2021 INSC 0086
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3966 OF 2010
Amitabha Dasgupta            ...Appellant 
Versus
United Bank of India & Ors.            …Respondents
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J. 
1. This  appeal,  by  special  leave,  arises  out  of  the   judgment  of
the   National   Consumer   Disputes   Redressal   Commission
(‘National   Commission’)   delivered   on   18.12.2008   dismissing   the
Revision   Petition   filed   against   the   judgment   of   the   State
Consumer   Disputes   Redressal   Commission   (‘State   Commission’)
dated 12.10.2004.
2. The following are the facts out of which this appeal arises:
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2.1  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   No.   1   Bank.   In   1970,   the
Appellant/Complainant   was   included   as   a   joint   holder   of   the
locker. On 27.05.1995, the Appellant visited the Respondent No.1
Bank to operate the locker and deposit the locker rent. 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   1993­1994.   Further,   that   the   locker   had   subsequently   been
reallocated to another customer.
2.2 On   29.05.1995   and   2.06.1995,   the   Appellant   sent
communications   to   Respondent   No.   1   claiming   that   such
breaking   of   his   locker   by   the   Bank   was   illegal   since   he   had
cleared   dues   for   1994­1995   on   30.07.1994,   i.e.,   prior   to   the
breaking of the locker. The Chief Manager of Respondent 1, who
is   Respondent   No.   3   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 apologized for the same. He stated as an ancillary point
that   reminders   for   the   payment   of   dues   had   been   sent   on
25.11.1993 and 23.02.1994. However, that these would have no
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meaning since the dues were subsequently paid by the Appellant
on 30.06.1994.
2.3 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.
However,   Respondent   No.1   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 No. 1 when the locker was broken open
in the presence of an independent witness.
2.4 Subsequently,   the   Appellant   filed   a   consumer   complaint
before   the   District   Consumer   Forum   (‘District   Forum’)   calling
upon Respondent No. 1 to return the seven ornaments that were
in the locker; or alternatively pay Rs. 3,00,000/­ towards the cost
of   jewelry,   and   compensation   for   damages   suffered   by   the
Appellant.
2.5 The   District   Forum   allowed   the   complaint   and   held
Respondent   No.   1   liable   for   deficiency   of   service,   relying   upon
Respondent   No.   3’s   admission   that   the   Bank   had   inadvertently
broken open the Appellant’s locker though there were no pending
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rent dues. Further, on the claim for the cost of seven ornaments,
it was held that Respondent No.1 could not prove that there had
been   only   two   ornaments   in   the   locker   since   there   were   no
independent   witnesses   in   the   presence   of   whom   the   locker   was
opened.   Hence,   Respondent   No.   1   was   directed   to   return   the
entire   contents   of   the   locker,   or   alternatively   pay   the   Appellant
Rs.   3,00,000/­   towards   cost   of   the   jewelry  and,  Rs.   50,000/­   as
compensation   for   mental   agony,   harassment,   and   cost   of
litigation.
2.6 On   appeal,   the   State   Commission   vide   order   dated
12.10.2004   accepted   the   District   Commission’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,   the   State
Commission,   relying   upon   the   judgment   of   the   National
Commission in   UCO Bank v. RG Srivastava , 1
  observed that the
dispute   on   the   contents   of   the   locker   can   only   be   decided   upon
provision   of   elaborate   evidence.   That   the   Consumer   Forum   was
not   equipped   to   undertake   this   evaluation   since   it   only   has
jurisdiction to conduct a summary trial. Therefore, the Appellants
1  1996 (1) CPR 97.
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were directed to  approach  the  civil  court for  adjudication  on  the
contents of the locker. 
2.7   The   Revision   Petition   against   the   order   of   the   State
Commission   was   dismissed   vide   the   impugned   order.   The
National   Commission   by   the   impugned   judgment,   accepted   the
State   Commission’s   holding   on   the   limited   jurisdiction   of   the
Consumer Forum to adjudicate on the recovery of the contents of
the locker.
  Hence, the present appeal. 
3.  Learned counsel for the Appellant submitted that even if the
case is remitted to the civil court for adjudication on the issue of
the   contents   of   the   locker,   it   would   be   highly   improbable   to
ascertain the same since the contents of a locker are exclusively
known only to the locker holder. On the question of damages, he
relied on   Charan Singh v. Healing Touch Hospital & Ors. 2
  to
argue that compensation must be awarded to bring a qualitative
change in the attitude of the service provider.
3.1  Per   contra,   learned   counsel   for   the   Respondents   submitted
that   the   National   Commission’s   holding   does   not   warrant
interference.   He   submitted   that   compensation   for   the   loss   of
2 (2000) 7 SCC 668. 
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jewellery   can   only   be   awarded   after   appreciation   of   evidence   by
the trial court. 
4. Heard Learned Counsel for both parties. Based on a perusal of
the   record,   the   following   issues   arise   for   consideration   in   the
present appeal:
4.1  First,  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?
4.2   Second,   irrespective   of   the   answer   to   the
previous   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?
I. Relief with Respect to the Contents of the Locker
5.  Disputes   between   banks   and   locker   holders,   pertaining   to
loss   of   articles   placed   inside   the   locker,   have   been   subject   to
judicial   consideration   in   various   jurisdictions   for   nearly   a
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century.   For   a   broader   understanding   of   the   subject,   we   find   it
necessary   to   briefly   refer   to   certain   judgments   of   foreign
jurisdictions, before clarifying the position under Indian law.
5.1 The dominant view of courts around the globe has been that
the   bank   is   in   the   position   of   a   bailee   with   respect   to   the   goods
placed   inside   the   locker   by   the   locker   holder.   In   Roberts   v.
Stuyvesant   Safe   Deposit   Co. , 3
  the   defendant   company
permitted   the   police   under   a   search   warrant,   to   confiscate   the
articles   that   were   inside   the   plaintiff’s   locker.   However,   the
articles were subsequently stolen from police custody. A suit was
filed   by   the   plaintiff,   alleging   that   the   defendant   company   failed
to   comply   with   the   duty   of   care   required   under   the   law   by
permitting   the   police   to   take   away   articles   that   were   not
mentioned   in   the   search   warrant.   Affirming   the   plaintiff’s
contentions, the Court of Appeals of New York made the following
observations   about   the   relationship   of   bailment   between   the
parties:
“The   legal   relationship   which   the   defendant   held   to
the   plaintiff,   and   out   of   which   this   controversy   has
arisen, was  that of a bailee or depositary for hire.  The
fundamental   question   in   the   case   is   whether   the
defendant,   upon   the   undisputed   evidence   in   the
record, discharged those duties and obligations to the
3 (1890)  123 N.Y 57. 
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plaintiff   which   the   law   imposed   upon   it   in   regard   to
the care and custody of her property.”
(emphasis supplied)
It  is  pertinent   to  note  the  Court’s observation   that  whether
or   not   the   defendant   had   discharged   its   obligations   as   a   bailee
would have to be discerned from the undisputed evidence on the
record. 
5.2 The position of law stated in   Stuvyesant Safe Deposit Co.
(supra) has been reiterated in subsequent precedents which have
governed   the   law   on   the   field   such   as   Emma   M.   Lockwood   v.
The   Manhattan   Storage   &   Warehouse   Company , 4
  Mayer   v.
Brensigner , 5
  National  Safe Deposit  Co.  v.  Stead . 6
    In   Cussen
v. Southern Cal. Savings Bank , 7
  money kept by the plaintiff in
the   bank’s   safe   deposit   vault   was   lost.   The   Supreme   Court   of
California   held   that   the   bank   was   liable   under   the   laws   of
bailment.   However,   it   observed   that   the   plaintiff   would   have   to
make a  prima facie  case that they had deposited the money inside
the locker, and that it was subsequently lost. The burden of proof
would then shift to the defendant bank to prove that it exercised
4  50 N.Y.S 974 (N.Y. 1898). 
5  54 N.E 159 (1899).
6  95 N.E. 973 (1911). 
7  65 P. 1099 (1901). 
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the   necessary   care   required   under   the   laws   of   bailment   for   the
protection   of   its   contents.   Therefore,   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.
6.   To   identify   if   the   relationship   of   bailment   exists   between   the
bank   and   the   locker   holder   under   Indian   law,   it   is   necessary   at
the   outset   to   refer   to   the   relevant   provisions   under   the   Indian
Contract Act, 1872 (‘Contract Act’):
“ 148.   ‘Bailment’,   ‘bailor’   and   ‘bailee’   defined. —A
‘bailment’   is   the   delivery   of   goods   by   one   person   to
another for  some purpose, upon a contract that they
shall, when the purpose is accomplished, be returned
or otherwise disposed of according to the directions of
the person delivering them. The person delivering the
goods is called the ‘bailor’. The  person to  whom  they
are delivered is called the ‘bailee’.
149. Delivery  to bailee how  made.— The delivery to
the bailee may be made by doing anything which has
the effect of putting the goods in the possession of the
intended   bailee   or   of   any   person   authorised   to   hold
them on his behalf.” 
Thus, from the aforementioned provisions, it can be inferred
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
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express or implied contract for delivery; (iii) delivery should be for
accomplishment of a purpose. 
7. Unfortunately,   there   is   no   substantive   domestic   legislation
or   sector­specific   regulations   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.   On
4.12.2006,   the   Reserve   Bank   of   India   (‘RBI’)   had   issued   a   Draft
Circular   on  Safe­Deposit Lockers (‘2006  Circular’). 8
  This circular
was only in the form of a proposal issued to the banks and hence
does   not   have   any   binding   value.   However,   it   is   useful   in
understanding the RBI’s position at that stage. Clause 2.1 of the
2006 Circular states:
“2. Security aspects relating to Safe Deposit Lockers:
2.1   It   is   clarified   that   the   relationship   between   the
bank and the locker hirer is in the nature of a 'bailor
and   bailee'   and   not   'landlord   and   tenant'   though   the
bank   has  no   knowledge of   the  contents  of  the  locker
and   the   bank   is   required   to   exercise   due   care   and
necessary precaution for the protection of the lockers
provided to the customer.” 
(emphasis supplied)
On   perusal   of   the   2006   Circular,   it   is   evident   that   at   that
point in time , the RBI had recommended that the laws of bailment
ought to guide the relationship between the bank and the locker
8 https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=3196. 
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holder, even if the bank has no knowledge of the contents of the
locker. 
7.1 The   RBI   had   also   issued   guidelines   covering   inter   alia ,   the
subject   of   safe   custody   of   articles   placed   inside   the   lockers
(Circular   No.   RBI/2006­2007/325)   on   17.04.2007   (‘2007
Circular). 9
  There   was   no   clause   on   the   nature   of   the   legal
relationship between the bank and the locker holder in the 2007
Circular. The only reference to the Contract Act was as follows:
“3 .5   Banks   are   advised   to   be   guided   also   by   the
provisions of Sections 45 ZC to 45 ZF of the Banking
Regulation   Act,   1949   and   the   Banking   Companies
(Nomination) Rules, 1985 and   the relevant provisions
of Indian Contract Act  and Indian Succession Act.”
(emphasis supplied)
However,  this  observation  was  made in   the  specific  context
of return of safe custody of articles to the survivors/legal heirs of
deceased   locker   holders   and   hence   may   not   have   much   bearing
in the present case. 
7.2 Subsequently,   in   response   to   a   Right   to   Information   (‘RTI’)
enquiry made in 2017, the RBI, and various public sector banks,
stated that as per the agreement entered into with the customers
who are hiring/leasing the lockers, the banks have no liability for
loss or damage of articles placed inside the bank lockers. Hence
the position of the RBI from 2006 to 2017 has undergone a sea­
9  https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=3422.
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change. The position adopted by the banks was challenged before
the   Competition   Commission   of   India   (‘CCI’)   as   being   in   the
nature   of   an   anti­competitive   practice.   The   CCI   dismissed   the
claim, while making the following observations: 10
“7.   In   the   instant   case,   there   is   no   such   material   to
suggest   any   understanding/consensus/arrangement
amongst the Opposite Parties to have pursued any of
the   aforesaid   prohibited   activities.   Suspicion   of   a
cartel   has   been   raised   in   the   information   as   all   the
Opposite   Parties   allegedly   do   not   take   responsibility
for   any   loss   of   valuables   kept   by   customers   availing
safety deposit locker facility from them.   However, the
RTI   replies   of   some   of   the   Opposite   Parties   suggest
that   they   are   not   completely   absolved   for   loss   of
valuables kept in their locker . For instance, the reply
dated 7th October, 2015 of Bank of Baroda inter alia
states  that  in   case  of   loss  suffered  by   the   lessee  due
to   theft   or   burglary   etc.   of   safe   custody   locker,   the
liability   of   the   bank   will   depend   upon   the   facts   and
circumstances surrounding the burglary. Further, the
reply  dated   13th   October,   2015   of   Dena   Bank   states
that   the   responsibility   of   the   bank   shall   be   governed
by   the   terms   and   conditions   laid   down   in   the
memorandum   of   hiring   of   locker   and   the   guidelines
issued   by   RBI   from   time   to   time.   Reply   dated   19th
October,   2015   of   Andhra   Bank   states   that   the
relationship   between   the   bank   and   its   customer,   in
case   of   safe   deposit   locker,   is   that   of   ‘lessor   and
lessee’ and the particulars of the articles kept in safe
deposit locker will not be disclosed by the customer to
the   bank   and   hence,   the   bank   cannot   take
responsibility for compensating any loss as the extent
of   such   loss   cannot   be   assessed.   It   has   been   further
stated   that   the   bank,   however,   takes   all   necessary
measures   and   precautions   to   safeguard   the   lockers
provided  to  the  customers. Similarly, the   reply  dated
30th   October,   2015   of   Corporation   Bank   states   that
10  Kush Kalra v. Reserve Bank of India, 2017 SCC OnLine CCI 41. 
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its   liability   in   case   of   theft/loss   of   valuables   kept   in
its   safety   lockers   depends   upon   the   parameters   on
which   the   bank   takes   insurance   on   the   lockers   and
the same parameters will be adopted while settlement
of   claims   in   case   of   theft.   Taking   into   consideration
all   these   replies   and   in   the   absence   of   any   material
suggesting collusion amongst the Opposite Parties,   it
cannot be said that a uniform practice is followed by
all   the   Opposite   Parties   to   avoid
responsibility/liability   for   loss   of   valuables   kept   by
customers availing their safety deposit locker facility .”
 (emphasis supplied)
Therefore, the CCI took notice of the fact that it is common
industry practice for banks to disclaim liability for loss of articles
placed inside the locker, though there are no uniform parameters
or policies guiding the same. Additionally, the banks have stated
that acceptance of responsibility for loss of articles placed in their
locker   facility   will   depend   upon   the   relevant   facts   and
circumstances   of   each   case,   such   as   the   terms   of   the   locker
hiring   agreement,   the   circumstances   under   which   the   articles
were lost or stolen, and so on. 
8. There   has   also   not   been   any   authoritative   pronouncement
from this Court on the issue of whether banks are responsible as
bailees,   or   in   any   other   capacity,   for   any   loss   or   damage   to   the
contents   of   the   lockers.   However,   there   have   been   various   High
Court   judgments   guiding   the   field.   One   of   the   notable   cases   in
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which this issue arose was  Jagdish Chandra Trikha v. Punjab
National   Bank . 11
  In   this   case,   the   appellants   had,   before   the
partition of India, entrusted a sealed box of gold ornaments to the
respondent   bank   in   Peshawar   on   the   payment   of   a   fee   for
safekeeping. The box was moved to the Rawalpindi branch, then
subsequently   to   the   Lahore   branch,   and   finally   to   India   in
November   1961   under   the   Indo­Pakistan   Movable   Property
Agreement.   Upon   presentation   of   the   box,   the   Appellant   refused
to take delivery  since the appearance and weight of the box was
different from what it had been when it was deposited. A suit was
filed seeking delivery of the ornaments or alternatively recovery of
the   market   value   of   the   ornaments.   Referring   to   the   relevant
common law authorities, the Delhi High Court held that the bank
would   be   liable   in   the   capacity   of   a   bailee   for   the   loss   of   the
ornaments: 
“71. The Box was entrusted to the defendant Bank at
Peshawar.   The   same   was   accepted   by   the   Bank   as   a
bailee   and it was expected that the usual care which
is   demanded   on   such   matters   would   be
undertaken...it   is   established   that   the   defendant
Bank failed to discharge its duties as a bailee and did
not   take   care   of   the   goods   of   the   parents   of   the
plaintiff   as   one   would   under   similar   circumstances,
take of his own goods of the same bulk, quantity and
value as the goods bailed.” 
11  AIR 1998 Delhi 266. 
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 (emphasis supplied) 
It   is   important   to   note   that   in   the   facts   of   Jagdish
Chandra   Trikha   (supra),   the   High   Court   found   that   there   was
complete   entrustment   of   possession   of   the   appellant’s
ornaments .   The   articles   to   be   safeguarded   were   handed   over   by
the customer to the bank in a sealed box, which was then taken
to a safe place to be stored. Though the respondent bank claimed
it  did  not  have  any  knowledge of  the  contents of  the  box, it  was
proved   from   evidence   that   the   appellant’s   predecessors   had
handed   over   a   detailed   list   of   the   jewellery   which   was   placed
inside the safe deposit box to the bank. It was further proved that
the   customer   did   not   have   any   access   to   the   same   after
entrustment to the bank. Hence the High Court considered it a fit
case to apply the laws of bailment. 
8.1 However,   the   locker   service   provided   by   the   banks   has
evolved since the pre­independence days. In that era, the bank’s
employee was entrusted with the relevant goods for safe keeping.
Complete access to the valuables, if any, remained with the bank
till   the   time   the   customer   claimed   return   of   the   same.   However,
due   to   modernization   of   the   locker   system,   banks   now   provide
customers   with   partial   access   to   the   lockers.   Under   the   current
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system,   the   bank   allocates   a   locker   to   the   customer   on   the
payment of rent. The customer is then provided with a key to the
locker   through   which   he   can   gain   partial   access   to   the   locker.
The   bank   has   a   master   key   to   the   locker   and   the   customer   can
gain   complete   access   to   the   locker   only   when   the   bank   uses   its
own key to the locker. Therefore, a combination of the bank’s key
and   the   locker   holder’s   key   is   required   for   opening   a   locker,
providing   neither   with   complete   access.   In   more   advanced,
digitally operated locker systems, such ‘keys’ may not be physical
keys   but   may   consist   of   passwords   or   data   which   is   exclusively
known to the bank and the customer. Further, the bank may not
have   any   receipt   of   the   exact   particulars   of   the   articles   placed
inside  the  locker, as  was  the   case  in   Jagdish  Chandra   Trikha
(supra).   The   question   that   therefore   arises   for   consideration
before this Court is whether the modern­day bank locker system
would be guided by the laws of bailment.
8.2 An important decision which has considered the modern­day
bank   locker   system   is   that   in   Natioal   Bank   of   Lahore   Ltd.   v.
Sohan   Lal   Saigal . 12
  In   that   case,   the   appellant   bank   had
provided   locker   service   for   the   safe   custody   of   valuables.   The
12 AIR 1962 P H 534.
16

