The relationship between the bank and the person hiring the locker is not that of a landlord and tenant. That means the bank is not aware about the contents of the locker and that is something only the individual knows. A bailor-bailee relationship obviously means that the bank does not take responsibility for the contents of the safe deposit locker is hiring of bank locker bailment and that continues to be the sole liability of the individual. The locker can only be opened by the person who has kept the valuables in the locker combined with the master key of the bank. In any unforeseen circumstance like theft, burglary, war or civil strife, the bank is absolved of any responsibility pertaining to the contents of the locker.
It was stated in the FIR that all other 43 lockers in the strong room were also broken in and contents were thereof stolen. In February 1989, all the 44 locker holders made representation to the bank by a registered acknowledgment duly pointing out the gross negligence and misconduct of the respondent in maintaining the lockers. They have contended that the alleged strong room was made up the affair and it was made only of plywood, whereas it ought to have been made of iron and concrete. What needs to be kept in mind while talking about bailment is it can be only of goods and does not include services.
Such incidents shake our faith in the institution,’’ said Sarita Singh a government employee who has an account with a public sector bank. With cases piling up where customers have complained about their valuables missing from lockers but have found no redressal with the banks throwing the rule book at them, the foundation of trust is now shaky. A bailment is created for the sole benefit of the bailee when both parties agree the property temporarily in the bailee’s custody is to be used to his or her own advantage without giving anything to the bailor in return. The loan of a book from a library is a bailment for the sole benefit of the bailee. A bailor receives the sole benefit from a bailment when a bailee acts gratuitously—for example, if a restaurant, a bailee, provides an attended coatroom free of charge to its customers, the bailors. By virtue of the terms of the bailment, the bailee agrees to act without any expectation of compensation.
It was held in the Madras High Court that the lady did not have any action against the goldsmith as the jewels were lost from the possession of the lady at a time when the contract of bailment was not in force. Similarly, hiring and storing goods in a bank locker by itself is not bailment thought there is the delivery of goods to the bank premises. A bank cannot be presumed to know what goods are stored in any given locker at all times. If a bank is given actual and exclusive possession of the property inside a locker by the person who hired the locker, only then bailment under Section 148 can be assumed. In another case over 40 lockers of Central Bank branch UP were completely emptied out.
Asked for her experience with a private bank where she has a locker, a south Delhi housewife, Anouhita Banerjee, said it had been good so far. Unless otherwise indicated, all materials on these pages are copyrighted by Kalyan Krishna https://1investing.in/ MediaZ Private Limited. By continuing past this page, you agree to our Terms of Service, Cookie Policy, Privacy Policy and Content Policies. The locker register shall be consistently updated in case of any change in allotment.
The Bench, comprising of Justice S. Nijjar, has held that exclusive possession of the goods is sine qua non for bailment. Therefore, mere hiring of a locker would not be sufficient to constitute a contract of bailment as provided under Section 148 of the Indian Contract Act, 1872. He has added that the question of reasonable care and quantum of damages would arise only after it has been shown that actual exclusive possession of the property was given by the bailee to the bailor, i.
The safe deposit memorandum of hiring the locker clearly states that the bank will not be responsible for any loss or damage of the contents of the safe deposit vault in the case of war, civil disorder, theft or burglary. The means unless the loss of valuables happens due to internal fraud or misappropriation, the banks will not undertake any responsibility for valuables in your locker. In fact, the bank locker agreement clearly stipulates that the valuables will remain in the safe deposit vault purely at the personal risk of the hirer who has hired the locker for storing the valuables. The contract also contains a very generic statement that the bank in question will take all measures and necessary precautions to ensure that the locker and its contents are protected. However, it is very clear from the agreement that in any eventuality, the bank does not assume any liability for the value of the items stored in the vault.
Relationship of trust with bank shaken
The liability of the contents of a bank locker is placed on the customer itself as long as he has a part in accessing the lockers while the liability would undoubtedly shift to the bank in case of breach of trust on any of the employees parts. This means unless the loss of valuables happens due to internal fraud or misappropriation, the banks will not undertake any responsibility for valuables in your locker. The judge has also referred to the Mohinder Singh Nanda’s case which refers to the same incident of the robbery of 44 lockers. The judge had held that it is not per incuriam hence the same will be binding on this court.
