AVM Jonnalagadda Rajendra, AVSM, VSM (Retd.)

The Appellants/Opposite Parties have filed the present First Appeal under Section 51 of the Consumer Protection Act, 2019 ("the Act") against the Order dated 16.03.2020 passed by the learned State Consumer Disputes Redressal Commission, West Bengal ("State Commission") in Consumer Complaint No. 300/2017, wherein the Complaint was partly allowed.

2. For convenience, the parties are referred to by the positions they held before the State Commission.

3. Brief facts of the case, as per the Complainants, are that the that Complainant No. 1, a reputed businessman engaged in various fields ranging from civil and electronic construction to pharmaceutical drugs, maintained several bank accounts in different banks in and around Bagdogra, where his business is situated. He, however, maintained only one bank locker - Locker No. 21 with OP-4, the concerned branch of the Opposite Party (OP) Bank for the purpose of keeping valuables and jewellery belonging to his family members, acquired personally or received as gifts during his marriage ceremony and on other occasions. On 05.05.2016, at around 10:00 AM, the Complainant received information that 16 lockers at OP No. 4 Branch, including Locker No. 21allotted to the Complainant, was broken open by burglars during the early hours of the same day. Upon receiving this shocking information, Complainant No.1 immediately rushed to the Bank and observed that the miscreants were able to enter the Bank premises and commit theft in an undisturbed manner. This was due to serious lapses on the part of OP Bank. He, along with other victims, took photographs of the Branch premises, including the strong room where the lockers were kept and lodged a written complaint before Bagdogra Police Station, which was diarised under GDE No.227 dated 06.05.2016. He later came to know that OP-4 had also lodged an FIR being No.96/2016 dated 05.05.2016 with the same police station. Thereafter, the Complainant submitted a detailed list of jewellery and valuables kept in the locker, along with a claim for compensation based on his initial estimate to OP-4. Subsequently, the Complainant obtained an expert assessment of the loss from Sri Sameer Banerjee, Chartered Engineer, Valuer, Loss Assessor, and Advocate. The assessment determined the valuation of Gold and jewellery studded ornaments weighing 837.931 gm valued at Rs. 25,82,941 (personally owned; and Gold and jewellery studded ornaments received as gifts weighing 1034.68 gm valued at Rs.33,49,259. Total assessed value of loss is Rs. 59,32,200. The Complainants claimed the said amount from the Appellants/OP Bank along with compensation, by issuing a legal notice. As no effective response or resolution was provided by the Bank, the Complainants filed a Consumer Complaint before the learned State Commission.

4. On being issued notice, the OPs field their written version wherein it was contended that OP-1 is a body corporate constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, with Central Office at Chandermukhi, Nariman Point, Mumbai-400021, and carries on banking business through its various branches including the Bagdogra Branch at Main Road, Bagdogra-734014. OP-2 to 4 are employees of OP-1. OP-4 received the notice and complaint with annexures and was duly authorised by OP-1 to 3 to represent them in this matter. The OPs denied every allegation in the complaint, except those which are matters of record, and contended that the complaint is false, vexatious, misconceived, and an abuse of process of law. The OPs contended that the Complainants applied for a locker on 13.02.1992, pursuant to which Locker No. 21 (Class-A) was allotted to them on a yearly lease basis under the Memorandum of Letting of Safe Deposit Locker, which continued from 1992 to 2016 with automatic renewal upon payment of rent. A burglary occurred in the midnight of 4th /5th May 2016 at the Bagdogra Branch, which the branch staff discovered on the morning of 05.05.2016, and an FIR (Bagdogra P.S. Case No. 96/2016 dated 05.05.2016) was promptly lodged. The Complainants were informed of the incident on 07.05.2016 and requested to verify the locker. The OPs denied any negligence, security lapses, and asserted that all procedures prescribed by the Reserve Bank of India were duly followed. The investigation by the State Police is still pending and any allegation of deficiency during the pendency of such investigation is premature and untenable. The OPs also disputed the Complainants' claim that they discovered the alleged absence of burglar alarms or fire alarms, and questioned as to how the Complainants obtained photographs of the crime scene without authorisation, which amounted to interference with the investigation attracting Section 201 IPC. As per OPs, one Sri Hari Roy mentioned by the Complainants, was only an outsourced Recovery Assistant permitted to assist due to familiarity with the local area, and no adverse inference can be drawn. The Complainants, who enjoyed the locker facility for 24 years without objection, raised allegations about security only after the incident, which is untenable. Any negligence alleged is beyond the jurisdiction of consumer fora to adjudicate. OPs relied on Atul Mehra & Anr. vs. Bank of Maharashtra (AIR 2003 PH 570) and the recent clarification of the Reserve Bank of India, which hold that banks are not liable for theft from a locker. The OPs thus contended that the complaint is frivolous, filed with an ulterior motive for wrongful monetary gain, devoid of any prima facie case, and sought the same to be dismissed with heavy costs and sought appropriate action under Section 201 IPC for tampering with the crime scene as alleged against the Complainants.