locker   could   be   operated   jointly   by   the   locker   holder   and   the
bank’s   custodian.   However,   the   respondent   locker   holder   was
able  to  prove  before  the   Civil  Court   that   the   Manager/custodian
of   the   bank   had   tampered   with   the   locker   such   that   it   could   be
operated even without the locker holder’s personal key. Hence the
Civil   Court   concluded   that   the   Manager   had   exclusive   control
over   the   lockers.   Consequently,   referring   to   the   decisions   of   the
Court   of   Appeals   of   Ohio   in   Blair   v.   Riley 13
  and   the   Supreme
Court   of   Illinois   in   National   Safe   Deposit   Company   v.   Stead,
Attorney   General , 14
  the   Punjab   and   Haryana   High   Court   held
that   the   bailor­bailee   relationship   applied.   In   this   regard,   the
High Court observed that:(Pg. 578)
“It may be that the person who hires a locker retains
some   control   over   it   by   having   one   key   with   himself
but if the locker can be operated without any key, as
was possible in the lockers which were rented out to
the   plaintiffs ,   then   at   once   any   impediment   in   the
way   of   control   and   possession   of   the   Bank   to   whom
the locker belonged and in whose strong room it was
to   be   found,   would   be   removed   and   it   could   well   be
said  that   the   bank   was  strictly   in  the   position  of   the
bailee.”
 (emphasis supplied)
The High Court further observed that the locker holders had
produced   specific   evidence   in   the   form   of   lists   of   the   articles   of
13 175 N.E.R 210.
14 95 N.E.R. 973.
17

