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Hotel Hyatt Regency v. Atul Virmani
Factual and Procedural Background
The case concerns the theft of a car entrusted by Mr. Atul Virmani to the valet service of the Hyatt Regency Hotel in Delhi. Mr. Virmani had paid Rs. 900 as an entry fee to the hotel’s discotheque, which he contended included safe parking of his Maruti Gypsy. Upon arrival, he handed over the car keys to the hotel’s uniformed valet, receiving a docket as a receipt. When he returned after a few hours and presented the docket, the valet informed him that the car was missing from the parking lot. The hotel acknowledged the incident but denied liability, stating that the valet service was free and that the parking was at the owner’s risk as indicated on a disclaimer printed on the docket. The State Consumer Commission found the hotel deficient in service and ordered compensation of Rs. 2,00,000 plus interest and costs. The hotel appealed against this order.
Legal Issues Presented
- Whether the Five Star Hotel is liable for loss caused by theft of a vehicle when the customer entrusted the car keys to the hotel’s valet for parking.
- Whether the disclaimer printed on the docket absolves the hotel of liability for theft or damage to vehicles parked by its valet.
- Whether the provision of free valet parking service alongside other paid services at a Five Star Hotel constitutes a service under the Consumer Protection Act, 1986, attracting liability for deficiency.
Arguments of the Parties
Hotel's Arguments
- The valet parking service was provided free of charge and thus the complainant is not a consumer under the Consumer Protection Act, 1986.
- The fee of Rs. 900 paid by the complainant was only for the discotheque entry and did not include parking charges.
- The hotel was not legally bound to keep the vehicle on its premises or guarantee its safety.
- A disclaimer printed on the reverse of the docket clearly stated that parking was at the owner’s risk and the hotel disclaimed responsibility for theft or damage.
Complainant's Arguments
- The Rs. 900 fee paid included safe parking as part of the overall service.
- The complainant entrusted the car keys to a uniformed valet who represented the hotel, creating an expectation of safety and care.
- There was no reasonable opportunity to read the disclaimer on the docket at the time of handing over the keys.
- Five Star hotels charge high prices for their services, including free services like valet parking, which are compensated through other charges, thus creating a consumer relationship under the Act.
- The vehicle was insured only against third party risk, so the complainant cannot claim from the Insurance Company for theft.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bombay Brazzerie v. Mulchand Agarwal, I (2003) CPJ 4 (NC) | Compensation for mental tension and harassment due to deficiency in service; Insurance company cannot be a consumer under the Consumer Protection Act. | The court relied on this precedent to reject the hotel’s contention that the complainant could not claim compensation due to insurance coverage and to affirm entitlement to compensation for deficiency in service. |
| Mahesh Enterprises v. Arun Kumar Gumber, 11 (2001) CPJ (NC) 1 | Liability for loss under bailment where parking area management is responsible for the vehicle. | The court used this precedent to confirm that the facts constituted bailment and that the hotel was liable for loss due to negligence of its staff. |
| Savita Garg (Smt) v. Director, National Heart Institute, (2004) 8 SCC 56 | Hospitals liable for deficiency in service even for free services due to subsidy; negligence leads to liability. | The court applied this principle analogously to hold that even if valet parking was free, it forms part of the overall service for which the hotel is liable for deficiency under the Consumer Protection Act. |
Court's Reasoning and Analysis
The court examined the facts and noted that the complainant had paid for other services at the hotel, including a substantial fee for discotheque entry, and had used the valet parking service by handing over his car keys to a uniformed hotel employee. The court observed that the disclaimer printed on the docket was in small letters and that consumers have little opportunity to read or understand such disclaimers when handing over their car keys. The court emphasized that the presence of a uniformed valet creates an expectation of safety and responsibility on the part of the hotel. The court further reasoned that the hotel’s provision of free services like valet parking is effectively compensated through high charges for other services, thus constituting a service under the Consumer Protection Act. Drawing on precedents related to bailment and deficiency in service, the court held that the hotel was negligent in allowing the theft of the vehicle and was liable to compensate the complainant. The court also noted the absence of any conspicuous notice warning customers that the hotel disclaims responsibility for the safety of vehicles.
Holding and Implications
The appeal filed by the hotel is dismissed.
The court upheld the order of the State Commission holding the hotel liable for deficiency in service due to negligence in safeguarding the vehicle entrusted to its valet. The hotel is responsible to compensate the complainant for the loss caused by the theft. The decision affirms that provision of free ancillary services by a Five Star hotel, when bundled with other paid services, attracts liability under the Consumer Protection Act for deficiency in service. No new precedent was set beyond the application of established principles of bailment and consumer protection. There is no order as to costs.
