Hotel liable for guest's car loss even if the parking is free

Sapan Dhawan owned a Maruti Zen, 1997 model. The car was insured with United India Insurance. When Dhawan went for dinner to Taj Mansingh Hotel, Delhi, he entrusted the car for valet parking. He was issued a token for the same. After dinner, when he sought the car keys, he was informed that the vehicle had been stolen. 

Dhawan lodged a claim with United India Insurance. The insurer settled the claim of Rs 280,000. However, the insurer obtained a power of attorney and a letter of subrogation from Dhawan to get the right to the vehicle, in the event it was traced, or to claim the amount from Taj Hotels.

Thereafter, United India, along with Dhawan, filed a joint complaint before the Delhi State Commission against Taj Mahal Hotel, as well its insurer New India Assurance, alleging that the hotel had failed in its duty to take care of the vehicle while Dhawan was having dinner.

Taj Hotels sought a dismissal of the complaint on grounds that Dhawan could not be termed a consumer, as no consideration was charged for the valet parking facility. Besides, the parking tag clearly indicated that the vehicle was being accepted at the owner's risk for parking, either inside or outside the hotel premises. The tag also mentioned that the hotel would not be liable for theft or damage to the vehicle. It also contended Dhawan was not entitled to make any claim as he had received the insured value and had surrendered his right in favour of the insurer. New India Assurance supported the hotel's stand, contending that parking was complimentary and not a service. 

The Delhi State Commission observed that the price paid for the food would include the cost of providing valet parking service. The printed tags on the parking ticket would be of no help to the hotel, as the law of bailment would apply, making it liable as a bailee for safe custody of the vehicle. New India was exonerated of liability since the hotel had not intimated the loss. Hence, the State Commission directed Taj Hotels to reimburse United India Insurance the claim amount of Rs 280,000, together with 12 per cent interest from January 28, 1999, and Rs 50,000 towards litigation costs. The Commission further directed Taj Hotels to pay Rs 100,000 to Dhawan as compensation. A period of thirty days was given for compliance, or else the amounts would carry 24 per cent interest for the period of delay.

Taj Hotels appealed to the National Commission, contending that there was no proof that Dhawan had consumed food, so he could not be termed a consumer. Dhawan, on his part, had not retained the bill for his dinner. But this defence was an afterthought. 

The National Commission observed that even though there wasn’t any separate payment for valet parking facility, the hotel allures customers by providing such service. So, a person entrusting the vehicle for parking would be a consumer. The hotel owed a duty to ensure the safe keeping of the vehicle. Merely stating that parking was ‘at owner's risk’ would not absolve the hotel of its liability.

Accordingly, by its order of February 5, 2018 delivered by M Shreesha, the National Commission upheld the order, but lowered the interest rate to 9 per cent on the compensation awarded and 12 per cent for the period of delay.

The writer is a consumer activist