jewellery deposited inside the lockers so as to prove the extent of
loss they had suffered. 
8.3 In   Mohinder   Singh   Nanda   v.   Bank   of   Maharashtra , 15
forty­four   safe   keeping   lockers   in   the   Respondent   bank   were
broken   open   by   miscreants   and   the   contents   were   emptied.   The
Punjab   &   Haryana   High   Court   held   that   the   bank   would   not   be
liable   for   the   loss   of   articles,   if   any,   since   the   bank   had   no
knowledge of the contents of the locker:
“4.   But   there   is   no   evidence   on   record   to   show   that
the defendant­Bank  had the knowledge of the articles
in   the   locker.   Unless   there   is   entrustment   of   the
property   to  the  defendant Bank,  the Bank  cannot be
held   responsible   for   the   theft.   The   plaintiffs   have
miserably  failed  to  prove  that  there  was  entrustment
of  the   articles  with   the   defendant  Bank   and  that   the
Bank authorities were aware of the articles placed in
the locker.” 
(emphasis supplied)
8.4 Subsequently,   the   Punjab   and   Haryana   High   Court   again
undertook   a   comprehensive   look   into   the   present­day   locker
system   in   Atul   Mehra   v.   Bank   of   Maharashtra , 16
  which
pertained   to   the   same   bundle   of   facts   as   in   Mohinder   Singh
Nanda   (supra). The appellant  locker  holders filed a suit alleging
that due to the robbery, jewels worth Rs. 4,26,160/­ were stolen
from his locker. It was claimed that the respondent bank had not
15 1998 ISJ (Banking) 673. 
16 AIR 2003 P&H 11. 
18

