Banks Cannot Disown Liability For Locker Contents: NCDRC Holds Central Bank Liable For Deficiency In Service

Brief Facts of the Case

The complainant maintained a locker with the Central Bank of India, paying the annual rent regularly. Thieves stole the complainant's ornaments from the locker, valued at Rs. 1,85,780, for which an FIR was filed with the police. The complainant submitted a claim for the loss to the bank, but the bank denied the claim, citing no negligence on its part. Dissatisfied with the bank's response, the complainant filed a complaint before the District Forum. The District Forum allowed the complaint following which the Bank filed an appeal in the State Commission. The State Commission dismissed the appeal, so the bank filed a revision petition before the National Commission.

Contentions of the Opposite Party

The bank argued that the order was against the established law about bank liability for thefts from customer lockers, making it unfair and wrong. It was also claimed that the complainant did not provide any evidence to prove what was in the locker, as stated in the complaint. Therefore, the bank requested that the Revision Petition be accepted and the previous orders be overturned.

Observations by the Commission

The Commission observed that the demand for locker services has risen, making them essential for banking institutions used by both citizens and foreign nationals. The Commission noted that with technological advancements, banks are moving from dual key-operated lockers to electronic lockers. While customers may have partial access through passwords or ATM pins, the Commission pointed out that they often lack the technical knowledge to control these systems. The Commission asserted that banks cannot deny their liability for locker operations, as customers use these services to ensure the safety of their valuables, and failing to protect these assets would violate the Consumer Protection Act and harm investor confidence. Following the Supreme Court's orders in Amitabha Dasgupta Vs. United Bank of India & Ors, the Commission, referred to the RBI's circular issued on August 18, 2021, outlining banks' liability in cases of fire, theft, burglary, robbery, building collapse, or fraud by bank employees. The Commission emphasized that banks must ensure safety and security to prevent such incidents and cannot disclaim liability for locker contents. The Commission stated that if losses occur due to these events or employee fraud, banks' liability is set at 100 times the annual rent of the locker. In this case, the Commission observed that the complainant's passbook showed the bank deducted the annual locker rent of Rs. 1103 on April 19, 2010, with the rent being Rs. 1000 at the time of the incident in 2015. Therefore, the Commission calculated the bank's liability to be Rs. 100,000 for the loss of the locker contents. Based on these deliberations, the Commission found merit in the present Revision Petition and partially allowed it. The Commission modified the lower Fora's orders, directing the bank to pay Rs. 100,000 with 9% annual interest from the complaint's filing date.

Case Title: Central Bank of India Vs. M/S. Abhay Kumar Jain

Case Number: R.P. No. 1865/2022