A few years back, as a result of a recently provided information under the Right to Information Act, 2005, 19 public sector banks reported that they have no liability legally for any kind of goods stored in their lockers. It was contended by the 19 public sector banks that the relationship between the banks and the customer was that of lessor and lessee making the bank the lessee and the customer becomes the lessor. Their contention goes even further saying that it is the customer who is responsible for the valuables that they store in those banks. This was received, very naturally, with shock and dismay to say the least. Usually, whenever a customer hired a locker he/she signs an agreement which says the following: 

“As per the safe deposit memorandum of hiring locker, the bank will not be responsible for any loss or damage of the contents kept in the safe deposit vault as a result of any act of war or civil disorder or theft or burglary and the contents will be kept by the hirer at his or her sole risk and responsibility.” 

This is the reason why banks, more often than not, suggest customers insure their goods stored in their bank lockers. Since, banks don’t keep records of the things that are kept in their lockers and have, therefore, no idea what is being stored in their lockers, they possess no functional mechanism to compensate their customers if they suffer any loss such as damage to those goods. This is the current condition despite the banks charging a fee for this service. In metro cities, these banks can charge from an amount of Rs. 3000 to an amount of over Rs. 6000, depending on the size of the locker. This is very similar to what cartels do. The public banks have formed a very similar body that cartels possess, over the service of providing lockers with no compensation in case of damaged goods. A cartel according to the law, is defined under Section 2(c) of the Competition Act, 2002 as: 

2(c). “cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services.”

This cartelisation is taking place because the banks are refusing to maintain the dynamics of their relationship with the customers following the principle laid down in Contract law which contains the concept of bailment. “A “bailment” is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the “bailor”. The person to whom they are delivered is called the “bailee”.” The public sector banks have entered an agreement to follow the practice of not paying any sort of compensation to their customers in case of a loss or damage, thus, forcing the customer to hire a locker in any one of the respondent banks with no option left otherwise. It is a very anti-competitive agreement. The public sector banks make it mandatory for the customers to sign a one-sided contract which is not negotiable for the customer’s side and therefore, escape the liability of paying compensation for damage/loss.