complied with the duty of care owed under the laws of bailment.
However,   the   trial   court   found   that   the   knowledge   of   the   weight
and value of the articles stored inside the locker was exclusive to
the   customer,   and   the   bank   did   not   have   notice   of   the   same.
Further,   the   appellants   had   not   produced   any   evidence   at   the
stage   of   trial   to   establish   the   contents   of   the   locker.
Consequently, the Single Judge Bench of Nijjar J. opined that the
provisions with respect to bailment under the Contract Act would
not apply as follows:
“17…The   respondent   bank   could   only   be   fastened
with   liability   on   the   contents   of   the   locker   being
disclosed   to   it.   In   the   absence   of   this   information,   it
would have to be held that there was no entrustment
of the goods to constitute bailment as required under
Section 148 of the Indian Contract Act, 1872. 
18…These   authorities   are   of   no   assistance   to   the
appellants   in   the   present   case.   In   all   these   cases,
exclusive possession of the property had been handed
over by the bailor to the bailee. I am of the considered
opinion   that   exclusive   possession   is   a   sine   qua   non
for   bailment.   Therefore,   I   have   no   hesitation   in
coming   to   the   conclusion   that   mere   hiring   of   the
locker would not be sufficient to constitute a contract
of   bailment   as   provided   under   Section   148   of   the
Indian   Contract   Act,   1872.   In   order   to   constitute
bailment,  as  provided  in   Section  148  of  the  Act,  it  is
further   necessary   to   show   that   the   actual   exclusive
possession   of   the   property   was   given   by   the   hirer   of
the   locker   to   the   bank.   It   is   only   thereafter   that   the
question of reasonable care and quantum of damages
would   arise.   In   the   present   case,   it   is   impossible   to
19

know the quantity, quality or the value of the jewelry
which   was   allegedly   kept   in   the   locker   at   the   time
when   the   robbery   occurred .   ………   In   the   present
case,   the   plaintiffs   alone   had   the   knowledge   of
contents   of   lockers,   therefore,   the   plaintiffs   had   to
lead   independent   evidence   to   prove   that   jewelry   was
actually in the locker on the date of the robbery.  Even
if   the   plaintiffs   had   proved   this   peculiar   fact;   they
would still have to prove the value of the jewelry.”
 (emphasis supplied.)
Therefore,   the   High   Court   concluded   that   mere   leasing   out
of   the   locker   ipso   facto   would   not   establish   a   relationship   of
bailment   between   the   bank   and   the   locker   holder.   In   order   to
establish exclusive possession, the claimant must prove that the
bank   had   knowledge   of   the   contents   of   the   locker .   Alternatively,
where   the   locker   holder   alone   has   knowledge   of   the   contents,
they  must  lead independent   evidence  to  prove  that  their  articles
or valuables were actually inside the locker, and the valuation of
the same. 
8.5 However,   Nijjar   J.   differentiated   the   holding   in   Sohan   Lal
Saigal  (supra) by observing as follows:
20. “In that case,  the learned trial court had held that
entrustment   and   the   valuation   of   jewelry   had   been
proved….. On   the   twin   grounds   of   exclusive
possession of the jewelry deposited in the locker and
entrustment   thereof   to   the   Bank,   it   has   been   held
that the Bank would be in the position of bailee.”
(emphasis supplied) 
20

