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Petitioner: Mahmooda Tapal & another VS Respondent: Standard Chartered Bank (Pvt.) Ltd. & 5 others
Court Name: Sindh High Court Judge(s): Arshad Hussain Khan Title:Mahmooda Tapal & another vs Standard Chartered Bank (Pvt.) Ltd. & 5
others Case No.: Suit No. 1492 of 2011 Date of Judgment:2019-03-06 Reported As: PLD 2021 Sindh 28, 2019 SHC 76 Result: N/A Judgment Arshad Hussain Khan-J. The plaintif fs have filed the present suit for damages against the defendants with the following prayers: "A. Grant decree for damages in the amount of PKR 31.05 million, for loss suffered by the plaintif fs due to the missing valuables and cash due to the omission and commission as well as complicity and/or negligence of the defendants. B. Grant decree for damages in the amou nt of PKR 150 million for loss, trauma and mental agony suffered by the plaintif fs at the hands of the defendants. C. Costs and any other relief that this Hon'ble Court may deem as just and fair in the circumstances." 2. The facts give rise to the filing of the present suit as averred in the plaint are that the plaintif fs established in Pak Rupee and US Dollar personal accounts, and obtained safe deposit locker bearing No. 427 at the defendant-bank, Hill Park Branch, Karachi and have continued to manage such accounts and safe deposit locker with the defendants' bank for more than one decade. Further averred that on 15.8.201 1 the plaintiffs visited the branch to operate their accounts as well as locker bearing No.427[subject locker], where the plaintif fs noted that the officer dealing with the branch vault had been replaced and a new officer was on duty and before entering into the vault the plaintif fs were asked to hurriedly sign a form which they did so without reading to the contents of the same on the assurance that it is merely a procedural form to improve customer service. However , later on, it came to the plaintif fs? notice that the document, which was made to sign on 15.8.201 1, was a form for limitation of liability . It is also averred that when the plaintif fs opened the safe deposit box out of the locker and opened it they were shocked to see that it was empty of all contents. All the plaintif fs? valuable jewellery and cash were missing and they were left holding an empty locker box and pouc h in a state of shock and disbelief. The plaintif fs immediately raised alarm upon which Mr. Zaigham Sayani, the Regional Manager South of the defendants informed the plaintif fs that there
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had been a theft which was discovered by the defendants in April 2011 and the plaintif fs were amongst seven-high- net worth individuals who had been targeted. The plaintif fs were assured that the culprits have been apprehended and the defendants vigorously pursuing the prosecution. The plaintif fs were also assured that once a list of the missing valuable and details of cash missing from the locker is provided to the defendants, their losses will be fully compensated. The plaintif fs were also told that the Standard Charter having international repute would stand by its name and repute in honoring the losses of the plaintif fs. On 17.8.201 1, the plaintif fs submitted a formal letter of complaint and provided the defendants with a detailed list of valuable jewellery and cash which were missing from the locker . It is also averred that although many jewellery and valuable items had great sentimental value for the plaintif fs and could never be compensated in terms of money , however , the plaintif fs were assured that at least financial losses suffered by the plaintif fs will be made good by the defendants. The plaintif fs were initially assured by the defendants that the compensation approval is under process, however , later on the plaintif fs were told that the bank in the process of compiling details of the case and would send them a detailed reply once the investigation is completed. Thereafter , in a meeting held on 21.9.201 1 a complete turnaround was made by the same officers of the defendants who had earlier assured the plaintif fs for full compe nsation. In the said meeting the plaintif fs were told that they would not be compensated except to the extent of meager sum supposedly covered under the aforementioned retrospective limitation of liability form which the plaintif fs were made to sign on 15.8.201 1. The plaintif fs having not agreed with such proposal, sent a legal notice on 5.10.201 1 and in respect thereof an interim response received on 12.10.201 1, the counsel for the plaintif fs against the said response replied the letter dated 18.10.201 1, thereafter , defendants No.1 and 6 subsequently issued a continuation of interim response making incorrect and baseless denial. It is also averred that the defendants are directly or indirectly responsible for (i) gross dereliction of fiduciary duty, (ii) conspiracy to suppress and cover up the officers? personal culpability in the theft in the Locker , (iii) failure to maintain due care and safegua rds expected by a multinational bank (iv) deceit and criminal negligence; and (v) causing financial loss, trauma, and mental agony to the plaintif fs. 3. Upon summons of the present case, the defendants filed their statement wherein while raising preliminary legal objections regarding misjoinder of defendants No.2, 3, 4 and 5, denied the allegations leveled in the plaint. It is stated in the written statement that the plaintiffs have a safe deposit lockers No. 427 at the Hill Park Branch of defendant No.1. The said locker was rented/leased to the plaintiffs pursuant to a locker rental application dated 03.09.1999. The second locker rental application was signed by the plaintiffs on 15.8.2011. It has been further stated that both the lockers rental applications contain rules and regulations which are printed on the reverse of the applications. It was denied that signatures of the