Holding

The bank is liable for gross deficiency in service and must pay compensation, but liability for the locker contents and any bailment claim must be determined in a separate civil suit; the RBI must issue locker‑management rules within six months.

Summary

Amitabha Dasgupta, a locker holder, complained that United Bank of India had inadvertently broken open his locker despite his rental dues being cleared, and that only two of the seven ornaments he claimed to have deposited were returned. The District Consumer Forum found a deficiency of service and awarded compensation, but directed the appellant to pursue a civil suit for the disputed contents. The Supreme Court affirmed that the bank’s negligence in breaking the locker constituted gross deficiency in service, ordering Rs.5,00,000 as compensation and Rs.1,00,000 as litigation costs. However, it held that questions about the actual contents and any bailment liability must be decided in a separate civil suit. The Court also directed the RBI to issue comprehensive locker‑management rules within six months and laid down interim procedural guidelines for banks.

Issues considered

Whether a bank, as a locker provider, owes a duty of care under bailment or any other law for the contents of the locker and whether such liability can be adjudicated by a consumer forum.
Whether the bank owes an independent duty of care as a service provider for locker management and whether compensation for deficiency of service is available.
Whether the appellant must approach a civil court for recovery of the locker contents/value.
Whether the RBI should be mandated to issue uniform regulations governing locker facilities.

Legislation cited

Subjects

consumer protectionbank lockerdeficiency of servicebailmentduty of careRBI guidelinescompensationcivil suitlocker management

Judgment

[2021] 1 S.C.R. 905 905

AMITABHA DASGUPTA A
v.
UNITED BANK OF INDIA & ORS.
(Civil Appeal No. 3966 of 2010)
FEBRUARY 19, 2021 B
[MOHAN M. SHANTANAGOUDAR
AND VINEET SAREEN, JJ.]
Consumer Protection Act, 1986 – Deficiency in service –
Dispute w.r.t contents of locker of the appellant with respondent-
Bank which it broke open inadvertently – District Commission C
allowed the appellant’s complaint – State Commission inter alia
accepted the finding on deficiency of service, however held that
Consumer forum has limited jurisdiction on recovery of the locker’s
contents and directed appellant to approach civil court – Revision
petition – Dismissed by NCDRC – On appeal, held: Respondent D
has not disputed their negligence in breaking open the locker in
spite of clearance of rental dues by the appellant – But the number
of items originally deposited by the appellant inside the locker is a
contested fact – Appellant must file a separate suit before the
competent civil court for seeking relief as to whether he is entitled
to claim return/recovery of value of the ornaments allegedly E
deposited by him and for proving that the said items were actually
in the custody of the bank – However, breaking open of the locker
was in blatant disregard to the responsibilities that the bank owed
as a service provider – It is gross deficiency in service on the part
of the bank – Bank to pay costs of Rs.5,00,000/- as compensation F
and Rs.1,00,000/- as litigation expense to the appellant – Contract
Act, 1872 – ss.148, 149.
Consumer Protection:
Bank and locker holder – Relationship between – Indian Law
vis-à-vis foreign law – Discussed – Contract Act, 1872 – ss.148, G
149.
Locker management – Separate duty of care of Banks –
Discussed – Consumer Protection Act, 1986 – Consumer Protection
Act, 2019.
H
905
906 SUPREME COURT REPORTS [2021] 1 S.C.R.

A Directions by Supreme Court:
Locker management – Due diligence by Banks – Procedures
laid down – Information Technology Act, 2000.
Locker facility/Safe deposit facility management – Direction
to RBI – Held: RBI to issue suitable rules or regulations mandating
B the steps to be taken by banks with respect to locker facility/safe
deposit facility management within six months from the date of the
present judgment – Until such Rules are issued, the principles stated
herein, to remain binding upon the banks providing locker or safe
deposit facilities – Consumer Protection.
C Disposing of the appeal, the Court
HELD 1.1 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)
D delivery should be for accomplishment of a purpose. There is no
substantive domestic legislation or sector specific 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. However, what has been commonly
E contested in various High Court judgments guiding the field 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, the application of the principles of bailment was
contingent on determining whether possession was transferred
F 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.
G 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. [Paras 6, 7, 8.6][915-A-B; 922-G-H; 923-A-B]
Jagdish Chandra Trikha v. Punjab National Bank AIR
1998 Delhi 266; National Bank of Lahore Ltd. v. Sohan
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 907

