Page 56 - The Insurance Times July 2025

Legal Briefs

Flier compensated for lost baggage: of the goods is upon the bailee under Sections 151 and 152
of the Contract Act, 1872," he said.
What does this 'landmark' verdict
The case illustrates how operators "cannot take advantage
mean? of terms and conditions to give a lesser compensation than

The Delhi State Consumer Commission last month asked low- the damage incurred by the customer," especially when such
cost airline SpiceJet to pay Rs 2 lakh compensation to a pas- terms are not reasonably visible.
senger for losing his checked-in baggage that contained gold "The operator of the airline is solely responsible for the
jewellery and expensive clothes. Legal experts believe the
handling of the baggage and the same should be done dili-
case could shape how airlines handle compensation claims. gently. The aggrieved consumer need not claim only the
"This case holds significant importance for consumers, par- actual damages incurred, but can also claim mental harass-
ticularly concerning their rights when engaging with service ment caused by the loss of such goods," said Khabar.
providers such as airlines. It firmly establishes that service
providers cannot unilaterally impose terms and conditions Insurer held liable for delay in claim
without ensuring they are adequately brought to the settlement
consumer's notice," said Chirag Gupta, associate partner at
Ramesh Kanji Cham owned a motor vessel named "Miraj",
law firm Alpha Partners.
which he used in theshipping business to transport materi-
Gupta said the airline failed to show that liability-limiting als. Cham insured the boat with National Insurance from
conditions were properly disclosed. "This judgment reaffirms February 8, 1997, to February 7, 1998.
a fundamental duty of care upon service providers for goods
entrusted to them, acting as bailees," he said. On May 11, 1997, the vessel, which was docked at Abra
Berth near Deira in Dubai Creek, keeled over on its left side.
Alay Razvi, managing partner at Accord Juris, said the Upon learning about the mishap, Cham immediately noti-
commission's ruling (On May 27) clarifies disclaimers must be fied the insurer and later submitted all the requisite docu-
clearly disclosed. "Terms significantly affecting liability like 'no ments. He registered a Marine Hull claim for DHS 7.56 lakh
valuables in checked baggage' must be clearly and promi- (about Rs. 73 lakh).
nently communicated, not buried in fine print," Razvi said.
After five years of protracted correspondence, the insurer of-
Airlines are obliged to deliver baggage safely, said Razvi. "A fered to pay only Rs. 21.44 lakh. Cham requested that this
failure to do so is actionable as a deficiency in service. Even amount be released as an interim payment and sought reim-
standard airline claims like liability per kg can be overrid- bursement of the full claim of Rs. 73 lakh. Upon receiving the
den by consumer commissions upholding statutory rights and Rs. 21.44 lakh, he protested against the shorfall and requested
broader standards of fairness." a detailed computation and an explanation for the deduction.
Razvi noted that "compensation isn't limited to tangible The insurer responded that it had re-examined the claim and
losses, mental agony from such incidents can fetch substan- had settled it in accordance with the surveyor's assessment.
tial damages," referring to the Rs 1.5 lakh awarded for Aggrieved, Cham approached the Gujarat State Commission,
mental harassment in the SpiceJet case. alleging that the remaining Rs. 52 lakh had been wrongly with-
Harsh Khabar, an advocate at the Delhi High Court, ex- held by adopting unfair trade practices. He stated that although
plained the legal framework applied by the commission "The he had protested against the shortfallin payment, he had signed
District and State forums emphasised the onus to take care the discharge voucher due to financial constraints.

50 July 2025 The Insurance Times