plaintiffs were obtained surreptitiously for mala fide reasons with the intention of limitation of liability. It has also been stated that the contents of the locker were confidential to the defendants and the allegations that the locker when opened was found empty of all its contents including valuable jewellery and cash are denied. It has been denied that any assurance was extended to the plaintiffs that they would be compensated for missing valuables and cash by the defendants being an international bank. It has been further stated that in the meeting held on 21.9.2011, the plaintiffs were informed that at the highest liability , if any, of defendant No.1 was to the extent of the insurance of the contents of the locker in accordance with the directives of State Bank of Pakistan for which purpose, the plaintiffs would have to establish their claim and the matter would be referred to the insurer for payment of claim by the insurer based on the size of the locker and this amount would be paid over to the plaintif fs. It is also denied that the defendants are liable to pay any amount to the plaintif fs towards damages in respect of alleged valuables missing from the locker and/or towards loss, trauma and mental agony . It has been further stated that defendant No.1 is one of the Pakista n's reputed bank which renders banking, financial as well as other facilities in Pakistan with which its customers are satisfied and accordingly defendant No.1 developed and maintained a large client and valued customer based in Pakistan. It is also stated that the terms and conditions pertaining to the opening and operating of safe deposit locker are signed by the customers while general terms and conditions are also sent to the customers in writing by post and specific contention relating to insurance was also published in the local newspapers in English and Urdu on 14.1.201 1. It is also stated that the locker's rental application and the rules and regulations pertaining to safe deposit locker which the plaintif fs signed voluntarily was reques ted by defendant No.1 as a matter of course as customers generally sign
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such documents only on their visits to the Bank for operation of their lockers. It is also stated that one locker holder/lessee who had visited the premises of defendant No.1 [Bank] frequently during April 2011 was apprehended when complaints were received from the locker holders/lessees with regard to valuables which were found missing from their lockers. The concerned locker holder/lessee was apprehended by the officials of defendant No.1 and an FIR was lodged. It has also been stated that under clause 21 of the Locker Rules and Regulations / terms and conditions defen dant No.1 is only required to obtain insurance cover based on the size of the locker and not on the basis of contents. If any loss is sustained for the reason specified in clause 21, the loss is required to be assessed by the Surveyors / Bank authorities in the first instant while insurance arranged by the Bank / Defendant No.1 at its own cost shall be up to the maximum amount ment ioned in clause 21 against each category of locker . This clause was introduced on the basis of State Bank of Pakis tan BPRD Circular No.5 of 2007 which required holder/lessee based on the size of the plaintif fs' locker , which in the plaintif fs' case is Rs. One million. Further stated that since liability arises under S.B.P . BPRD Circular No. 5 of 2007, defendant No.1 would at the highest be liable for payment in full and final settlement subject to plaintif fs? establishing loss from their locker leased/rented from the defendant. In the last, the defendants sought dismissal of the suit. 4. On 10.09.2013 learned counsel for the plaintif fs, in view of para 14 (xviii) of the written statement filed on behalf of defendants No.1 and 6, did not oppose the application filed by the defendants for deleting the names of defendants No. 2, 3, 4 and 5 from the array of the defendants in the instant case. Consequently , the names of defendants No.2, 3, 4 and 5 were deleted from the present case. 5. On 24.09.2013 by consent of the parties, following issues were settled: 1) Whether the plaintif fs leased/rented and maintained locker No.427 at Shahrae Faisal Branch of the defendant No.1 and on what terms and conditions? 2) Whether the defendants owed the plaintif fs any duty of protection and safety in respect of the contents of the plaintif fs locker No.427 and whether there was any breach of such duty in April 201 1? 3) What is the effect, if any, of the limitation of liability from (Annexure D/1 & D/2 of the written statement) which the plaintif fs signed? 4) What is the ef fect of State Bank of Pakistan BPRD Circular No.5 of 2007? 5) Whether the plaintif fs suffered any financial loss or damage due to the allege d loss of contents of the locker No.427 and whether the defendants are liable to compensate the plaintif fs? If so to what extent? 6) Whether the plaintif fs suffered any mental hurt/trauma or agony at the hands of the defendants officers? If so to what extent? 7) Whether the plaintif fs are entitled to receive compensation and damages in the sum of Rs.181.05 Million or any other amount from the defendants and if so, from which defendant(s)? 8) What should the decree be? And the Commissioner was appointed for recording of evidence in the matter who after completing the evidence returned commission vide his report dated 14.04.2018. 6. The plaintif fs in support of their stance in the case examined plaintif f No.2 as PW-1, who deposed for himself as well as attorney of plaintif f No.1 and produced the following documents:- 01Affidavit-in-evidence Exh.P-5/1. 02Half yearly report of defendant No.1 from January to June, 201 1.Exh.P-5/2. 03Locker Rental Application dated 15.8.2011.Exh.P-5/3. 04Letter dated 17.08.201 1. Exh.P-5/4 05List of valuable lost Mark as O/1. 06Original 52 receipts of jewellery O/2.
