Bapulal Premchand v. Nath Bank Ltd

Facts

• Bapulal deposited securities with Nath Bank for safe custody
• The securities were lost due to the bank's inadequate security arrangements
• The bank denied liability arguing it was not an insurer of goods

Issue

1. Whether a bank in possession of customer's securities for safe custody is a bailee liable for loss due to negligence.

Held

• The Court held that the bank was a bailee under S.148 of the Contract Act. Under S.151, the bailee must take care that a man of ordinary prudence would take of his own goods. The bank's inadequate security constituted negligence. S.152 (bailee not liable without negligence) requires the bank to prove absence of negligence. The bank failed this burden.

Ratio Decidendi

A bank accepting articles for safe custody is a bailee. It must exercise the standard of care under S.151 (ordinary prudence). Loss due to inadequate security is negligence; the bank bears liability.