Hiring A Locker Does Not Create Bailment Between Hirer & Bank: Jharkhand HC Quashes Jewelry Theft Case Against Bank Employees

The Jharkhand High Court held that hiring a locker in a Bank does not establish a bailment relationship between the Locker Hirer and the Bank.

The case involved a dispute over the alleged theft of jewellery from a locker rented by a customer at a bank. The Trial Court took cognizance against the bank employees of the offences under Sections 380, 409, and 34 of the Indian Penal Code, 1860 (IPC).

The Court emphasized that a transaction can be considered a bailment only if it adheres to the provisions outlined in Section 148 of the Indian Contract Act, 1872 (ICA). The Court noted the need for compliance with specific legal conditions to establish a bailment relationship in such banking arrangements.

The Bench of Justice Sanjay Kumar Dwivedi observed, “In view of the above, it appears that the locker is the nature of agreement, in view of that the hiring agreement cannot be equated with the bailment…In view of that hiring of a locker is a transaction to be distinct in nature from a transaction that would create the relationship of landlord and tenant”.

Advocate Rajesh Kumar appeared for the Petitioners, Additional Public Prosecutors Bishambhar Shastri, Ruby Pandey and Shiv Shankar Kumar appeared for the State and Advocate Pawan Kumar Pathak appeared for the Second Opposite Party.

The petitioners, officers of Punjab National Bank (PNB), face charges related to the alleged theft of gold articles from a locker at the bank. They contend that there is no evidence against them and seek dismissal of the case. The complainant, the locker's owner, claimed that he discovered the gold articles missing upon opening his locker. The Police took no action and therefore, the complainant filed a protest petition, leading the court to take cognizance of the matter and issue summons to the petitioners.

The Petitioners approached the High Court seeking to quash the criminal proceedings including the order taking cognizance of the offences under various sections of the IPC. They contended that the order was based on a complaint that did not disclose any cognizable offence and that the Magistrate did not have jurisdiction to take cognizance of the matter.

The Court also noted that the jewellery was missing from the locker of the Bank. However, the Court noted that the bank was not liable for the jewellery loss because the relationship between the bank and the locker hirer was not a bailment.

The Court held that the hiring of a locker is a distinct transaction from a landlord-tenant relationship and that the bank has custody and possession of the locker, even though the locker hirer can only operate it in the presence of the bank. This is because the bank has a master key that can be used to open the locker at any time. The hirer can only access the locker during specified banking hours. The Bench noted that a banker can open the locker with a master key at any time, while the hirer can only access the locker during specified banking hours.

“The Banker can always open the locker with a master key, the hirer of the locker is not in a position to open the locker without the assistance of the Bank. The hirer can only access the locker only specified banking hour. The Banker has no such limitation. If such a situation is there, the transaction of bailment could only be established if the provisions of Section 148 of the Indian Contract Act are complied”, the Bench observed.

The Court noted that there is an ongoing civil suit linked to the matter, and unless criminality is proven, prolonging the proceedings would amount to a misuse of the legal system. The Bench underscored that simultaneous civil and criminal cases are acceptable only when criminality is clearly demonstrated.

Accordingly, the Court allowed the Petitions and set aside the order taking cognizance.

Cause Title: Mahesh Minz v The State of Jharkhand

Click here to read/download Order