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07Letter dated 22.10.2013 sent through e- mail by the plaintif f No.2Exh.P-5/5 08Letter dated 23.10.2013 sent through e- mail by plaintif f No.2.Exh.P-5/6. 09Letter dated 05.09.201 1 to the plaintif f No.2 from defendant.Exh. P-5/7 10Legal notice dated 05.10.201 1 on behalf of the Plaintif fs.Exh.P-5/8. 11Reply legal notice dated 12.10.201 1 on behalf of defendants.Exh.P-5/9 12Reply dated 18.10.2011 on behalf of plaintif fs to defendants? reply legal notice.Exh.P-5/10. 13Reply Letter dated 21.10.201 1 of M/s. Liaquat Merchant Associates advocates addressed to M/s Fakhruddin G. Ebrahim Company advocates dated 18.10.201 1.Exh.P-5/11.
7. On completion of the plaintif fs? evidence, the defendants in support of their stance in the case examined four (4) witnesses namely; (i) Abdul Rehman Choudhry as their witness DW-1, who produ ced his affidavit-in-evidence as Exh.D-1/1. Application for allotment of a locker dated 30.9.1999 as marked O/1, Rent application form dated 15.8.201 1 as marked O/2, Safe deposit locker access card as marked O/3, cutting of newspaper daily Dawn dated 14.01.201 1 as marked O/4, copy of newspaper daily Jung dated 14.01.201 1 as marked O/5 and confidential interim investigation report dated 10.05.201 1 as marked O/6, (ii) Junaid Shah as DW-2, (iii) Jehangir Adil Qazi as DW-3 who produced written statement as Exh.D-3/1, and (iv) Mohsin Ali Nathani as DW-4. These witnesses were duly cross examined by the learned counsel for the plaintif fs. 8. Learned counsel for the plaintif fs during the course of his arguments while reiterating the stance taken in the case has argued that the plaintif fs in the year 1999, keeping in view the defendants' global brand promise, proclaimed values of trust and commitm ent to stakeholders/customers as one of the most reliable international Bank in Pakistan, opened Pak rupee and US Dollar bank accounts at defendant No.1's Hill Park Branch, Karachi and obtained safe deposit locker having No.427 thereat. Ever since the said safe deposit locker is obtained, the plaintif fs have continued to maintain the same. The plaintif fs' idea of having safe deposit locker in defendant bank was to keep their valuables properly protected. It is also argued that the defendant got signed another locker rental application from the plaintif fs on 15.8.201 1, on the date when they visited the Bank and discovered that the contents of their locker were missing. It is also argued that though the subject locker rental application dated 15.8.201 1, contains a limitation of liability term and the bank is placing heavily reliance on the same, however the said rental application has no value in the eyes of law as firstly; the said application was got signed hurriedly without providing any proper opportunity to the plaintif fs to read and understand the terms and conditions mentioned therein and secondly; the said rental application was also not exhibited in evidence due to the objections raised by the plaintif fs' counsel at the time evidence. Even otherwise, the terms and conditions do not assist the Bank in avoiding the claim of the plaintif f's. It is also argued that the duty of protection and safety owed by the defendants to the plaintif f is evident from the language of SBP Circular No. 5 of 2007, which, inter alia, provides that the bank/DFIs shall ensure that safe deposit locker rooms in their respective branches are adequately secured from all sides and the security arrangements in place are fool proof and meet the security standards developed by each bank/DFI. It is also argued that Circular No.5 of 2007 also relies on an earlier Circular No.27 of 2004, which notes that a number of incidents involving breaking of lockers/attempts to break/open locker have
