Who Is Liable When A Car Is Stolen From A Hotel's Valet Parking?

In a major win for consumers, the District Consumer Disputes Redressal Commission in North Chennai held Deccan's Park Hotel accountable for a car theft. The commission ruled that the hotel's valet service was a letdown, leading to vehicle theft due to negligence.

Highlighting that valet duty goes beyond parking, the commission stressed the hotel's responsibility for the car's safety. The hotel was ordered to pay Rs 55,000, as compensation to the peeved customer.

This raises a crucial question: What is the established legal position on liability when a vehicle is stolen from a hotel's valet parking?

To answer it is essential to understand the concept of deficiency in service.

Deficiency of service means things going wrong while buying something, like a train ticket, using a bank, getting legal help, using electricity, building a house, going to school, catching a flight, staying at a hotel, dining out, or enjoying entertainment.

It can cause small inconveniences, serious problems like injuries or, in extreme cases, even death. This can lead to legal consequences.

If one pays a hotel for services like parking or meals, one becomes a consumer under law. This means a person has special rights and protections according to the Consumer Protection Act.

So, if something doesn't go right, a person has legal ways to address it. It's like a safety net for when a paid service doesn't meet expectations.

Hence, valet parking services offered by hotels are a special privilege for the convenience of their guests, according to Aslam Ahmed, partner at Singhania & Co. Duty of care of the hotel extends beyond the mere act of parking the car, he explained.

In the Supreme Court case of Taj Mahal Hotel vs United India Insurance Co. & Others, the court decided that a hotel can't avoid responsibility by blaming things on third parties, or using an owner's risk clause, unless they meet certain duties laid out in Sections 151 and 152 of the Indian Contract Act, 1872.

This means that if a customer has given their car to a hotel's valet or staff, there's an unspoken agreement (contractual duty) that they should return it safely when asked for.

The hotel owner can't say it's not their problem, especially if the negligence (carelessness) is on their part or their staff's part. So, they can't escape responsibility for what happens to a customer's vehicle while it's in their care.

The Supreme Court had held that where the hotel actively undertakes to park vehicle for the owner, keep it in safe custody and return it upon presentation of a parking slip, in such a manner that the parking of vehicle is beyond the control of the owner, a contract of bailment is created, said Shashank Agarwal, advocate at Delhi High Court.

Due to the contract of bailment created, it would also be immaterial if the customer pays for the valet parking service, or if it is complimentary.

Firstly, if you're at a hotel using their services and happen to park your car, while paying for something else, you've effectively paid for parking too, as per Ahme.

Secondly, in cases such as Bombay Brazzerie vs. Mulchand Agarwal and B. Dutta, Senior Advocate vs Management of State, the court talked about something called "bailment." It's when a customer gives their belonging to someone for a specific purpose, and the service provider promises to give it back, or handle it according to the customer's instructions.

So, if one pays to park a car in a hotel and unfortunately it gets stolen or damaged, the laws of bailment come into play, the court said.

In simple terms, if a customer pays for food or any other service at a hotel, it constitutes entering into an agreement. The money paid covers not just the food, but also an agreement that the hotel will take care of the customer's car.