5. The learned State Commission vide order dated 16.03.2020 partly allowed the complaint with the following directions:

                          "Ordered

                          that the Complaint be and the same stands allowed in part. The OP Bank is hereby directed to make payment of Rs.59,49,300/- only being the value of the jewellery kept for the locker No. 21 of the Bagdogra branch of the O.P. No.1 to the Complainant within 45 days from the date of this order.

                          It is also directed to pay to the Complainant a compensation amounting to Rs.1,50,000/- within the above mentioned deadline of 45 days from this order, failing which, simple interest @ 9% p.a. shall accrue to the decretal amounts from the date of default till the entire amount is fully realized."

6. Being aggrieved by the State Commission order dated 16.03.2020, the Appellants/OPs filed this Appeal seeking:

                   "i) Set aside Order dated 16.03.2020 passed by the Hon'ble State Commission, West Bengal arising out of the Complaint Case No.CC/300/2017 and

                   ii) Allow the First Appeal filed by the Appellant against Order dated 16.03.2020 passed by the Hon'ble State Commission, West Bengal arising out of the Complaint Case No.CC/300/2017; and

                   iii) Pass such other/any appropriate order as may be deemed just and necessary in the facts and circumstances of the case."

7. In the grounds of the instant appeal, the Appellants have mainly contended the following:

                   A. The impugned order is contrary to the express Locker Hiring Agreement terms, under which their relationship was clearly that of Lessor and Lessee, and not Banker and Customer. Clauses 13 & 14 unambiguously define this relationship, which were accepted by the Complainant for 25 years, and never objected/challenged. A lessor has no liability for goods of the lessee; hence the impugned order is contrary to settled law.

                   B. The State Commission failed to consider or apply its mind to the binding contractual clauses which clearly governed the status, obligations, and liabilities of the parties.

                   C. The State Commission had no jurisdiction to rewrite or alter the terms of the contract, particularly when the Complainants neither challenged the validity of the agreement nor sought any declaration for setting aside its terms. Without which, the Commission could not impose liability contrary to the contract. D. The Commission erred in awarding compensation despite admitted facts showing that (i) the Respondents voluntarily accepted the locker conditions for over 25 years, (ii) maintained lockers only with OPs despite having accounts in other banks, and (iii) they never complained about security arrangements. There was thus no basis to impute deficiency or negligence.

                   E. The Appellant, as a lessor, was not providing any "service" for consideration within the meaning of the Consumer Protection Act. The relationship was purely a rental arrangement, not a service contract, and no deficiency can arise therefrom. Even assuming applicability of service law, the Complainant failed to prove any negligence and had no knowledge of alleging deficiencies in security arrangements.

                   F. The State Commission ignored that the Complainants allegations were unsupported, speculative and contradictory to own admissions. No negligence was pleaded or proved.

                   G. The State Commission failed to consider the Appellant's affidavit specifically denying all allegations of non-compliance with safety norms and asserting adherence to RBI guidelines. H. The State Commission ignored their detailed, unrebutted evidence establishing robust security measures in construction of the vault, doors, CCTV, alarms, armed guard, periodic security review, and RBI-compliant procedures. The burglary occurred with gas-cutting equipment, beyond their control. And no expert evidence to the contrary was led by the Complainant. Therefore, liability cannot be fastened on the OP merely on the basis of unproven allegations.