Lal Saigal AIR 1962 P H 534; Mohinder Singh Nanda A
v. Bank of Maharashtra 1998 ISJ (Banking) 673; Atul
Mehra v. Bank of Maharashtra AIR 2003 P&H 11;
Punjab National Bank, Bombay v. K.B. Shetty 1991 (1)
C.P.C. 592; Mahender Singh Siwach v. Punjab and
Sind Bank (2006) 4 CPJ 231 (NC); Pune Zilla
B
Madyawarti Sahakari Bank Limited v. Ashok Bayaji
Ghogare 2015 SCC OnLine NCDRC 2832 – referred
to.
1.2 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 C
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. No
conclusions are being recorded on whether the Appellant locker
holder in the present case is entitled to claim return or recovery D
of the value of the ornaments alleged to have been deposited by
him. This Court is 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 E
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 merits of the case, including as to whether
the law of bailment is applicable, or any other law as the case may
be. [Para 8.10][924-B-E] F
2.1 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 G
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

H
908 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B
by claiming ignorance of the contents of the lockers. 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-à-vis the locker holder in allotment and breaking
open of the lockers. However, it has been left to the discretion of
C 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. On 1.07.2015, the RBI issued a
Master Circular No. 59/2015-16 on Customer Service in Banks
D
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 exercised by the bank for safeguarding the lockers or detail
E the exact steps that should be taken in this regard.
[Paras 9, 10, 10.1][924-F-H; 925-A; 930-A-D]
2.2 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.
F 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 being the highest Court of the country, this Court
cannot allow the litigation between the bank and locker holders
G 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, it is found imperative that this Court lays down certain
principles which will ensure that the banks follow due diligence
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 909

in operating their locker facilities, until the issuance of A
comprehensive guidelines in this regard. 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. Procedures enumerated.
[Paras 11, 12][930-D-G]
B
2.3 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 C
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 D
bank 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. Costs of Rs. 5,00,000/- imposed on the Bank to be
paid to the Appellant as compensation. Additionally, the Appellant E
be paid Rs. 1,00,000/- as litigation expense. [Paras 13, 14]
[932-F-H; 933-A-B]
2.4 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 F
should not have the liberty to impose unilateral and unfair terms
on the consumers. 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 12 in particular, shall remain binding upon G
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. [Para 15.1][934-A-C]
H
910 SUPREME COURT REPORTS [2021] 1 S.C.R.

A Charan Singh v. Healing Touch Hospital & Ors.(2000)
7 SCC 668 : [2000] 3 Suppl. SCR 337 – referred to.
UCO Bank v. RG Srivastava 1996 (1) CPR 97; Mamta
Chaudaha v. Branch Manager/Head Manager, State
Bank of India (2020) 1 CPJ 276 (NC) – referred to.
B Roberts v. Stuyvesant Safe Deposit Co. (1890) 123 N.Y
57; Emma M. Lockwood v. The Manhattan Storage &
Warehouse Company N.Y.S 974 (N.Y. 1898); Mayer v.
Brensigner 54 N.E 159 (1899); National Safe Deposit
Co. v. Stead 95 N.E. 973 (1911); Cussen v. Southern
C Cal. Savings Bank 65 P. 1099 (1901); Blair v. Riley
175 N.E.R 210; National Safe Deposit Company v. Stead,
Attorney General 95 N.E.R. 973 – referred to.
Case Law Reference
[2000] 3 Suppl. SCR 337 referred to Para 3
D
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3966
of 2010.
From the Judgment and Order dated 18.12.2008 of the National
Consumer Disputes Redressal Commission, New Delhi in Revision
Petition No. 389 of 2005.
E
Parijat Sinha, Devesh Mishra, Ms. Pallak Bhagat, Rudra Dutta,
Ms. Reshmi Rea Sinha, Rajesh Kumar-I, Anant Gautam, Nipun Sharma,
M/S. Mitter & Mitter Co., Advs. for the appearing parties.
The Judgment of the Court was delivered by
F 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 Consumer Disputes
Redressal Commission (‘State Commission’) dated 12.10.2004.
G
2. The following are the facts out of which this appeal arises:
In the early 1950’s, the Appellant’s mother (since deceased) took
a locker on rent bearing No. A-222 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,
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 911
[MOHAN M. SHANTANAGOUDAR, J. ]

the Appellant visited the Respondent No.1 Bank to operate the locker A
and deposit the locker rent. However, the Appellant 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. Further, that the locker had
subsequently been reallocated to another customer.
2.2 On 29.05.1995 and 2.06.1995, the Appellant sent B
communications to Respondent No. 1 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. 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 C
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 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 D
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 non-sealed 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 E
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 F
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 G
locker though there were no pending 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/- H
912 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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.
B 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
C summary trial. Therefore, the Appellants were directed to approach the
civil court for adjudication on the contents of the locker.
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
D 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
E 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
F 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 jewellery can only be
awarded after appreciation of evidence by the trial court.
G
4. Heard Learned Counsel for both parties. Based on a perusal of
the record, the following issues arise for consideration in the present
appeal:
1
1996 (1) CPR 97.
2
(2000) 7 SCC 668.
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 913
[MOHAN M. SHANTANAGOUDAR, J. ]