Therefore,   in   Sohan   Lal   Saigal   (supra)   entrustment   of
jewelry was proved on production of elaborate evidence before the
trial   court.   However,   in   Mohinder   Singh   Nanda   (supra)   and
Atul Mehra  (supra) no evidence was led to prove the entrustment
of   jewelry   to   the   bank,   and   hence   the   claimant   locker   holders
were   unable   to   succeed   in   obtaining   relief.   Nijjar   J.   further
observed that:
“22…Whatever   property   is   deposited   in   the   locker   is,
undoubtedly   in   the   custody   and   possession   of   the
bank. Merely because the locker can be operated only
in the presence of the locker hirer would not amount
to   joint   possession   of   the   locker.   The   Banker   can
always open the locker with a “master key”. The hirer
of   the   locker   is   not   in   a   position   to   open   the   locker
without   the   assistance   of   the   bank.   The   hirer   has
access   to   the   locker   only   during   specified   banking
hours.   The   banker   has   no   such   limitation.   It   must,
however,   be   noticed   that   the   transaction   of   bailment
would only be established if the provisions of Section
148   of   the   Indian   Contract   Act   are   complied   with.
With regard to this, it is the submission of Mr. Jagga
that the plaintiffs have miserably  failed to prove that
the jewellery was kept in the locker as claimed in the
plaint.   There   being   no   entrustment   or   delivery   of
possession, Section 148 of the Act cannot be invoked
by the plaintiffs.”
Therefore, the Court in   Atul Mehra   was sympathetic to the
fact that the principles of bailment may be applicable even to the
contemporary   dual­key   locker   system   if   the   bank   is   in   the
21

possession of a master key or has substantial degree of access to
the   locker.   However,   the   plaintiff   would   first   have   to   prove   that
they   had   indeed   handed   over   possession   of   certain   articles   for
being   deposited   in   the   locker   of   the   bank.   If   this   requirement   is
not   satisfied,   the   Court   is   barred   from   going   into   other   issues
such   as   whether   the   locker   holder   and   the   bank   were   in   joint
possession, etc. 
8.6 Having perused the aforementioned precedents, we find that
what   was   commonly   contested   in   all   these   cases   is   whether
delivery of possession or entrustment of valuables from the locker
holder   to   the   bank   had   taken   place,   for   the   purpose   of   Section
148 of  the Contract Act. Even  in the relevant foreign precedents
which we have noted, the application of the principles of bailment
was   contingent   on   determining   whether   possession   was
transferred in the facts of the case. This in turn 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. We are of the considered opinion that these questions
cannot   be   adjudicated   upon   in   the   course   of   proceedings   before
22

the   consumer   fora.   This   aspect   must   be   evaluated   by   the   civil
court,   upon   appreciation   of   evidence   led   by   the   parties,   as   was
done   in   all   the   aforementioned   decisions   of   Jagdish   Chandra
Trikha   (supra),   Sohan   Lal   Saigal   (supra),   Mohinder   Singh
Nanda  (supra) and  Atul Mehra  (supra). 
8.7 It   is   true   that   the   National   Commission   has,   in   previous
decisions   such   as   Punjab   National   Bank,   Bombay   v.   K.B.
Shetty , 17
  and   Mahender   Singh   Siwach   v.   Punjab   and   Sind
Bank , 18
  awarded the value of articles which have been stolen  or
gone   missing   from   bank   lockers.   Moreover,   in   Pune   Zilla
Madyawarti   Sahakari   Bank   Limited   v.   Ashok   Bayaji
Ghogare , 19
  the   National   Commission   has   gone   to   the   extent   of
holding that the affidavit of the locker holder should ordinarily be
accepted for  proving   the  contents  of  the  bank  locker, unless  the
same stands impeached by way of cross examination. However, it
is relevant to note that in the facts of the aforementioned cases,
the   complainants   had   produced   detailed   and   precise
documentary   proof   for   corroborating   the   extent   of   jewellery
17  1991 (1) C.P.C. 592. 
18 (2006) 4 CPJ 231 (NC).
19  2015 SCC OnLine NCDRC 2832.
23

placed inside the locker, which has not been done in the present
case.
8.8 In   UCO   Bank   (supra),   similar   situation   arose   as   in   the
present case, wherein the respondent locker  holder claimed that
his   locker   was   tampered   with   and   broken   open,   and   valuables
were   subsequently   lost,   due   to   the   negligence   of   the   bank.   The
bank   not   only   disputed   the   value   of   jewellery   kept   inside   the
locker, but also denied any negligence in the breaking open of the
locker.   The   locker   holder   had   only   produced   an   affidavit   in
respect   of   the   value   of   the   jewellery   claimed   by   him.   Hence   the
National   Commission   held   that   it   is   appropriate   that   both   these
issues   should   be   remitted   for   determination   in   a   civil   suit   in   a
competent   civil   court,   after   adducing   of   elaborate   evidence   on
both sides.
8.9 In   the   recent   case   of   Mamta   Chaudaha   v.   Branch
Manager/Head   Manager,   State   Bank   of   India , 20
  the   National
Commission again observed that the appellant locker holders had
not   produced   any   evidence   apart   from   a   standard   affidavit   to
prove   that   they   had   kept   a   specified   quantity   of   gold   ornaments
inside the bank locker. Further, there was no evidence of forcible
20  (2020) 1 CPJ 276 (NC). 
24

entry   to  the  locker.  Hence  the   complaint   for  recovery   of  value  of
the ornaments was dismissed.
8.10 In   light   of   the   aforementioned   conflicting   decisions   of   the
National  Commission, we  find that the  approach  adopted by  the
National   Commission   in   the   impugned   judgment   is   the   correct
approach.   In   the   present   case,   the   Respondent   bank   has   not
disputed  their  negligence  in  breaking  open  the   locker  in  spite  of
clearance   of   rental   dues  by   the   Appellant.   However,   the   number
of items originally deposited by the Appellant inside the locker is
a   contested   fact.   Hence,   we   do   not   propose   to   record   any
conclusions   on   whether   the   Appellant   locker   holder   in   the
present case is entitled to claim return or recovery of the value of
the ornaments alleged to have been deposited by him. We are in
agreement   with   the   findings   in   the   impugned   judgment   to   the
extent   that   the   Appellant   must   file   a   separate   suit   before   the
competent   civil   court   for   seeking   this   relief   and   for   proving   that
the aforesaid items were actually in the custody of the bank. This
is especially inasmuch as the contents of the locker are disputed
by the Respondent bank. Hence it is clarified that all questions of
fact   and  law   are  left  open   before   the  civil  court   to   decide  on  the
25

merits of the case, including as to whether the law of bailment is
applicable, or any other law as the case may be. 
II.   Separate   Duty   of   Care   of   the   Bank   with   regard   to   Locker
Management
9.  As   discussed   supra,   imposition   of   liability   upon   the   bank
with   respect   to   the   contents   of   the   locker   is   dependent   upon
provision   and   appreciation   of   evidence   in   a   civil   suit   for   such
purpose.  However,   this   does   not   mean  that   the  Appellant   in   the
present   case   is   left   without   any   remedy.   Banks   as   service
providers   under   the   earlier   Consumer   Protection   Act,   1986,   as
well as the newly enacted Consumer Protection Act, 2019, owe a
separate duty of care to exercise due diligence in maintaining and
operating   their   locker   or   safety   deposit   systems.   This   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. 
9.1 In this regard, we may refer to the observations made by the
26