Therefore, the Appellant must file a separate suit before the Civil Court for seeking desired relief. It is the duty of the bailor to accept the goods after the purpose for which such bailed goods were bailed is accomplished. Also, the bailor is under the duty to pay the extraordinary expenses acquired by the bailee for such bailment. And laid down the proposition that a relationship of bailment cannot arise without the bailee knowing and controlling the goods exclusively.
Gratuitous Bailment:
Though we have filed complaint with police for the safety of your money we request you to not fall prey to such fraudsters. You can check about our products and services by visiting our website You can also write to us at , to know more about products and services. The banks cannot wash off their hands and claim that they bear no liability towards their customers for the operation of the locker.
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- He has added that the question of reasonable care and quantum of damages would arise only after it has been shown that actual exclusive possession of the property was given by the bailee to the bailor, i.
- The strong room in which the locker was located was broken in and the contents thereof were stolen by miscreants.
- This problem might be solved by adopting the American legal stand and presuming the existence of a bailment, so that the banks are forced to raise the required standard of care.
- Therefore, a combination of the bank’s key and the locker holder’s key is required for opening a locker, providing neither with complete access.
In other words, the bailee authorizes the person to keep possession of the goods. In 1966 there was a case by the name Bank of Chittor v. Narsimbulu AIR 1966, in which a person pledged cinema projector with the bank but the bank allowed him to keep the projector so as to keep the cinema hall running. In this case, the court held that this was constructive delivery because something was done that changed the legal possession of the projector. Even though the physical possession was with the person, the legal possession was with the bank. Thus, the Court answered the issues of whether the bank has a duty under bailment laws and whether it could be adjudicated in a consumer forum. Additionally, the court also deliberated upon whether the bank owes an independent duty of care to its customers with respect to diligent management and the issue of compensation in such cases.
Duties of a Bailor:
The bank is supposed to 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 wish to. The Delhi High Court in the case of Jagdish Chandra Trikha v. Punjab National Bank had held that Banks bear a complete entrustment of possession of the contents of a locker. When a Bank accepts items to be placed in their locker, they accept to do that as a bailee and it is expected that the usual care, which is demanded in such matters would be undertaken.
Defines bailment as the conveyance of commodities from one person to another for a certain purpose. However, the State Commission held that a Consumer Forum has a limited jurisdiction to adjudicate on the recovery of the contents of the locker and the National Consumer Forum also held this impugned judgment. Delivery of possession, as required for bailment, can be made in two ways – Actual or Constructive. Bailment can also be described as ‘the delivery of goods to another person for a particular use’. The hiring agreement between the two parties provides for a written notice of termination. Moreover, the Appellant was not given any notice prior to such tampering with the locker.
This is a key feature of bailment that distinguishes it from other types of relations such as agency. Bank v. Hem Chandra Sarkar 1990, that the distinguishing feature between a bailment and an agency is that the bailee does not represent the bailor. Thus, a banker who was holding the goods on behalf of its account holder for the purpose of delivering them to his customers against payment was only a bailee and not an agent. In order to have a valid bailment, the delivery of the goods and property must be done upon a contract mentioning that the goods will be returned when the purpose is accomplished. Of UP, in which the jewelry of the plaintiffs was stolen and was later seized by police.
Judgment
This means that mere hiring of a locker would not be sufficient to constitute a contract of bailment as provided under Section 148 of the ICA. In order to constitute bailment, as provided under this Section, it is 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 would arise. In recent times there have been a number of such cases where the liability of the banker in the event of loss to locker valuables comes into question. A group of burglars, in a daring robbery attempt, dug a 125 feet long tunnel and decamped with valuables from more than 75 lockers at the PNB, Sonepat branch.
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The bank must undertake proper verification procedures to ensure that no unauthorized party gains access to the locker. When the Appellant went to collect the contents of the locker, he found only two of the seven ornaments that had been deposited in the locker in an envelope. The Chief Manager of the bank admitted to have inadvertently broken open the locker even when there were no outstanding dues to be paid.