4.1 First, Whether the Bank owes a duty of care to the locker A
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 B
customers with respect to diligent management and operation of
the locker, separate from its contents? Whether compensation
can be awarded for non-compliance with such duty?
I. Relief with Respect to the Contents of the Locker
5. Disputes between banks and locker holders, pertaining to loss C
of articles placed inside the locker, have been subject to judicial
consideration in various jurisdictions for nearly a 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. D
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.
E
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 F
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, G
discharged those duties and obligations to the plaintiff which the
law imposed upon it in regard to the care and custody of her
property.”
(emphasis supplied)
3
(1890) 123 N.Y 57. H
914 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B 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
C 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
the necessary care required under the laws of bailment for the protection
of its contents. Therefore, before applying the laws of bailment, the
D 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
E (‘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
F 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
G the goods in the possession of the intended bailee or of any person
authorised to hold them on his behalf.”
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).
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 915
[MOHAN M. SHANTANAGOUDAR, J. ]

Thus, from the aforementioned provisions, it can be inferred that A
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.
7. Unfortunately, there is no substantive domestic legislation or B
sector-specific 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 Safe-Deposit 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 C
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 D
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.”
E
(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 holder, even if the bank
has no knowledge of the contents of the locker. F
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/2006-2007/325) 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
G
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
8
https://www.rbi.org.in/Scripts BS_CircularIndexDisplay.aspx?Id=3196.
9
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=3422. H
916 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B 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/
C 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-change. The position adopted
by the banks was challenged before the Competition Commission of
India (‘CCI’) as being in the nature of an anti-competitive practice. The
D 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
E 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
F 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
G 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
10
Kush Kalra v. Reserve Bank of India, 2017 SCC OnLine CCI 41.
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 917
[MOHAN M. SHANTANAGOUDAR, J. ]

deposit locker will not be disclosed by the customer to the bank A
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
B
Corporation Bank states that 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, C
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) D
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 E
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 F
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 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 G
safekeeping. The box was moved to the Rawalpindi branch, then
subsequently to the Lahore branch, and finally to India in November
1961 under the Indo-Pakistan Movable Property Agreement. Upon
presentation of the box, the Appellant refused to take delivery since the
11
AIR 1998 Delhi 266. H
918 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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:
B
“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
C 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.”
(emphasis supplied)
D 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
E 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.
F 8.1 However, the locker service provided by the banks has evolved
since the pre-independence 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
G system, banks now provide customers with partial access to the lockers.
Under the current 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.
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 919
[MOHAN M. SHANTANAGOUDAR, J. ]

Therefore, a combination of the bank’s key and the locker holder’s key A
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
B
the locker, as was the case in Jagdish Chandra Trikha (supra). The
question that therefore arises for consideration before this Court is whether
the modern-day bank locker system would be guided by the laws of
bailment.
8.2 An important decision which has considered the modern-day
bank locker system is that in National Bank of Lahore Ltd. v. Sohan C
Lal Saigal.12 In that case, the appellant bank had provided locker service
for the safe custody of valuables. The 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 D
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. Riley13 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 bailor-bailee relationship applied. In E
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 F
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) G
The High Court further observed that the locker holders had
produced specific evidence in the form of lists of the articles of jewellery
12
AIR 1962 P H 534.
13
175 N.E.R 210.
14
95 N.E.R. 973. H
920 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
forty-four safe keeping lockers in the Respondent bank were broken
open by miscreants and the contents were emptied. The Punjab &
B 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
defendant-Bank had the knowledge of the articles in the locker.
C 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.”
D (emphasis supplied)
8.4 Subsequently, the Punjab and Haryana High Court again
undertook a comprehensive look into the present-day 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
E 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 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,
F 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
G 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.
15
1998 ISJ (Banking) 673.
16
H AIR 2003 P&H 11.
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 921
[MOHAN M. SHANTANAGOUDAR, J. ]