National   Commission   in   the   decisions   discussed   in   Part   I   of   our
opinion.   In   Punjab   National   Bank   (supra),   in   addition   to
directing   return   of   the   cost   of   the   ornaments   lost,   the   National
Commission   also   made   a   separate   finding   on   the   negligence   of
the bank in maintaining the security and safety of the locker:
“4.   The   last   and   the   most   important   question   is
whether   the   appellant   Bank   has   been   guilty   of
negligence   in   ensuring   the   security   and   safety   of   the
locker.   The   State   Commission   has   taken   adverse
notice   of   the   fact   that   the   appellant   Bank   did   not
probe   departmentally   when   the   locker   had   been
found   open   on   the   9th   June,   1988and   treated   the
matter   as   closed   so   far   as   the   Bank   is   concerned.   It
was content with lodging a report with the police. It is
a matter of common knowledge, the Master Key of the
locker   is   with   the   Bank;   the   locker   can   be   opened
only with the Master Key and the Key with the locker
holder.   The   mechanism   is,   however,   such   that   the
locker  must get closed, if the locker holder takes out
his/her   key.   Further,   a   certificate   is   recorded   by   the
custodian   of   the   Bank   that   all   the   lockers   operated
during   a   day   have   been   checked   and   found   properly
locked .   Such   a   certificate   was   also   recorded   on   the
21 st
April,   1988.   The   State   Commission,   therefore,
come to  the conclusion that the Bank was negligent,
in  ensuring   the security   of the  locker  with  the  result
that it was found on the 9th June, 1988 to have been
opened unauthorized. For  this the State Commission
has   held   that   the   Bank   is   squarely   responsible   and
therefore liable to make good the loss suffered by the
respondent   complainant.   This   Commission   fully
concurs with the findings of the State Commission.”
 (emphasis supplied)
Accordingly, the  bank  was ordered to  pay  separate  costs of
Rs 3,500/­ by way of compensation to the locker holder.
27

9.2   In   Mahendar   Singh   Siwach   (supra)   the   bank   negligently
allowed a third party, who was the previous allottee of the locker,
to break open the appellant’s locker and take away the valuables
therein. It was found that the bank had failed to duly record and
complete   the   required   formalities   with   respect   to   change   of
allotment   from   the   third   party   to   the   current   allottee,   i.e.,   the
appellant.   The   National   Commission   arraigned   the   gross
deficiency in service committed by the bank as follows:
“ …We   find   that   the   record   itself   proves   gross
negligence and deficiency in service on the part of the
opposite   party   Bank   in   rendering   service.   Firstly,
O.P.'s   argument   is   that   fraud   committed   by   Mr.
Ramendra   Singh   Grover,   the   third   party   in   removing
the   contents   of   the   locker   comes   under   criminal
jurisdiction, has no relevance as regards enforcement
of civil liability against the opposite party Bank under
Consumer   Protection   Act.   There   is   no   other   valid
argument   given   on   behalf   of   the   bank   except   to
contend   that   they   did   not   know   the   details   of   the
contents of the locker and hence the Bank cannot be
made liable. The Bank officials admitted their mistake
and stated that they are liable to compensate for the
same.   It   is   also   interesting   to   see   the   evidence
produced  on   record,  i.e.   an   extract  from   the   order   of
the Learned Sessions Judge, Meerut dated 22.4.1996
granting   bail   to   Mr.   Grover   which   is   reproduced
hereunder:
“It appears that the alleged crime could not have been
committed   without   the   connivance   of   the   bank
authorities. If the locker in question was allotted to the
applicant in the year 1978, it is not clear how it could
be   allotted   to   Mahendra   Singh   Siwach   in   the   year
28

