Kathmandu School of Law Review

P-ISSN : 2091-2110, E-ISSN : 2773-8159, DOI : 10.46985, Publisher : Kathmandu School of Law, Nepal
Annual flagship journal of Kathmandu School of Law, Nepal

Volume 13, Issue 1, 2024
Articles

Questioning the ‘Safe Deposit Locker Services’ of Class-A Banks Vis-à-vis the International Jurisprudence on Contracts and Consumerism

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  • Sankalpa Koirala
Sankalpa Koirala
Associate at Learned and Lawyers (L&L), Kathmandu
DOI: https://doi.org/10.46985/kslr.v13i1.2235

Published 2025-01-17

Keywords

  • Banks, Locker Service, Bailment, Contracts, Consumerism.

How to Cite

Koirala, S. (2025). Questioning the ‘Safe Deposit Locker Services’ of Class-A Banks Vis-à-vis the International Jurisprudence on Contracts and Consumerism. Kathmandu School of Law Review, 13(1), 66–86. https://doi.org/10.46985/kslr.v13i1.2235

Copyright (c) 2025 Sankalpa Koirala

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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Abstract

The service of safe deposit lockers, as provided by the Banks, are sought for the purpose of safekeeping of the articles deposited. Such service creates a risk on the part of the Banks regarding any loss or damage of the articles stored. Therefore, for the purpose of risk aversion, the Banks themselves classify the nature of the Locker Service Agreements (LSAs) and include clauses therein which limit the Bank's liabilities in violation of the jurisprudence on law of contract and consumerism. The article therefore analyses the contractual relationship arising from the LSAs and the usage of the clauses therein by taking into account consumer welfare. For the ease of understanding, the article, based on the Bank's own classification, classifies the LSAs drafted by all twenty Nepalese Class-A Banks into four types: (a) contract of lease; (b) contract of license; (c) LSAs that do not expressly classify themselves; and (d) contract of bailment. The article deals with the concept of lease, license, and bailment, and determines the valid nature of the LSAs. The article also criticizes the loopholes and contradictory clauses used by the Banks in their LSAs. Taking into account the burden of proof on the customer-plaintiff, during an event of loss or damage to the deposited article, the article also suggests important changes with regards to the practice surrounding locker services. The article makes large reference to the jurisprudence developed in India, the U.K., and the U.S.A.

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References

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  55. 55. Amitabha (n 1), However, it was still decided that the locker service agreement would not be a contract of bailment.
  56. 56. Mahesh Minz (n 39); Atul Mehra (n 36);
  57. 57. Amitabha (n 1).
  58. 58. Mahendra Singh (n 40); Punjab National Bank (n 47).
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  80. 80. Ibid, schedule 1, s. 2(1).
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  82. 82. Himalayan Bank (n 24); BESCOM (n 24).
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  84. 84. Krishi Samagri (n 25); Mahakali Sinchai Pariyojana (n 26).
  85. 85. Bhandari (n. 83).
  86. 86. Ibid.
  87. 87. Shayara Banu v. Aadhar Traders, NKP 2064 (2008), volume 12, Decision no. 7907, para.10.; Ericsson AB v. Nepal Telecom, Supreme Court, 2072 (2016), Writ no. 69-WO-0298.
  88. 88. Amitabha (n 1).
  89. 89. Pawan Raj Bhandari (n 83); See also, Kush Kalra, 'Should Banks be Held Responsible for Loss of Valuables Kept In Lockers?' LiveLaw, 2017, available at https://www.livelaw.in/banks-held-responsible-loss-valuables-kept-lockers/, accessed on 16 December 2024.
  90. 90. MP Ram Mohan & Anmol Jain, 'Exclusion Clauses Under the Indian Contract Law: A Need to Account for Unreasonableness' NUJS Law Review, volume 13:4, 2020, p. 2.
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  94. 94. Mahendra Kumar Chandulal v. C.B.I., Gujarat High Court, 1984, (1984)1GLR237; Punjab National Bank (n 47).
  95. 95. National Civil Code (n 3), s. 505 (1) (d).
  96. 96. J. Sheikh Mohamed v. The British India Steam Navigation Co. Ltd., Madras High Court, 1908, 1IND. CAS.977.
  97. 97. Jellicoe and Ors. v. British Indian Steam Navigation Company, Indian Law Reports, Calcutta, (1884) ILR 10CAL489.
  98. 98. Shayara Banu (n 87); Ericsson AB (n 87).
  99. 99. City Union Bank Ltd. v. C. Thangarajan, Madras High Court, 2003, 46 SCL 237 (Mad.).
  100. 100. Indian Contract Act, 1872, s. 171.
  101. 101. Union Bank of India v. K.V. Vennugopalan and Ors., Kerela High Court, 1990, AIR 1990 Kerela 223, para. 8.
  102. 102. National Civil Code (n 3), chp. 8.
  103. 103. National Civil Code (n 3), s. 581 (2).
  104. 104. Unified Directive (n 2).
  105. 105. Ibid.
  106. 106. Kalra (n 89).
  107. 107. Shayara Banu (n 87); Ericsson AB (n 87).

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