High-end hotels which offer valet parking cannot escape responsibility if a guest’s vehicle is stolen or damaged even if the parking slip contains a non-liability clause, the Supreme Court has held.
“In a situation where the hotel actively undertakes to park the vehicle for the owner, keep it in safe custody and return it upon presentation of a parking slip in a manner such that the parking of the vehicle is beyond the control of the owner, a contract of bailment exists. Thus, the hotel would be liable as a bailee for returning the vehicle in the condition in which it was delivered,” a Bench of Justices Mohan M. Shantanagoudar and Ajay Rastogi observed in a recent judgment.
The verdict came in an appeal filed by Taj Mahal Hotel on an incident which happened in 1998. A guest gave his Maruti car for valet parking and returned to find that it was stolen. The hotel staff said a young man had flicked the car keys from the holder, sauntered up to the car and driven off.
“The guest has an implicit expectation that the repute and standards of five-star hotels would entail adequate safety of the vehicles handed over for valet parking... In our view, the standard of care required to be taken by the hotel is sacrosanct and cannot be contracted out of,” the court observed.
Once possession of the vehicle is handed to the hotel staff, there is an implied contractual obligation to return it in a safe condition upon the direction of the owner. “Even where there is a general or specific exemption clause, there remains a prima facie burden of proof on the hotel to explain that any loss or damage caused to the vehicles parked was not on account of its negligence or want of care per Sections 151 and 152 of the Contract Act. It is only after this burden of proof is discharged that the exemption clause can come into force. The burden of proving that such loss or damage was covered by the exemption clause will also be on the hotel,” the Supreme Court held.
The Bench explained that ‘complimentary’ services provided by five-star hotels are not actually free-of-cost. “These services are covered by the exorbitant rates charged for renting of rooms, food, entry fee to lounges and clubs, and so on. It cannot be denied that valet parking service, even if offered gratuitously, benefits the hotel,” Justice Shantanagoudar observed.
The court said an illustrative list of what “reasonable care” of vehicles parked by valets would entail ensuring that the car keys are kept out of reach of outsiders, safe and well-maintained parking zones, CCTV cameras and finally the car is handed over only to those who present the parking slip.
However, the hotel is not responsible for damage caused to a vehicle by an event outside their control like a natural disaster, it said.