1979.   Further,   when   Mahendra   Singh   Siwach   has
been operating the locker for all these years having his
account   No.   284   it   is   not   understandable   how   the
Bank   could   without   verifying   from   record,   accept   the
request of the applicant that the locker be broken open
as   the   key   had   been   lost.   It   was   necessary   for   the
bank   authorities   to   have   referred   to   the   bank   record
and   should   have   also   intimated   Mahendra   Singh
Siwach   about   this   request   of   the   applicant.   Not   only
this,   the   bank   authorities   in   the
circumstances   mentioned   above   should
have   prepared   an   inventory   of   the   articles   and
should   have   got  them  valued  before handing  over
the   same   to   the   applicant .   It   does   not   appear   that
the police has taken any action against the concerned
delinquent bank official. The applicant­accused claims
that   he   was   the   owner   of   the   property   kept   in   the
locker   and   the   locker   belonged   to   him.   In   these
circumstances, when no action has been taken against
the   bank   authorities,   I   think   it   proper   to   release   the
applicant also on bail.
xxx
It   is   very   strange   that   the   opposite   party   has   not
referred   to   the   duties   cast   on   them   under   their   own
instruction   manual  which   is  on  the  guidelines  of  the
Reserve   Bank   of   India   to   support   their   case.   Similar
Manual   of   Instructions   of   United   Commercial   Bank
on the guidelines of Reserve Bank of India filed by the
Complainant is reproduced hereunder:
“Maintenance of Record
6.1 Locker Register (Form G ­126)
This   Register   should   be   maintained   lockerwise   in
serial order so as to facilitate locating the details of the
hirer   from   the   locker   number.   All   the   details   such   as
the   name(s),   their   addresses,  operational   instructions,
rent paid, etc., should be recorded. The name(s) of the
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hirer(s) should be indexed in the Register according to
alphabetical order .
6.4 Locker Key Register
The   branch   should   also   maintain   a   Locker   Key
Register.   This   should   be   maintained   keywise   to
lockerwise   and   lockerwise   to   keywise   so   as   to
facilitate   tracing   the   number   of   Locker   from   the   Key
number and tracing the number of Key from the Locker
number.   Moreover,   when   the   locks   of   the   lockers   are
interchanged,   such   changes   should   be   immediately
recorded   in   the   Locker   Key   Register.   It   should   be
marked   ‘Strictly   Private’   and   should   be   kept   in
personal   custody   of   Custodian   of   locker   cabinets.   A
suggested proforma of Locker Key Register is  given in
Annexure 1 .
6.5   Daily   Register   of   Access   to   Hired   Lockers   (G­
125)
Signature of the operator on Locker should be obtained
in this Register. Date and time of operation should also
be recorded therein .
6.6   Branch should also maintain a pass book to keep
a record of total number of Lockers hired and number
of Lockers surrendered so that it is possible to find out
at a particular time the number of Lockers let out and
number of Lockers lying vacant .
At the time of half yearly closing, the stock of keys on
hand   should   be   verified   in   reference   to   Lockers   lying
vacant .
12.3.1   Breaking   Open   of   Locker   Due   to   Loss   of
Key
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When intimation has been received from hirer(s) about
loss of key, the following procedure should be adopted
for breaking open the Locker :—
(a)   An   application   should   be   obtained   from   hirer(s)
requesting for breaking open the Locker .
(b) The charges for breaking open the Locker should be
realized from the hirer in advance and kept in Sundry
Creditors Account .
(c) An appointment should be made with the agents of
the   makers   of   lockers   cabinet,   to   send   their   mechanic
to drill open the Locker in consultation with the hirer(s) .
Locker   should   be   broken   open   in   the   presence   of   the
hirer(s), the Manager, Accountant and Custodian of the
locker cabinet, and one respectable witness. A suitable
remark about breaking open of Locker should be made
in   Locker   Register,   Renewal   Diary   and   Specimen
Signature Card .
xxx
The procedure laid down by the Reserve Bank of India
guidelines   has   been   completely   flouted   by   the
opposite party by not maintaining the locker register,
locker   key   register,   non­payment   of   rent   dues   and
lastly   the   procedure   that   should   be   adopted   for
breaking open a locker etc .”
 (emphasis supplied)
9.3 In   Mamata   Chaudaha   (supra),   though   the   National
Commission dismissed the complaint on the facts of that case, it
noted   that   the   relationship   between   the   bank   and   the   locker
holders,   who   are   also   the   account   holders   of   the   bank,   will   be
that of a service provider and consumer. 
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10.  We may also refer to the circulars which the RBI has issued
on this subject from time to time. The 2007 Circular (supra) has,
inter alia, provided the following recommendations for facilitating
easy and safe operation of lockers:
“1.4   Banks   are   also   advised   to   give   a   copy   of   the
agreement   regarding   operation   of   the   locker   to   the
locker­hirer at the time of allotment of the locker.
2.1 Operations of Safe Deposit Vaults/Lockers
Banks   should   exercise   due   care   and   necessary
precaution   for   the   protection   of   the   lockers   provided
to the customer . Banks should review the systems in
force   for   operation   of   safe   deposit   vaults   /   locker   at
their   branches   on   an   on­going   basis   and   take
necessary   steps.   The   security   procedures   should   be
well­documented   and   the   concerned   staff   should   be
properly   trained   in   the   procedure.   The   internal
auditors   should   ensure   that   the   procedures   are
strictly adhered to.
xxx
2.2 (ii) Where the  lockers have  not  been operated for
more   than   three   years   for   medium   risk   category   or
one   year   for   a   higher   risk   category,   banks   should
immediately   contact   the   locker   hirer   and   advise   him
to   either   operate   the   locker   or   surrender   it.   This
exercise should be carried out even if the locker hirer
is paying the rent regularly. Further, the bank should
ask   the   locker   hirer   to   give   in   writing,   the   reasons
why   he/she   did   not   operate   the   locker.   In   case   the
locker hirer has some genuine reasons as in the case
of   NRIs   or   persons   who   are   out   of   town   due   to   a
transferable job etc., banks may allow the locker hirer
to   continue   with   the   locker.   Further,   banks   should
ask   the   locker   hirer   to   give   in   writing,   the   reasons
why   he/she   did   not   operate   the   locker.   In   case   the
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locker­hirer has some genuine reasons as in the case
of   NRIs   or   persons   who   are   out   of   town   due   to   a
transferable job etc., banks may allow the locker hirer
to   continue   with   the   locker.   In   case   the   locker­hirer
does   not   respond   nor   operate   the   locker,   banks
should   consider   opening   the   lockers   after   giving   due
notice to him …
(iii)   Banks   should   have   clear   procedure   drawn   up   in
consultation   with   their   legal   advisers   for   breaking
open the lockers and taking stock of inventory . ”
 (emphasis supplied)
Hence the RBI had issued clear directions as far back as in
2007   imposing   duty   of   care   in   respect   of   protection   of   the   bank
lockers and mandating transparency vis a vis the locker holder in
allotment and breaking open of the lockers. However, it has been
left   to   the   discretion   of   the   individual   banks   to   formulate   the
exact   procedures   for   fulfilling   this   duty   of   care.   The   banks   are
likely to draft the locker hiring agreements in a manner which is
favourable   to   their   interests,   including   clauses   to   the   effect   that
the lockers are to be operated at the consumers’ own risk. 
10.1.   On   1.07.2015,   the   RBI   issued   a   Master   Circular   No.
59/2015­16   on   Customer   Service   in   Banks   which   included
updated   guidelines   on   locker   operation.   However,   these   were
more or less similar to what has already been stated in the 2007
Circular.   Further,   neither   of   the   aforementioned   Circulars
provide   any   guidance   on   the   degree   of   care   that   needs   to   be
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exercised   by   the   bank   for   safeguarding   the   lockers   or   detail   the
exact steps that should be taken in this regard. 
11. It appears to us that the present state of regulations on the
subject of locker  management is inadequate and muddled. Each
bank   is   following   its   own   set   of   procedures   and   there   is   no
uniformity   in   the  rules.  Further,  going   by   their  stand   before   the
consumer   fora,  it  seems   that   the   banks   are   under   the  mistaken
impression   that   not   having   knowledge   of   the   contents   of   the
locker exempts them from liability for failing to secure  the lockers
in themselves   as well. In as much as we are the highest Court of
the country, we cannot allow the litigation between the bank and
locker holders to continue in this vein. This will lead to a state of
anarchy wherein the banks will routinely commit lapses in proper
management of the lockers, leaving it to the hapless customers to
bear   the   costs.  Hence,  we  find   it  imperative   that   this   Court   lays
down   certain   principles   which   will   ensure   that   the   banks   follow
due   diligence   in   operating   their   locker   facilities,   until   the
issuance of comprehensive guidelines in this regard. 
12. Thus,   we   emphasize   that   irrespective   of   the   value   of   the
articles   placed   inside   the   locker,   the   bank   is   under   a   separate
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obligation   to   ensure   that   proper   procedures   are   followed   while
allotting and operating the lockers:
(a)  This includes maintenance of a locker register and
locker key register. 
(b) The locker register shall be consistently updated in
case of any change in allotment. 
(c)   The   bank   shall   notify   the   original   locker   holder
prior   to   any   changes   in   the   allotment   of   the   locker,
and give them reasonable opportunity to withdraw the
articles deposited by them if they so wish.
(d)   Banks   may   consider   utilizing   appropriate
technologies,   such   as   blockchain   technology   which   is
meant for creating digital ledger for this purpose.
(e)   The   custodian   of   the   bank   shall   additionally
maintain  a record of  access  to  the lockers, containing
details of all the parties who have accessed the lockers
and the date and time on which they were opened and
closed. 
(f)   The   bank   employees   are   also   obligated   to   check
whether   the   lockers   are   properly   closed   on   a   regular
basis.   If   the   same   is   not   done,   the   locker   must   be
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immediately   closed   and   the   locker   holder   shall   be
promptly   intimated   so   that   they   may   verify   any
resulting discrepancy in the contents of the locker. 
(g)   The concerned staff shall also check that the keys
to the locker are in proper condition. 
(h)   In   case   the   lockers   are   being   operated   through   an
electronic   system,   the   bank   shall   take   reasonable
steps   to   ensure   that   the   system   is   protected   against
hacking or any breach of security.
(i)   The   customers’   personal   data,   including   their
biometric   data,   cannot   be   shared   with   third   parties
without   their   consent.   The   relevant   rules   under   the
Information Technology Act, 2000 will be applicable in
this regard.
(j)     The   bank   has   the   power   to   break   open   the   locker
only   in   accordance   with   the   relevant   laws   and   RBI
regulations,   if   any.   Breaking   open   of   the   locker   in   a
manner   other   than   that   prescribed   under   law   is   an
illegal act which amounts to gross deficiency of service
on the part of the bank as a service provider. 
(k)     Due   notice   in   writing   shall   be   given   to   the   locker
holder at a reasonable time prior to the breaking open
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of   the   locker.   Moreover,   the   locker   shall   be   broken
open   only   in   the   presence   of   authorized   officials   and
an   independent   witness   after   giving   due   notice   to   the
locker   holder.   The   bank   must   prepare   a   detailed
inventory  of  any  articles found inside the locker, after
the locker is opened, and make a separate entry in the
locker   register,   before   returning   them   to   the   locker
holder.   The   locker   holder’s   signature   should   be
obtained   upon   the   receipt   of   such   inventory   so   as   to
avoid any dispute in the future. 
(l)   The   bank   must   undertake   proper   verification
procedures to ensure that no unauthorized party gains
access   to   the   locker.   In   case   the   locker   remains
inoperative   for   a   long   period   of   time,   and   the   locker
holder cannot be located, the banks shall transfer the
contents of the locker to their nominees/legal heirs or
dispose   of   the   articles   in   a   transparent   manner,   in
accordance   with   the   directions   issued   by   the   RBI   in
this regard.
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(m)   The   banks   shall   also   take   necessary   steps   to
ensure   that   the   space   in   which   the   locker   facility   is
located is adequately guarded at all times.
(n)     A copy of the locker hiring agreement, containing
the relevant terms and conditions, shall be given to the
customer at the time of allotment of the locker so that
they are intimated of their rights and responsibilities.
(o)     The   bank   cannot   contract   out   of   the   minimum
standard of care with respect to maintaining the safety
of the lockers as outlined supra.
13. 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.  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.
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. Thus, the breaking open of the locker
was   in   blatant   disregard   to   the   responsibilities   that   the   bank
38

