Hotels are liable for theft of guest’s vehicles

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In a recent judgment, the Supreme Court held that in a case of theft of a vehicle given for valet parking, the hotel owner cannot contract out of liability for its negligence, or that of its staff, for a vehicle of its guest in any circumstance. Once possession of the vehicle is handed to the hotel staff or valet, there is an implied contractual obligation to return the vehicle in a safe condition upon the direction of the owner.

In Taj Mahal Hotel v United India Insurance Company Ltd & Ors, on the night of 1 August 1998, respondent No. 2 (complainant No. 2) visited the Taj Mahal Hotel in his Maruti Zen car, which was insured with United India Insurance (respondent No. 1/complainant No. 1). Upon reaching the hotel, respondent No. 2 handed over his car and its keys to the hotel valet for parking, and then went inside the hotel. When respondent No. 2 came out of the hotel at about 1am, he was informed that his vehicle had been driven away by another person.

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The dispute digest is compiled by Bhasin & Co, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in. Readers should not act on the basis of this information without seeking professional legal advice.

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