OVERVIEW
The Supreme Court issued guidelines regarding the banks' locker and safe deposit facilities to its customers including surety of proper functioning of the locker system, guarding against unauthorized access to lockers and provision of appropriate safeguards against theft and robbery.
Justice Mohan Shanthanagoudar and Justice Vineet Saran stated that no bank can wash off their hands and claim no liability towards their customers for their locker system, and issued guidelines to the Reserve Bank of India to lay down rules and regulations setting directives to be undertaken by banks regarding the same.
BACKGROUND
The issue arose when a helpless consumer appealed before the district consumer court for compensation when their locker was broken open by United Bank of India's Kolkata branch back in September 1994 for non-payment of rent.
The top court held that the breaking open of a locker is a ‘blatant disregard to the responsibilities that the bank owed to the customer as a service provider.'
The court proceeded to award Rs. 5 lacs as compensation to the petitioner and Rs. 1 lac towards the litigation expenses. The bank was asked to pay the amount to the petitioner by itself or by reducing it from the salaries of the erring bank officials, if they were still in office.
RECENT DEVELOPMENTS
The Court observed that the RBI had not specified the liability of banks in case such a situation arises.
RBI had issued directives to banks imposing duty of care with respect to the protection of bank lockers and mandating transparency to the locker holder in allotment and breaking open of lockers. However, it left the rest of the guidelines and procedures to be formulated by the banks individually for fulfilling its duty of care.
On reviewing the previous cases before the National Consumer Commission and High Courts, the Supreme Court observed that banks often took defence that they were not liable for damages as they were unaware of the contents of the locker.
The bench thus assigned the RBI with 6 months to formulate comprehensive directions mandating the steps to be undertaken by banks regarding their locker/safe deposit facility management. In the meantime, banks shall not to hold the liberty to impose unilateral and unfair means on consumers.
Further, locker shall only be opened under the presence of authorised officials and an independent witness once due notice is served to the locker holder.
CONCLUSION
This verdict may prove to be essential to consumer, especially to the petitioner in the mentioned case as they alleged that he was returned only two gold ornaments when he had previously kept seven in the locker. The Court, however, refused to take up this issue and asked the petitioner to file a civil suit to submit evidence of the same.
WHAT ARE YOUR VIEWS REGARDING THE REGULATIONS OF BANK WITH RESPECT TO THEIR LOCKERS/SAFE DEPOSIT FACILITIES? COMMENT BELOW!
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