owed   to   the   customer   as   a   service   provider.   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. It is
case of gross deficiency in service on the part of the bank.
14. Thus, looking to the facts and circumstances of the case, we
deem   it   appropriate   to   impose   costs   of   Rs.   5,00,000/­   on   the
Bank   which   should   be   paid   to   the   Appellant   as   compensation.
The amount of Rs. 5,00,000/­ shall be deducted from the salary
of   the   erring   officers,   if   they   are   still   in   service.     If   the   erring
officers have already retired, the amount of costs should be paid
by   the   Bank.   Additionally,   the   Appellant   shall   be   paid   Rs.
1,00,000/­ as litigation expense.
15.  Before concluding, we would like to make a few observations
on   the   importance   of   the   subject   matter   of   the   present   appeal.
With   the   advent   of   globalization,   banking   institutions   have
acquired   a   very   significant   role   in   the   life   of   the   common   man.
Both   domestic   and   international   economic   transactions   within
the   country   have   increased   multiple   folds.   Given   that   we   are
steadily moving towards a cashless economy, people are hesitant
to keep their liquid assets at home as was the case earlier. Thus,
as   is   evident   from   the   rising   demand   for   such   services,   lockers
39

have   become   an   essential   service   provided   by   every   banking
institution. Such services may be availed of by citizens as well as
by foreign nationals. Moreover, due to rapid gains in technology,
we   are   now   transitioning   from   dual   key­operated   lockers   to
electronically   operated   lockers.   In   the   latter   system,   though   the
customer   may   have   partial   access   to   the   locker   through
passwords   or   ATM   pin,   etc.,   they   are   unlikely   to   possess   the
technological know­how to control the operation of such lockers.
On   the   other   hand,   there   is   the   possibility   that   miscreants   may
manipulate the technologies used in these systems to gain access
to the lockers without the customers’ knowledge or consent. Thus
the customer is completely at the mercy of the bank, which is the
more resourceful party, for the protection of their assets.
In such a situation, 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
40

investor   confidence   and   harm   our   reputation   as   an   emerging
economy. 
15.1 Thus 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. In view of the same, we direct the RBI 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 is 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.
16.  The Appeal is disposed of accordingly. 
................................................J.
(MOHAN M. SHANTANAGOUDAR) 
...............................................J.
(VINEET SARAN)
NEW DELHI
FEBRUARY 19, 2021
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