18…These authorities are of no assistance to the appellants in A
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
B
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 C
would arise. In the present case, it is impossible to 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
D
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 E
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 F
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 G
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)
H
922 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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:
B
“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
C 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
D 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.”
E Therefore, the Court in Atul Mehra was sympathetic to the fact
that the principles of bailment may be applicable even to the contemporary
dual-key locker system if the bank is in the 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
F 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
G 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
H requires factual findings on whether the bank had knowledge of the
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 923
[MOHAN M. SHANTANAGOUDAR, J. ]

contents of the locker; or whether the locker holder had prepared any A
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 the consumer fora.
This aspect must be evaluated by the civil court, upon appreciation of
B
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 C
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 D
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 placed inside the locker, which has not been done
in the present case.
E
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 F
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/ G
Head Manager, State Bank of India,20 the National Commission again
17
1991 (1) C.P.C. 592.
18
(2006) 4 CPJ 231 (NC).
19
2015 SCC OnLine NCDRC 2832.
20
(2020) 1 CPJ 276 (NC). H
924 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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 entry to the locker. Hence the complaint for recovery
of value of the ornaments was dismissed.
B 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
C 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
D 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
merits of the case, including as to whether the law of bailment is applicable,
E 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
F 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
G 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
H liability regime to the contents of the locker. The banks as custodians of
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 925
[MOHAN M. SHANTANAGOUDAR, J. ]

public property cannot leave the customers in the lurch merely by claiming A
ignorance of the contents of the lockers.
9.1 In this regard, we may refer to the observations made by the
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 B
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 C
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 D
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 E
was also recorded on the 21stApril, 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 F
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 G
3,500/- by way of compensation to the locker holder.
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
H
926 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B 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
C 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,
D 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
E year 1978, it is not clear how it could be allotted to Mahendra
Singh Siwach in the year 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
F 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
G 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 applicant-accused
claims that he was the owner of the property kept in the locker
and the locker belonged to him. In these circumstances, when
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 927
[MOHAN M. SHANTANAGOUDAR, J. ]

no action has been taken against the bank authorities, I think A
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 B
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
C
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 D
be recorded. The name(s) of the 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 E
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
F
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 G
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 H
928 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B
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
C 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
D 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
E
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
F the locker register, locker key register, non-payment 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
G 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.
10. We may also refer to the circulars which the RBI has issued
H on this subject from time to time. The 2007 Circular (supra) has, inter
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 929
[MOHAN M. SHANTANAGOUDAR, J. ]

alia, provided the following recommendations for facilitating easy and A
safe operation of lockers:
“1.4 Banks are also advised to give a copy of the agreement
regarding operation of the locker to the locker-hirer at the time of
allotment of the locker.
2.1 Operations of Safe Deposit Vaults/Lockers B

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 on-going basis and take necessary
steps. The security procedures should be well-documented and C
the concerned staff should be properly trained in the procedure.
The internal auditors should ensure that the procedures are strictly
adhered to.
xxx
D
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 E
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 F
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. In case the
locker-hirer does not respond nor operate the locker, banks should
consider opening the lockers after giving due notice to him… G
(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)
H
930 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B
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/
2015-16 on Customer Service in Banks which included updated guidelines
C 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 exercised by the bank for safeguarding the lockers or
detail the exact steps that should be taken in this regard.
D 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
E 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
F 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
G placed inside the locker, the bank is under a separate 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.
H
AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 931
[MOHAN M. SHANTANAGOUDAR, J. ]

(b) The locker register shall be consistently updated in case of A
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. B
(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 C
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 immediately closed and the locker holder D
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.
E
(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
F
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 G
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 of the locker. Moreover,
the locker shall be broken open only in the presence of authorized
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932 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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
B
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
C 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.
(m) The banks shall also take necessary steps to ensure that the
space in which the locker facility is located is adequately guarded
D 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.
E
(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
F 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
G 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 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
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AMITABHA DASGUPTA v.UNITED BANK OF INDIA & ORS. 933
[MOHAN M. SHANTANAGOUDAR, J. ]

negligence of the bank itself. It is case of gross deficiency in service on A
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 B
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 C
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 D
services, lockers 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 key-operated lockers to electronically
operated lockers. In the latter system, though the customer may have E
partial access to the locker through passwords or ATM pin, etc., they
are unlikely to possess the technological know-how 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 F
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 G
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.
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934 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 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.
B
Until such Rules are issued, the principles stated in this judgment, in
general and at para 12 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
C controversy on this issue is clarified as well.
16. The Appeal is disposed of accordingly.

Divya Pandey Appeal disposed of.

D

E

F

G

H