Pd Shenoy, Member:— The issue involved in this case is if the keys of the car given by the customer of a Five Star Hotel for parking to the uniformed valet of the hotel is stolen whether the Five Star Hotel is responsible for making good the loss to the consumer.
Facts of the case in brief are as follows:
Mr. Atul Virmani came to Delhi by his Maruti Gypsy, which he had purchased from Rohan Motors, Dehradun for Rs. 2,86,395. It is the say of the complainant that accessories worth Rs. 50,000/- were installed in the said vehicle which was insured against third party claim but the peril of theft was not included in the policy.
The case of the complainant is that on 18.9.1996 at about 11.15 p.m he visited the Hyatt Regency (the Hotel) by paying a fee of Rs. 900/-. According to the complainant this fee included the entrance fee as well as for the safe parking of the vehicle. On arrival at the hotel the representative of the hotel demanded the key of the vehicle for parking the vehicle at the parking lot in safe custody. Therefore, the complainant delivered the possession of the vehicle to the representative of the hotel who drove the car to the parking lot. The valet had issued a docket as receipt for delivery of the vehicle to the complainant which he had to produce while checking out of the hotel. When the complainant came out of the hotel at 1.40 a.m on 19.9.1996 and presented the docket to the valet who had the key of the car, the latter informed him after half an hour that the car of the complainant was missing from the parking place. The hotel staff also informed that the vehicle of the complainant was permitted to go from the parking place between 12.20 a.m to 12.40 a.m on 19.9.1996 and there is an entry in the register regarding the checking in and checking out of the vehicle. The hotel staff called the police and a report was dictated by the staff of the hotel and was signed by the complainant. According to complainant vehicle contained Rs. 2,500/- in cash apart from the driving licence of the complainant.
The case was contested by the hotel stating that valet service rendered was a free service and the complainant is not a consumer under the Consumer Protection Act, 1986. The hotel authorities admitted that the complainant had visited on 18.9.1996 and handed over the keys of his Maruti Gypsy to the valet on duty for the purpose of getting the vehicle parked. The valet had handed over the docket to the complainant but no monetary consideration or parking fee was charged. Hotel authorities were not legally bound to keep the vehicle in the hotel premises. It was also stated that on the reverse of every car docket issued to the visitors, a disclaimer notice is printed through which the visitors were informed that the vehicle could be parked within the hotel premises at their own risk and that the hotel would not be liable for the loss or damage to the vehicle parked. It was further submitted that the complainant had gone to the discotheque by paying entry free of Rs. 900/- which was charged only for the use of discotheque which did not include any parking fee.
The State Commission after going through records and hearing the counsel for the parties held that there was deficiency in service by the hotel in not ensuring the safety of the car entrusted to their custody. Accordingly, the hotel was directed to pay the complainant a sum of Rs. 2,00,000/- along with 10% interest from the date of the theft till the date of the payment with Rs. 5,000/- as cost.
Aggrieved and dissatisfied by the order of the State Commission the hotel has filed appeal before us.
The learned counsel for the hotel brought to our notice a copy of the token/car docket issued to those who use the valet facilities wherein on the reverse of the docket a notice/disclaimer is printed wherein it is mentioned as follows:
1. Parking of vehicle is entirely at owner's risk. Hotel Hyatt Regency Delhi/Asian Hotels Limited disclaim all responsibility for any theft/damage or destruction of the vehicle/its contents caused by fire, third party acts, force majeure or any other cause whatsoever.
2. Vehicle owners are advised not to leave any valuable items in the vehicle at the time of parking.
3. The vehicle is being permitted to be parked in the hotel area on the premise that the vehicle does not contain any firearms, explosive or narcotics substances.
Owners — Asian Hotels Ltd.
He further brought to our notice the judgment of the National Commission in Bombay Brazzerie v. Mulchand Agarwal I (2003) CPJ 4 (NC) wherein it was held as follows:
“Keeping in view the aspect of ‘consumer factor’ or ‘consumer component’ of ‘consumer surplus’ as aforementioned we are of the opinion that Mulchand is certainly entitled to compensation for the mental tension, harassment and inconvenience caused to him. Mulchand has claimed Rs. 25,000/- but in our view award of Rs. 10,000/- will meet the ends of justice. There cannot be any standard for measuring damages in such a situation.