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occurred which have serious repercussions on the banking business besides having direct bearing on public confidence in the banking system, thus, it is imperative that banks should improve the standards for the safety and security of the lockers. Further argued that in the given fact, the plaintiffs had rented locker from the defendant Bank for valuable consideration and keeping in view the language of the SBP circulars relied on by the Bank itself, there is no doubt that the defendant owed a duty of protection and safety in relation to the plaintiff's locker and that the same stood breached. It is also argued that the most elementary obligations of Bank in respect of protection and safety towards its locker holder stood flagrantly violated when it's own report acknowledged that the locking mechanism on the lockers were defective and its own ex-employee (Mr. Kashif) was involved in the theft. It is also argued that the theft at the lockers of the Hill Park Branch was discovered by the defendant bank in the month of April 2011, when certain other locker holders complained and the alleged perpetrator Mr. Kashif was apprehended by the defendant bank and many valuables recovered from that person. However, the defendant bank chose to suppress the incident and even failed to inform the other locker holders at the said branch. The plaintiffs only discovered the theft in their locker when they visited the branch on 15.8.2011. It is also argued that the plaintiffs' witness in his testimony had given the names of Branch officials namely (i) Mr. Zaigham Sayani, (ii) (iii) Mr. Ahmed Nizam and (iv) Mr. Aman ur Rehman, the plaintiffs had met after the theft and the said officers had assured them of full compensation on furnishing of details of valuables. However, the defendants in their evidence did not produce any of them to controvert the stand of the plaintiffs and instead the defendant's bank chose to produce witnesses none of whom ever met with the plaintiffs. It is also argued that plaintiff No.1, being a senior citizen and widow, led her evidence through plaintiff No. 2, her son and joint locker holder, who testified not only on his own account but also as attorney of his mother and therefore it cannot be said to be a case of no evidence on behalf of the plaintiff No.1. It is argued that plaintiffs' witness in his evidence produced 52 original receipts of purchases of jewellery over a period of two decades. He was vigorously cross examined that such receipts were not in fact receipts of purchase and payments but estimates, yet he withstood such challenge and remained resolute that these were evidence of purchase. Further argued that it is not uncommon in our society that receipts, especially from jewellers are issued in a less formal manner. Furthermore, the plaintiffs? witness also admitted that the valuables in the locker were not mentioned in their wealth statement. However, failure to do so, could at best be a taxation issue, but not does in itself dilute plaintiffs evidence that such valuables were in the locker, especially, when such testimony was not challenged in the cross-examination. Therefore, the loss, as per Ex P- 5/4 stands proved. Even defendants own witnesses did not deny the plaintiffs? claim when the former President of the Bank, DW 4 stated in evidence that "I am not aware if the Bank had wrongly denied the claims of the plaintiffs." It is also argued that the plaintiffs? letter of claim dated 17.8.18, Exhibit P 5/4 with details of valuables was submitted within 48 hours of the incident at the instructions of the Bank. Yet, the Bank did not deny or challenge the same at any point whatsoever. The plaintiffs? witness testified that the valuables (jewellery and cash) were in the locker. He testified that they provided the detailed list of valuable jewellery and cash missing from the locker and Bank Officers including Mr. Zaigham Sayani assured them of full compensation. Yet, such testimony was not challenged and was not cross examined on this point at all. Therefore, the case of the plaintiffs? as to valuables in their locker and loss suffered on account of theft stands proved. Whereas the material witnesses of the defendant bank who dealt with the plaintiffs were withheld and the presumption in respect of the same is inescapable. Lastly argued that plaintiffs have successfully proved their case through evidence hence entitled to the reliefs claimed in the case and the plaintiffs are entitled to decree as prayed. Learned counsel in support of his stance in the case has placed reliance on the following case law: (i) 2018 CLD 1313 Mst. SOBIA BANO v . EFU LIFE ASSURANCE L TD. Through Chairman and another . (ii) 2018 CLD 1300 STATE LIFE INSURANCE CORPORA TION OF PAKIST AN through Chairman and another v. MUZAF AR ALI. 9. Conversely, learned counsel for the defendants in his argument has urged that plaintiffs only recorded the evidence of plaintiff No.2 whereas plaintiff No.1 did not appear in the witness box and give evidence in support of the case. It is also urged that the plaintiffs have failed to establish their claim in the case either through oral or documentary evidence as most of the documents in respect purchase of the jewellery produced by the
