Case Study 03 : Why Liability Insurances are vital for every Tour Operator.

Case Note:

Kuoni Travel (India) Pvt. Ltd vs Arun Sinha & Ors. on 23 January, 2012

Revision Petition in National Consumer Disputes Redressal Commission in New Delhi

Facts of the Case

The complainant went ahead and made a claim for a tour package that included Malaysia and Singapore for himself, his wife, and two children with leading travel agency. The complainant faced major problems. He had ordered two rooms for the family but only one room was made available to him. This caused quite a lot of suffering and pain to the complainant which made him to raise a concern regarding service deficiency.

The District Consumer Forum held that the travel agency did not meet the level of service required and ordered the company to pay INR 2,55,000 as compensation. Founding the decision unsatisfactory, the company challenged the decision in the U.P. State Consumer Disputes Redressal Commission which confirmed the decision taken by the District Forum. Therefore, the company also filed a revision petition to the National Consumer Disputes Redressal Commission, citing Section 21(b) under the Consumer Protection Act, 1986.

Issues raised by Complainant

The main issue was whether Indian Tour Operator is liable for any deficiencies in service impacted by non-Indian foreign travel agencies.

Judgement

The National Commission made following key observations –

Responsibility for Deficiency – The travel agency, having entered into an agreement to provide comprehensive services during the tour, bore the responsibility for any lapses.

The agency’s argument that it was merely a ticketing agent and not accountable for the acts of foreign service providers was rejected.

• Jurisdiction – The Commission affirmed the jurisdiction of Indian consumer forums to entertain and decide the case, as the travel agreement was executed in India and the complainant had contracted with the Indian travel agency.

The petition was dismissed, and the compensation awarded by the lower forums was upheld.

 

Conclusion

The judgement reinforces the principle that travel agencies are accountable for the services they contract to provide, even if executed by third-party service providers. It emphasizes the need for such agencies to exercise due diligence and maintain robust mechanisms to address grievances arising from their partnerships.

This case highlights the responsibility of tour operators to ensure quality service, even when third-party providers are involved.

Insurance is crucial for mitigating risks and protecting operators from legal and financial consequences. Insurance provides coverage for liabilities, compensates customers in case of service failures, and safeguards against third-party risks. It ensures business continuity, protects financial resources, and helps manage reputation. In an industry focused on customer satisfaction, having insurance is essential for tour operators to manage risks and maintain trust.

Please contact us to know how the SafeTree Tour Liability Insurance Plans can protect and support your organization.

 

Contact

Mr. Akarshit Sonkar – M: +91 9582743333 or E: akarshit@safetree.in

Mr. Bawa Mohit Singh – M: +91 7447476172 or E: bawamohit.singh@safetree.in