In the complaint Insurance Company has also been added as co-complainant by Mulchand. It was submitted by Mr. Vishnu Mehra, learned counsel appearing for the Insurance Company that in case Consumer Forum allows the complaint and grants compensation, Insurance Company is entitled to be reimbursed inasmuch as the price of the car had since been paid by the Insurance Company to Mulchand. We are unable to appreciate such an argument. For one thing if the complainant Mulchand had been paid price of the car by the Insurance Company under the policy of insurance he cannot claim the same amount again in the complaint on a pretext as a consumer under the Consumer Protection Act, 1986. He cannot get better right by also adding the Insurance Company as co-complainant Insurance Company cannot be a consumer under the Consumer Protect Act and has certainly no cause against Hotel. We cannot allow the complainant to enrich himself when we find that he had already received the price of the car from the Insurance Company. If the Insurance Company is of the view that fault lay with the Hotel it could bring a civil suit against the Hotel and could implead Mulchand complainant as well, but Mulchand cannot file his complaint for the benefit of the Insurance Company.
We, therefore, allow this appeal and set aside the order of the State Commission except to the extent of Rs. 10,000/- which amount Mulchand, complainant shall be entitled from the appellant. We make no order as to costs.”
Submissions of the learned counsel for the respondent:
Learned counsel for the respondent submitted that the fees of Rs. 900/- paid for entering discotheque includes charges for any service rendered by the hotel. No customer would visit the hotel and use the valet facility unless he is sure that the car is safe. There is no time for any customer to read the reverse of the docket in detail at the time of handing over keys of the car. When a person goes to a Five Star hotel he does not just pay for the food served he pays for the general atmosphere, air condition, decoration, safety and total environment of the hotel. He submitted that his car was insured only for third party risk and accordingly he will not be in a position to claim any compensation from the Insurance Company.
FINDINGS
Hotel Hyatt Regency is currently known as only Hyatt. This hotel is one of the hotels run by the chain of hotels in different countries. In fact, the name Board does not mention that it is a ‘hotel’, it is only called Hyatt because it is so famous and so popular that there is no need to mention the word ‘hotel’. The five star hotels provide several facilities as the customers pay heavy price for room rent, meals etc. They provide some facilities free of cost like newspapers in the hotel room, complimentary fruit basket and mineral water bottles. Similarly, left luggage facility for a few hours after early checking out is also provided and so also valet parking facilities. These so called free services are not actually free because they are more than made up by exorbitant rental charges, very high charges for food and very high entrance fee for discotheque etc.
It is not in dispute that the complainant had used the hotel facilities by paying Rs. 900/- as entry fee to discotheque in addition he must have spent money for his food. The hotel does not dispute that the car key was taken by the valet of the hotel and vehicle was not delivered to the owner who had the docket. It is due to sheer negligence of the hotel staff that they had allowed the car to be stolen and taken out by some unauthorized person for which there was an entry in their register.
We have only perused copy of the sample docket where in small letters disclaimer is written. Those who visit Five Star hotels and use the car parking facilities are aware that after the car keys are given to the valet there is hardly any time for the consumer to read docket conditions written on the reverse of the docket because there would be a fleet of cars entering and exiting from the hotel. When a uniformed liveried valet with his imposing figure asks for the car keys he exudes confidence in the consumer and therefore, for the management of a Five Star Hotel to shirk the responsibility of the safety of the car parked in their premises does not augur well. The hotel is liable for the negligence of its staff.
This view is fortified by the decision of this Commission in Mahesh Enterprises v. Arun Kumar Gumber 11 (2001) CPJ (NC) 1 wherein it was held that
“In our opinion, in the facts and circumstances of the case, the State Commission was legally right in holding that the facts and the circumstances would constitute bailment and the person responsible for the management of the parking area was liable to make good the loss.”
In Savita Garg (Smt) v. Director, National Heart Institute. (2004) 8 SCC 56 Apex Court held that
“If hospital authorities charge high fee for treating some of the patients and do not charge fees for some patients then there is a subsidy provided to the patients who are treated free of charge and if there is negligence in treating those patients free of charge is also be covered by the deficiency in service and the hospital would be liable for medical negligence and payment of compensation.”
In view of the above Judgment even though the hotel might have provided valet parking facilities free of charge still it would be covered by the deficiency of service under Consumer Protection Act, 1986 as it is charging for other services at a very high rate.
If the hotel authorities cannot keep the car safely they should have put a big board at the entrance of the hotel proclaiming “Beware giving car keys to the valet of this hotel does not ensure safety of your car, Management is not responsible for theft of the car”. This has not been done by the hotel.
Therefore, we do not see any illegality, material irregularity or jurisdictional error in the order passed by the State Commission. Resultantly this appeal is dismissed. There shall be no order as to costs.
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