Case Study 06: Why Liability Insurances are vital for every Tour Operator.
Case Note:
Jai Dev v. Tour Operator, 2024
SCC Online NCDRC 125
Background
The complainant booked a tour package for his family with a tour operator for travel between July 5 and July 9. He paid INR 12,000 in cash and INR 41,392 via cheque, totaling INR 53,392. Upon receiving the air tickets, he noticed discrepancies — including the return flight being booked with SpiceJet instead of Indian Airlines as promised. No details about hotel accommodation or a local contact in Srinagar were provided.
On arrival, the complainant’s family was left stranded at the airport without arrangements. They arranged their own accommodation and transportation, incurring additional costs. A legal notice was issued, and a consumer complaint was filed for refund and compensation.
Proceedings Before Consumer Forums
The District Consumer Forum found that the package was booked individually (not as a group tour) and identified a clear deficiency in service. They awarded INR 41,002 (after adjusting for partial service availed), INR 63,500 for extra expenses, and INR 2,50,000 as compensation for mental agony.
The State Commission, on appeal by the opposite parties (OPs), reduced the compensation to INR 63,500, considering INR 2,50,000 excessive. This was done without the complainant’s consent.
Revision Petition Before NCDRC
The complainant challenged the State Commission’s decision at the NCDRC, arguing the reduction was arbitrary. The NCDRC agreed, restoring the District Forum’s original order.
Judgement
The OPs were directed to pay:
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INR 41,002 as adjusted booking amount
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INR 63,500 for additional expenses
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INR 2,50,000 as compensation for mental agony
Plus 6% interest from the date of the District Forum’s order until payment (9% if delayed beyond 30 days).
Significance
This case highlights the duties and liabilities of tour operators under consumer law. It reaffirms that if a service provider fails to deliver what was promised — especially in prepaid travel arrangements — they are liable for both financial and emotional losses. It underscores the importance of consumer forums, fair decision-making, and adherence to natural justice.
Why Insurance is Important for Tour Operators
This case shows the importance of professional liability insurance for tour operators.
In the event of service failures, travel disruptions, or legal claims — whether due to negligence, third-party defaults, or unforeseen events — such insurance offers protection against compensation payouts and litigation costs.
It not only ensures business continuity in the face of consumer claims but also strengthens credibility and trustworthiness in the marketplace. As demonstrated in this case, even a single dissatisfied customer can cause significant financial loss and reputational harm. Such risks can be effectively mitigated through appropriate risk management measures, including professional liability insurance.
Contact:
Mr. Akarshit Sonkar – M: +91 9582743333 or E: akarshit@safetree.in
Ms. Gunjan Hans – M: +91 9899044229 or E: gunjan.hans@safetree.in
