Case Title: Central Bank of India Vs. M/S. Abhay Kumar Jain
Case Number: R.P. No. 1865/2022
In a recent ruling, the National Consumer Disputes Redressal Commission, led by AVM J. Rajendra, determined that banks have an obligation to ensure the safety and security of their locker facilities and cannot shirk responsibility for the contents of these lockers.
Let’s delve into the specifics of this case.
A customer had a locker with the Central Bank of India and was diligent about paying the annual rent. Tragedy struck when thieves looted the locker, making off with the customer’s ornaments valued at Rs. 1,85,780. The customer reported this loss to the bank, but the bank refused to accept any liability, insisting that it was not negligent. Frustrated with this denial, the customer lodged a complaint with the District Forum.
The District Forum ruled in favor of the customer, prompting the bank to appeal the decision with the State Commission. However, the State Commission upheld the original verdict, compelling the bank to petition the National Commission for a revision.
The bank contended that the decision contradicted established laws regarding bank liabilities for theft from customer lockers and was unjust. They also claimed that the customer failed to provide proof of the locker contents. Consequently, they requested that their Revision Petition be granted and the previous orders be overturned.
The Commission observed that the demand for locker services is on the rise, making it a crucial service provided by banks to both local and foreign customers. They noted that banks are shifting from dual key-operated lockers to electronic lockers due to technological advancements. Even though customers may have limited access through passwords or pins, they often lack the technical know-how to manage these systems.
The Commission stressed that banks cannot deny their liability for locker operations as customers use these services to safeguard their valuables. Failing to protect these assets would breach the Consumer Protection Act, damaging investor trust.
Referring to the Supreme Court’s orders in Amitabha Dasgupta Vs. United Bank of India & Ors and the RBI’s circular issued on August 18, 2021, the Commission highlighted the obligation of banks to ensure safety and prevent incidents such as fire, theft, burglary, building collapse, or employee fraud. They emphasized that banks cannot disclaim liability for locker contents.
In case of losses due to these events or employee fraud, a bank’s liability is pegged at 100 times the annual rent of the locker. In this particular case, the Commission noted that the customer paid an annual locker rent of Rs. 1103, as reflected in their passbook. Thus, the Commission calculated the bank’s liability to be Rs. 100,000 for the loss of the locker contents.
After considering all aspects, the Commission found the Revision Petition to have merit and partially allowed it. They amended the earlier orders, instructing the bank to pay Rs. 100,000 with 9% annual interest from the date of the complaint’s filing.
This ruling underscores the importance of banks securing their locker facilities and taking responsibility for their contents. Their failure to do so not only violates the Consumer Protection Act but also erodes consumer confidence.
