotel and its guests in respect of the parking of the guest's cars by the hotel. Accordingly, the hotel would be liable as a bailee for returning the car in the condition it was delivered in accordance with the duties of a bailee under the Indian Contract Act, 1872 ("Contract Act"). The Supreme Court was also of the view that the fact that the parking facility was a complimentary service would not obviate the bailment relationship as services offered gratuitously also benefit hotels.

As regards exclusion of liability by the Hotel, the Supreme Court observed that it was not open for the Hotel to contract out of the standard of care required to be taken by it as a bailee under the Contract Act. Hotels could however disclaim liability towards vehicles of guests on account of a loss occasioned by a third party, contributory negligence or unforeseen circumstances. Noting that the Hotel had failed to prove that the loss of the Guest's car was not on account of fault or negligence on its part, the Supreme Court held that it should be liable due to want of requisite care towards the car bailed to it.

Impact of the decision
The hospitality industry is susceptible to claims on account of loss of goods of the guests. Thus, in the backdrop of the aforesaid decision, it would be important for hotels to evaluate whether they have adequate checks and balances in place to meet the requisite duty of care of a bailee under the Contract Act. Even the Supreme Court was of the view that the responsibility of 5-star hotels to take reasonable measures is greater as higher prices imply a higher degree of care.

The views expressed within this column are the opinion of the author, and may not necessarily be endorsed by the publication.

Print News Email News Back
Bookmark to Add to NewsvineNewsvine Bookmark with Digg ItDigg
Add RSS to Add to Google Add to My Yahoo! Subscribe with Bloglines Subscribe
* Name :    
* Email :    
* Message :  
»  The Imperial New Delhi appoints Louis Sailer as Senior Executive Vice President
»  Mayfair Hotels & Resorts announces new senior-level appointments
»  Sheraton Grand Pune welcomes Erica Gomes at the Senior Sales Manager
»  IHCL Elevates Vincent Ramos As Senior Vice President - Goa
»  Lords Hotels and Resorts elevates employees into Senior Management position
»  Mercure Chennai Sriperumbudhur appoints Swarnalatha Siddharthan as Associate Director of Sales
»  Atmosphere Gears Up For Expansion; Welcomes Senior Industry Veterans
»  Sayaji Hotels Ltd. appoints Girish Menon as Associate Director - Development
»  Absolute Hotel Services India appoints Avani Dedhia as the Associate Director- Marcom & PR, South Asia & Middle East
»  Senior executive Gaurav Gupta, face of Zomato IPO, quits company
»  The Leela Palaces, Hotels and Resorts announces the appointment of Megha Ajgaonkar as General Manager – Sales
»  Welldercare enters the Indian market, announces LAAS Retirement Resorts for senior living
»  Tourism Emerged As One Of The Fundamental Pillars For Economic Development And Employment Generation: G. Kishan Reddy
»  IAAPI requests PM to save Amusement Park Industry from Economic Roller-Coaster Ride
»  Fairmont Jaipur appoints Jaiveer Singh Rathore as Associate Director of Talent & Culture
»  Mercure Hyderabad KCP appoints Shrutika Shankar as Associate Director of Sales
»  Economic Survey projects GDP rebounding by 11% FY22
»  Oyo hotels has about USD 1 billion to fund operations until IPO, says founder Ritesh Agarwal
»  OYO to focus on vacation homes for driving growth in Europe: Ritesh Agarwal
»  The Leela Palaces, Hotels and Resorts appoints Anupriya Ghosh as Senior Director Revenue Strategy
  The Indian Institute of Architects (IIA) Natcon 2020 virtual event concludes successfully
  Winners of The Park Elle Décor Student Contest felicitated at Indian Design ID 2020
Receive the best of Hospitality content in your mailbox.
Weekly e-Newsletter
Events Calendar

© Copyright 2016 Saffron Synergies Pvt Ltd