1. In the early 1950’s, the Appellant’s mother (since deceased) took a locker on rent bearing No. A222 in the Deshapriya Park, Kolkata Branch of the Respondent Bank.
2. In 1970, the Appellant/Complainant was included as a joint holder of the locker.
3. On 27.05.1995, the Appellant visited the Respondent Bank to operate the locker and deposit the locker rent.
4. However, the Appellant was informed that the Bank had broken open his locker on 22.09.1994 for nonpayment of rent dues for the period of 1993-1994.
5. Further, that the locker had subsequently been reallocated to another customer.
6. On 29.05.1995 and 02.06.1995, the Appellant sent communications to Respondent claiming that such breaking of his locker by the Bank was illegal since he had cleared dues for 1994-1995 on 30.07.1994, i.e., prior to the breaking of the locker.
7. The Chief Manager of Respondent Bank in the present appeal, responded to the communication and admitted to having inadvertently broken open the locker, though there were no outstanding dues to be paid, and apologised for the same.
8. On 17.06.1995, when the Appellant went to collect the contents of the locker, it is alleged that he found only two (one pair of bangles and one pair of ear pussa) of the seven ornaments that had been deposited in the locker in a nonsealed envelope.
9. However, Respondent Bank contends that only those two ornaments were found in the Appellant’s locker when it was broken open. That the same is evident from the inventory prepared by Respondent when the locker was broken open in the presence of an independent witness.
10. The Appellant filed a consumer complaint before the District Consumer Forum (‘District Forum’) calling upon Respondent to return the seven ornaments that were in the locker; or alternatively pay `3,00,000/- towards the cost of jewelry, and compensation for damages suffered by the Appellant.
ISSUES
- Do banks owe a duty of care towards a locker holder with respect to the contents of the locker?
- Whether or not any compensation can be given for non-compliance with such duty of care?
- Whether the law of bailment is applicable to the bank locker system or not?
LEGAL PROVISIONS
- Section 148 of the Indian Contract Act, 1872 – Definition of bailment, bailor and bailee.
- Section 149 of the Indian Contract Act, 1872 –How delivery is made to the bailee.
- Article 136 Constitution of India – Special Leave to appeal by the Supreme Court.
JUDGMENT:
1. In the present case, it is undisputed that the Respondent Bank inadvertently broke the Appellant’s locker, without any just or reasonable cause, even though he had already cleared his pending dues.
2. Moreover, the Appellant was not given any notice prior to such tampering with the locker. He remained in the dark for almost a year before he visited the bank for withdrawing his valuables and enquired about the status of the locker.
3. Irrespective of the valuation of the ornaments deposited by the Appellant, he had not committed any fault so far as operation of the locker was concerned. In this case the compensation must be awarded to the appellant for the things gone missing from his locker.
4. Thus, the breaking open of the locker was in blatant disregard to the responsibilities that the bank owed to the customer as a service provider. The Supreme Court held that clearly, the relationship between the bank and locker holder is in the nature of the bailor and bailee, even though the bank was not privy to the contents of the locker.
5. The alleged loss of goods did not result from any force majeure conditions, or acts of third parties, but from the gross negligence of the bank itself.
6. It was held that the affidavit furnished by the locker holder should be accepted for proving the contents of the locker. The Court fully agreed to the decision of NCDRC and also said that the dispute is now left open before the civil court to decide on the merits of the case.
7. Pronouncing the decision, the court said that banks as service providers under the Consumer Protection Act, 1986, are under the obligation to exercise due diligence in maintaining and operating their locker systems.
8. It is case of gross deficiency in service on the part of the bank.
9. In addition to this, the Apex Court imposed a cost of Rs. 5,00,000/- on the bank which they must pay to the Appellant as compensation and said, ‘This amount shall be deducted from the salary of the concerned officers if they are still in service. If the officers have already retired, then the amount should be paid by the bank. Additionally, the Appellant shall be paid a sum of Rs. 1,00,000/- as litigation expense and mental agony.’
THE COURT FURTHER DIRECTED RBI:
The RBI lays down comprehensive directions mandating the steps to be taken by banks with respect to locker facility/safe deposit facility management. The banks should not have the liberty to impose unilateral and unfair terms on the consumers. In view of the same, RBI was directed to issue suitable rules or regulations as aforesaid within six months from the date of this judgment. Until such Rules are issued, the principles stated in this judgment, in general and at para 13 in particular, shall remain binding upon the banks which are providing locker or safe deposit facilities.
It was also left open to the RBI to issue suitable rules with respect to the responsibility owed by banks for any loss or damage to the contents of the lockers, so that the controversy on this issue is clarified as well and the Appeal is disposed of accordingly.
CONCLUSION: A customer for security of his /her valuables approaches the banks and ask for safe deposit lockers. It is duty of the banks same as bailee to provide security and safety to the valuables kept in safety lockers of their customers. A safe deposit locker holder is a consumer of services provided by the banks and any irregularity, mismanagement or mishandling of valuables in kept in lockers the bank will be considered as deficiency in service and bank is liable in this case. It is important to keep and honour faith of the customers in the banking system for strength and development of banking system in the country. The act of the bank to break safety locker of the customer was a gross negligence of its duties towards its customer and hence the judgment. The Apex Court also ask RBI to come with comprehensive guidelines and to formulate SOP for operation of Safety Lockers in Banks for that innocent and genuine customers should not be penalised.
DISCLAIMER: the above case law is only for information and knowledge of readers. In case of necessity do consult with concerned professionals.
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