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plaintiffs? witness were either estimates or valuations while only 4-5 invoices relate to alleged purchase but even these invoices were not produced by the shop-keeper/author and were un-signed and as such the plaintiffs are not entitled to the reliefs claimed in the present case. It is also urged that the plaintiffs? claim as holder of a locker on rental basis is misconceived as only the locker was given on rent to the plaintiffs with no attached or any other liability with regard to contents. Further urged that the contents of a locker are confidential/secret to the locker holder only and no other person and as such the defendants are not liable to compensate the plaintiffs alleged loss of missing contents of the locker. It is also urged that the plaintiffs have also failed to establish through evidence with regard to their claim for damages or loss in the sum of Rs.150 million as set out in the plaint and such the plaintiffs are not entitled to any relief on this account as well. It is also urged that based on the investigation carried out by Mr. Abdur Rehman Chaudhary as a Fraud Investigation Officer at defendant No.1, the claim of other locker holders was examined on merits and the description of jewellery given by them to the said Officer was compared with the items of jewellery/valuables recovered from the accused Kashif and on the basis of this matching identification whatever jewellery was recovered from the accused Kashif and from a jewellery shop in Karachi was handed over to the respective locker holders and the matter was amicably settled. Whereas there was nothing found from the accused Kashif or the jewellery shop which matched the description given by the plaintiff and accordingly no item of jewellery / valuables could be returned to the plaintiff and the plaintiffs were advised that their claim could only be considered under the State Bank of Pakistan circular for insurance of locker holders which provides for a maximum insurance cover of Rupees One (1) million. The defendant No.1 was always ready and willing to extend such insurance cover for the benefit of the plaintiffs subject to submission of necessary claim forms. It is also urged that the defendants substantiated their stance in the case through their evidence and in this regard the evidence of their witnesses had been consistent. Lastly, argued that the plaintiffs have completely failed to make out any case against the defendants in relation to their valuables/jewellery allegedly placed in her locker No.427 and no judgment and decree is liable to be passed in favour of the plaintiffs based only on the bare statement of plaintiff No.2. The documents produced by the plaintiffs witness (plaintiff No.2) do not constitute a basis for grant of any judgment and decree for the amount claimed in the suit and as such the suit against defendants is also liable to be dismissed with costs. Learned counsel in support of his arguments has placed reliance on the case law: (i) PLD 1994 Karachi 492 MUHAMMAD LUQMAN v . BASHIR AHMED. (ii) 1996 MLD 1819 MUHAMMAD ASHRAF v . SHAH NOOR KHAN and another . (iii) 2005 MLD 646 Mst. SAFIA v. Mst. BIBI and 14 others. (iv) PLD 1976 SC 767 SHAH NA WAZ and another v . NAWAB KHAN. (v) PLD 1979 SC 890 ABDUL AHAD and others v . ROSHAN DIN and 36 others. (vi) 1982 CLC 954 Syed ABDUl RASHEED v . Mst. TAJUNNISA. (vii) 2001 MLD 2007 Mst. ALAM BIBI v . AKBAR ALI and others. (viii) 1998 SCMR 96 MUHAMMAD IBRAHIM through legal heirs and others v. Mst. BASRI through legal heirs and others. (ix) PLD 2005 Karachi 585 Mst. MOHSINA SAEED TAUNI v . MUHAMMAD ASIF and others. (x) 2006 SCMR 470 MAQBOOL AHMED v . PAKIST AN AGRICUL TURAL and others. (xi) 2010 CLD 338 M.C.B. BANK LTD. through Authorized representative v. STATE BANK OF PAKIST AN through Governor and 2 others. (xii) 1988 CLC 2023 Mst. MUMT AZ BEGUM and others v . ABDUR RASHID and others. 10. I have given due consideration to the arguments advanced by the learned counsel for the parities, minutely perused the material/evidence available on the record, the applicable laws and the case law cited at the bar. My findings on the issues framed in this…
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