Excerpt
In the judgment passed by the Supreme Court on 19 February 2021, it was held that banks could not wash their hands off from the liability and they were duty-bound with the responsibility to operate and maintain bank lockers.
Facts of the case
In the present case, the Appellant was the joint owner of a locker in the Respondent bank along with her mother. In 1995, the Appellant went to the bank to operate and deposit the rent money of the locker. The Appellant was informed that his locker was broken open due to the non-payment of the locker rent of the term period 1993-94. Furthermore, it was also reallocated to some other person.
Later on, the Appellant sent a communication to the Respondent bank claiming that the locker was broken open illegally as they had already submitted the rent money of the locker for the term of 1993-94. Respondent no. 3 who was the chief manager of the Respondent bank accepted his claim and apologized for the mistake. On 17 June 1995, when the Appellant went to the bank to collect the things from the locker, he found only two jewellery out of seven. The bank claimed that these were the only contents in the locker which they found on breaking up the locker open.
The Appellant filed the suit before the District Consumer Forum and ordered the Respondent to return the jewellery of the Appellant or pay the amount of 3 Lakh along with the damages of Rs.50,000. This amount of damages was reduced to Rs.30,000 by the State Commission and later on, the revision was dismissed. This led to the present appeal in the Supreme Court.
Pleadings in the Court
The learned Counsel pleaded on behalf of the Appellant that even if the Hon’ble Court refers the case to the civil Court for adjudication on the issue of the contents of the locker, it would be doubtful that the same would be created because the contents of the locker were only known to the locker holder. After relying on Charan Singh vs. Healing Touch Hospital and Ors., it was contended that to bring the qualitative change in the attitude of the service provider, compensation needed to be awarded.
On the other hand, the learned Counsel on behalf of the Respondent contended that the interference was not warranted in the holdings of the National Commission. Also, it was further submitted that the Court could award compensation for the jewellery only after the trial court had appreciated the evidence.
Court’s Observation
The bench of the Supreme Court comprising Justice Mohan M. Shanthanagoudar and Vineet saran observed that banks could not wash their hands of any responsibility if any damage is caused to the lockers or safe deposits of their customers in an era where miscreants could exploit technology to gain access to electronically controlled bank lockers as they were the custodians of the bank lockers in the present case.
It was further observed by the Court that the consumers put their assets with the bank with the assurance that their assets would be properly taken care of through bank lockers. The banks were under the mistaken belief that they should be exempted from responsibility for failure to protect the lockers themselves by not knowing the locker’s contents.
It was further observed that it was very unlikely for the customers to know about the technology which was being used to control and operate the lockers. On the other hand, the risk existed that the technology used in these systems might be exploited by miscreants to gain access to the lockers without the knowledge or consent of the clients. Thus, for the safety of their money, the clients were absolutely at the mercy of the bank, the latter being the more resourceful party.
Court’s judgment
After observing that the banks “cannot impose unilateral and unfair terms on consumers”, the Court imposed a fine of Rs.5 Lakh on the Respondent bank, i.e., United bank of India for breaking open the locker of the Appellant without even informing him of the same. The Court further directed that the fine could be collected from the officers in mistake if they were still in the service. It also imposed a fine of Rs.1 Lakh on the Respondent bank to be paid to the Appellant as litigation costs.
The Court further directed the RBI to make “comprehensive directions mandating the steps to be taken by banks concerning locker facility/safe deposit facility management” in the time period of 6 months.
Case Name: Amitabha Dasgupta vs. United Bank of India [Civil Appeal No. 3966 of 2010]
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