                   I. Exclusive possession of the alleged articles was never given to the OPs. Mere locker hiring creates no bailment relationship. Thus, the demand of the Complainants for payment of value is untenable. In any case, the Complainants failed to lead credible evidence to prove what articles were actually kept in the locker at the time of burglary. The self-serving list and valuation report cannot constitute proof of entrustment or quantity/value of contents. Further, under Section 152 of the Contract Act, even if bailment was presumed, the bailee is not liable if reasonable care under Section 151 was taken.

                   J. There is no evidence to show that the robbery occurred due to negligence or non-compliance with RBI/IBA guidelines. Mere occurrence of burglary cannot lead to a presumption of negligence. No expert evidence was produced to show any deviation from prescribed specifications. Hence, the impugned order is unsustainable.

8. The learned counsel for the Appellants/OPs reiterated the contentions made in their written version and the grounds advanced in the Appeal and argued that the present Appeal is preferred by the OP Public Sector Bank as the State Commission has erroneously fastened an unjustified and unwarranted liability upon it to pay the alleged value of jewelry purportedly kept by the Respondents in the locker, in complete disregard of the evidence on record and the settled legal position. The State Commission failed to address the foundational issue whether the relationship between a locker hirer and the Bank constitutes "bailment" under Section 148 of the Indian Contract Act, 1872, upon mere hiring of a locker, notwithstanding the absence of any independent evidence establishing entrustment, quantity, quality or value of the alleged items. He asserted that, without proof of entrustment, no bailment arises and consequently no liability can be imposed on the Bank. The impugned order was based on an incorrect presumption by mechanically applying the bailment principles even though the Complainants neither disclosed the contents or value of the articles to the Bank at any time during the 25-year period, while they retained the key and could freely add, remove or alter the contents, This negates the very essential requirement of exclusive possession for bailment. The liability for damages could arise only if the Bank was aware of the contents and value and had exclusive possession, which was never the case. While the Complainant produced a list of articles for the first time after the burglary, the claims remain completely unverified, specifically denied by the OP in reply dated 25.11.2016, and unsupported by any evidence. Their reliance on Amitabha Dasgupta Vs. United Bank of India & Ors., Civil Appeal No.3966 of 2010, decided on 19.02.2021 is misplaced as that case involved undisputed wrongful opening of a locker by bank officials. Moreover, the Hon'ble Supreme Court therein had held that questions of entrustment and possession require civil-court adjudication, and not consumer fora. As regards the allegation of negligence, the Complainant led no evidence whatsoever, and their allegations stood demolished in the cross-examination where they admitted having no source of information regarding alleged security lapses, no personal knowledge of night security, no inspection of CCTV functioning, and no objections raised over two decades of locker operation, while the OPs detailed evidence of robust security measures including RBI-compliant vault construction, multi-layer steel doors, CCTV surveillance at eight points, burglary alarm systems, and deployment of an armed guard remained unchallenged. No expert evidence was produced by the Complainant regarding alleged deficiencies in the construction of the strong room or lockers which itself renders the findings perverse. In any case, the dispute arose out of a criminal incident which is pending before the competent criminal court, which renders the complaint not maintainable before the Consumer Forum. The Complainant's reliance on the Reserve Bank of India vide Circular No.DOR.LEG.REC/ 40/09.07.005/2021-22 dated 18.08.2021 is also equally misplaced, as the liability prescribed therein (100 times annual rent) is subject to negligence being established, which is not the present case. He argued that the impugned order is unsustainable both in facts and law.

