Man compensated for lost airline baggage: 'Landmark' win for consumers

'Service providers can't hide behind fine print,' say legal experts as SpiceJet is told to pay Rs 2 lakh to passenger

The Delhi State Consumer Commission last month asked low-cost airline SpiceJet to pay Rs 2 lakh compensation to a passenger for losing his checked-in baggage that contained gold jewellery and expensive clothes. Legal experts believe the case could shape how airlines handle compensation claims.

 

“This case holds significant importance for consumers, particularly concerning their rights when engaging with service providers such as airlines. It firmly establishes that service providers cannot unilaterally impose terms and conditions without ensuring they are adequately brought to the consumer's notice,” said Chirag Gupta, associate partner at law firm Alpha Partners.

 

Gupta said the airline failed to show that liability-limiting conditions were properly disclosed. “This judgment reaffirms a fundamental duty of care upon service providers for goods entrusted to them, acting as bailees,” he said.

Hidden disclaimers

Alay Razvi, managing partner at Accord Juris, said the commission’s ruling (On May 27) clarifies disclaimers must be clearly disclosed. “Terms significantly affecting liability like ‘no valuables in checked baggage’ must be clearly and prominently communicated, not buried in fine print,” Razvi said.

 

Airlines are obliged to deliver baggage safely, said Razvi. “A failure to do so is actionable as a deficiency in service. Even standard airline claims like liability per kg can be overridden by consumer commissions upholding statutory rights and broader standards of fairness.”

 

Razvi noted that “compensation isn’t limited to tangible losses, mental agony from such incidents can fetch substantial damages,” referring to the Rs 1.5 lakh awarded for mental harassment in the SpiceJet case.

Legal principles

Harsh Khabar, an advocate at the Delhi High Court, explained the legal framework applied by the commission “The District and State forums emphasised the onus to take care of the goods is upon the bailee under Sections 151 and 152 of the Contract Act, 1872,” he said.

 

The case illustrates how operators “cannot take advantage of terms and conditions to give a lesser compensation than the damage incurred by the customer,” especially when such terms are not reasonably visible.

 

 “The operator of the airline is solely responsible for the handling of the baggage and the same should be done diligently. The aggrieved consumer need not claim only the actual damages incurred, but can also claim mental harassment caused by the loss of such goods,” said Khabar  Business Standard reached out to SpiceJet for a response to the Commission's ruling and related queries, but the airline did not respond till the time of publishing.