Duty of care should be exercised by bank, irrespective of application of laws of bailment to contents of locker

Banks are under the mistaken impression that not knowing the contents of the locker exempts them from liability for failing to secure the lockers in themselves as well. The banks are likely to draft the locker hiring agreements in a manner that is favourable to their interests, including clauses to the effect that the lockers are to be operated at the consumers’ own risk.

Banks as service providers 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 a public property cannot leave the customers in the lurch merely by claiming ignorance of the contents of the lockers.

In the present case Bank inadvertently broke the Customer’s locker, without any just or reasonable cause, even though he had already cleared his pending dues. Moreover, the Customer was not given any notice before such tampering with the locker.

Supreme Court held that breaking open 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 negligence of the bank itself. It is a case of gross deficiency in service on the part of the bank. The court imposed costs of Rs. 5,00,000/- on the Bank, which should be paid to the customer as compensation.