9. On the other hand, the learned counsel for the Complainant reiterated the facts stated in the complaint and contended that the fundamental issue for adjudication before this Commission is whether the OP Bank can legitimately claim that it bears no liability for the total value of the valuables/jewellery stolen from the safe deposit locker hired by the complainants, particularly when the Locker Agreement dated 13.02.1992 neither excludes nor limits such liability. It was argued that the Appellant/Bank's reliance on Clauses 13 and 14 of the said Agreement is wholly misconceived, since Clause 13 states that the safe deposit vault is a separate department and cannot absolve the Bank of liability when the vault forms an integral part of the Bank premises and such internal departmental classifications are irrelevant to customers. Clause 14 of the Agreement describing the relationship as that of Lessor and Lessee is equally untenable because the locker always remains in the Bank's custody and no transfer of possession, which is essential for a valid lease under the Transfer of Property Act, 1882, ever occurs. The learned counsel further argued that even under a true lease, if damage occurs due to the lessor's negligence in maintaining the leased premises with requisite levels of supervision and security, the lessor remains wholly liable. He relied on the order of this Commission dated 21.05.2015 in RP No. 1291 of 2015 (Pune Zila Madhyawarti Sahakari Bank Ltd. & Ors. v. Ashok Bayaji Ghogare), which held banks liable for the full value of stolen locker contents where documentary proof and credible deposition established the complainant's claim, and also observed that in Indian households, jewellery is often received as gifts on various occasions and may not always be supported by purchase documents. He further relied on the judgment of the Hon'ble Supreme Court in Amitabha Dasgupta v. United Bank of India (Civil Appeal No. 3996 of 2010, decided on 19.02.2021), wherein it was emphatically held that banking institutions cannot evade liability for locker operations, as customers availing such services are entirely dependent on banks for the security of their assets. He further vehemently argued that the Appellant/Bank's conduct demonstrated gross negligence and deficiency in service, as evident from (i) non-functional CCTV cameras save one, which too was disabled within seconds of the burglars' entry, implying insider involvement; (ii) absence of night security personnel and inadequate security arrangements at entry points; (iii) unsecured windows with weak iron bars through which burglars entered; (iv) selective targeting of specific lockers and the suspicious involvement of one Hari Roy, a non-employee who was inexplicably allowed access to bank transactions and even the locker area; (v) the fact that the cash vault remained untouched, indicating a planned attack facilitated by insiders; and (vi) absence of burglar/theft or fire alarms in the premises. It was asserted that in view of such glaring lapses, the deficiency in service is unquestionable and the Bank is fully liable for the entire loss, as rightly held by the State Commission. The Complainants had also got the value of the items which were secured in the locker, which were stolen, duly assessed and determined through a Chartered Engineer, Valuator, Loss Assessor and an Advocate, and such valuation is corroborated by documentary evidence filed with the complaint and supported by deposition. Whereas, the Appellant/Bank failed to produce these documents before this Commission despite specific directions dated 25.05.2022. He also relied on Reserve Bank of India Circular No.DOR.LEG.REC/40/09.07.2005/2021-22 dated 18.08.2021 as the liability prescribed therein (100 times annual rent) is subject to negligence being established. He, therefore, asserted that the valuation accepted by the State Commission is correct and calls for no interference.

10. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned counsels for both the parties.

11. The main issues in the present case are whether the OP Bank was deficient in adequately securing the locker allotted to the Complainant? If so, what is the liability of OP Bank with respect to the deficiency in service as well as the loss sustained by the Complainant?

12. It is undisputed that Complainant No.1, is a businessman with multiple bank accounts, and maintained one locker, Locker No. 21 at OP-4 branch for storing family jewellery and valuables. On 05.05.2016, he was informed that 16 lockers, including his, at OP Bank were broken open during a burglary earlier that morning. He rushed to the Bank and took stock of the situation. The main allegation of the Complainants is lax in security by the OP Bank that enabled the theft. A complaint was lodged at Bagdogra Police Station (GDE No.227 dated 06.05.2016) and OP-4 also filed FIR No.96/2016. The Complainants submitted a list of stolen items and also got the property placed in the locker valued by an expert valuator Sri Sameer Banerjee, who assessed the total loss as Rs.59,32,200 wherein 837.931 Grams is gold jewellery worth Rs.25,82,941 personally owned and 1034.68 Grams gold gifted jewellery worth Rs.33,49,259. After issuing a legal notice and receiving no satisfactory response from the OP Bank, the Complainants filed a complaint before the State Commission. On the other hand, OPs denied the allegations, asserting that OP-1 is a statutory bank and OP- 2 to 4 are employees, and OP-4 is authorised to represent them. The Complainants held Locker No. 21 since 1992, under a yearly lease. The burglary of 4th/5th May 2016 was promptly reported to the police, and the Complainants were asked to inspect their locker. OPs denied negligence and claimed compliance with all RBI-mandated security protocols and contended that the investigation is still pending, and the allegations of deficiency are premature. They questioned taking crime scene photos and unauthorised access by the Complainant. The OPs argued that the Complainants raised security concerns only after 24 years of peaceful use, and that banks are not liable for locker thefts, relying on Atul Mehra v. Bank of Maharashtra and RBI clarifications (Supra). They contended that the complaint is frivolous, motivated by monetary gain, and be dismissed with costs.

