Listen to this articleAMITABHA DASGUPTA
Versus
UNITED BANK OF INDIA & ORS.
Civil Appeal No. 3966 OF 2010, Decided On February 19,
2021
Judges: Mohan M. Shantanagoudar & Vineet Saran JJ.
Facts: The Appellant’s (‘AD’) mother (since deceased) took
a locker on rent the Respondent No. 1 (‘Bank/), AD was included as a joint
holder of the locker. On 27.05.1995, the AD visited the Bank to operate the
locker and deposit the locker rent. However, he was informed that the Bank had
broken open his locker on 22.09.1994 for non-payment of rent dues for the
period of 1993-1994.
Subsequently, AD filed a
consumer complaint before the District Consumer Forum (‘District Forum’)
calling upon the Bank to return the seven ornaments that were in the locker
since, he was returned only 2 ornaments by the bank, as the bank claimed there
were only 2 of those when the locker was broken; or alternatively pay Rs.
3,00,000/ towards the cost of jewellery, and compensation for damages suffered
by the AD. The District Forum allowed the complaint and held the Bank liable
for deficiency of service and was further, directed to return the entire
contents of the locker, or alternatively pay AD Rs. 3,00,000/ towards cost of
the jewellery and, Rs. 50,000/ as compensation for mental agony, harassment,
and cost of litigation.
On appeal filed by the
Bank, the State Commission (‘SC’) accepted the District Forum’s findings on the question of deficiency of
service, though it reduced the compensation from Rs. 50,000/ to Rs. 30,000/.
However, with respect to recovery of the cost of the ornaments, it observed
that the dispute on the contents of the locker can only be decided upon
provision of elaborate evidence and the Consumer Forum was not equipped to
undertake this evaluation since it only has jurisdiction to conduct a summary
trial.
The Revision Petition
against the order of the SC was dismissed and the National Commission (‘NC’) by
its judgment accepted the SC holding. The Supreme Court in appeal was in
agreement with the findings in the judgment of the NC to the extent that the AD
must file a separate suit before the competent civil court for seeking relief
with regard to the contents of the locker and for proving that the said items
were actually in the custody of the bank. Further, looking to the facts and
circumstances of the case, the Supreme Court deemed it appropriate to impose
costs of Rs. 5,00,000/on the Bank which was to be paid to the Appellant as
compensation.
ISSUE:
Whether the Bank owes a duty of care
to the locker holder under the laws of bailment or any other law with respect
to the contents of the locker? Whether the same can be effectively adjudicated
in the course of consumer dispute proceedings?
HELD:
The Supreme Court took note of the
dominant view of courts around the globe that the bank is in the position of a
bailee with respect to the goods placed inside the locker by the locker holder
and observed that, before applying the laws of bailment, the court must first
find on the facts of the case whether the plaintiff had transferred possession
of the articles to the bank.
Further, the Court observed that that
three components need to be fulfilled for the existence of bailment. These are:
(i) delivery of goods from one person to another by transfer of possession,
actual or constructive; (ii) an express or implied contract for delivery; (iii)
delivery should be for accomplishment of a purpose. However, the Court took
note of the fact that there is no substantive domestic legislation or sector
specific regulation which may throw light upon the issue of whether banks are
responsible under the laws of bailment for the loss of articles placed inside
the locker.
Therefore, in conclusion with regard
to is issue at hand the Supreme Court observed that, it requires factual findings
on whether the bank had knowledge of the contents of the locker; or whether the
locker holder had prepared any receipt or inventory of the articles placed
inside the locker or was otherwise able to prove the particulars of the items
deposited in the locker. And thus, opined that these questions cannot be
adjudicated upon in the course of proceedings before the consumer fora. This
aspect must be evaluated by the civil court, upon appreciation of evidence led
by the parties
ISSUE:
Whether the Bank owes an independent
duty of care to its customers with respect to diligent management and operation
of the locker, separate from its contents? Whether compensation can be awarded
for noncompliance with such duty?
HELD:
Banks act as service providers under the earlier
Consumer Protection Act, 1986, as well as the newly enacted Consumer Protection
Act, 2019, and thus, owe a separate duty of care to exercise due diligence in
maintaining and operating their locker or safety deposit systems. Which also
includes ensuring the proper functioning of the locker system, guarding against
unauthorized access to the lockers and providing appropriate safeguards against
theft and robbery. This duty of care is to be exercised irrespective of the
application of the laws of bailment or any other legal liability regime to the
contents of the locker. The banks as custodians of public property cannot leave
the customers in the lurch merely by claiming ignorance of the contents of the
lockers.
The Supreme Court observed that the present state of
regulations on the subject of locker management is inadequate and muddled.
Hence, the Court found it imperative that the Court lays down certain
principles which will ensure that the banks follow due diligence in operating
their locker facilities, and issued certain guidelines in this regard.
Further, the Court held that irrespective of the
value of the articles placed inside the locker, the bank is under a separate
obligation to ensure that proper procedures are followed while allotting and
operating the lockers, and, the banks cannot wash
off their hands and claim that they bear no liability towards their customers
for the operation of the locker. The very purpose for which the customer avails
of the locker hiring facility is so that they may rest assured that their
assets are being properly taken care of. Such actions of the banks would not
only violate the relevant provisions of the Consumer Protection Act, but also
damage investor confidence and harm our reputation as an emerging economy.
In conclusion the Supreme
Court, observed that it is necessary that 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, therefore, the
Court directed the RBI to issue suitable rules or regulations as aforesaid
within six months from the date of the judgment..