13. It is undisputed that the said burglary occurred in the Bank's premises and the Complainants' evidence points to multiple security lapses. The Bank failed to rebut allegations regarding the condition of the vault, CCTV functionality, presence of night guards, or adequacy of alarms. The Bank's defence that it had no knowledge of the locker contents and therefore no bailment existed is unpersuasive in light of Amitabha Dasgupta (Supra), which clarifies that the Bank's liability is not dependent on disclosure of locker contents but on the Bank's duty to maintain security of its premises and locker facility. However, while the RBI guidelines impose certain affirmative obligations on banks, the main issue in that case was wrt operation of lockers by Banks and the Allottees and liabilities. In the present case, the matter pertains to Bank's failure to ensure adequate security which constitutes deficiency in service. The expert valuation filed by the Complainants, although unilateral, was not effectively challenged by OP.

14. In view of the foregoing, the Appellant Bank failed to resist the allegation that it had taken all reasonable precautions and complied with mandatory security standards. It is an admitted position that the Bank did not provide for any guard to secure the premises during nonworking hours. The burglary undisputedly occurred during non-working hours and the OP Bank failed to secure the premises. The alleged loss of goods clearly did not result from any force majeure conditions, but from the negligence of the Bank in taking requisite security measures, resulting in burglary during non-working hours without much resistance. The assertions that the Complainant never contended security issues in the past, is entirely untenable. It is entirely the role and responsibility of OP bank to take requisite steps to protect the assets held by it in trust against such offences. OP Bank clearly failed in the same and thus gross deficiency in service is manifest.

15. Under the Consumer Protection Act, the claim for compensation needs to be reasonably established by the Complainant. As regards the compensation claimed, the evidence adduced by the Complainants included an expert valuation of the stolen items which were reported immediately by the Complainant after the incident. This is, however, unilateral with limited scope for the OP Bank to rebut. While it may be a fact that the Complainant possessed the articles listed in the expert valuation, it cannot be concluded that these articles have in fact been kept in the OP Bank locker in question. It is also undisputed that, such keeping of the items/ articles in the Bank locker is personal to the Complainants and the Bank has limited role in monitoring these actions, other than facilitating the operation of the locker. Therefore, in the present case, while the breaking open of the locker by the burglars due to the Bank's failure to secure its premises is established, the quantum of the loss suffered by the Complainants needs independent determination.

16. As regards determination of compensation in such cases, the Hon'ble Supreme Court in "Amitabha Dasgupta Vs. United Bank of India & Ors Civil Appeal No. 3966 of 2010" considered that in such cases where the valuables of the Complainants were stolen from Bank lockers, the Consumer Fora ought not to award the value of such stolen articles, which may not be properly assessed for lack of detailed evidence as might be led in Civil Courts, since the procedure to be followed in the Consumer Fora is summary in nature. The relevant observations of the Hon'ble Supreme Court are as below:

                   "8. As discussed supra, 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 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 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 by claiming ignorance of the contents of the lockers.."

17. In view of the foregoing, while the quantum of compensation liable to be paid by the OP for the loss suffered by the Complainants requires to be determined by a competent civil court, it is evident that the OP Bank is deficient in its service in failing to ensure adequate security of the Bank lockers allotted to the Complainant, which constitutes an inherent deficiency in service. Consequently, the Complainants who trusted the OP Bank suffered severe adverse consequences. Therefore, the order of learned State Commission in CC No.300 of 2017 dated 16.03.2020 is modified and, towards the deficiency in service on the part of OP Bank in securing the premises resulting in the burglary in question and the agony and harassment suffered, we direct the OP Bank to pay the Complainants Rs.5,00,000 as compensation. As regards the claim of the Complainants towards the actual loss suffered, the Complainants are at liberty to approach appropriate civil court. The Complainants may invoke the provisions of Section 14 of the Limitation Act, 1963 as regards the time spent in the present litigation.

18. With the above directions, the First Appeal No.627/2020 is disposed of.

19. Considering the nature, facts and circumstances of the case, the OP Bank is directed to pay Rs.1,00,000 as cost of litigation to the Complainants.

20. All pending Applications, if any, also stand disposed of accordingly.