Munmun Kaur
Published On: 10 February, 2022 at 13:12 IST
The Supreme Court on February 07 observed that a post office can be held vicariously liable for the acts of its employees done during the course of their employment.
The observation was made in the Case of Pradeep Kumar And Another v. Postmaster General And Others.
A three-Judge Bench of Justices L Nageswara Rao, Sanjiv Khanna and BR Gavai was hearing an Appeal against the Order of the National Consumer Disputes Redressal Commission (NCDRC) which had dismissed the Complaint filed against the post-office authorities and held that authorities cannot be held vicariously liable for the fraud committed by their employee with respect to encashment of Kisan Vikas Patras (KVPs).
Facts of the Case were that the Appellants purchased KVPs with the combined face value on maturity of ₹32.60 lakh. In February 2000, the Appellants approached the Postmaster, Head Post Office Chowk, Lucknow, with the request to transfer the KVPs to the Chowk Post Office, Lucknow who informed the Appellant that the transfer process would be time-consuming and would require several visits to the post office.
The Postmaster recommended the services of an agent Rukhsana who was associated with the post office and was appointed by the State of Uttar Pradesh. As per Rukhsana’s instructions, the Appellants signed original KVPs and handed them over with the Monthly Income Scheme passbook.
After learning that Rukhsana cheated many investors and that the KVPs were already cashed, the Appellants moved the NCDRC seeking payment of ₹ 25,54,000/- along with interest @ 18% per annum from the Respondents i.e. post office and Rukhsana. NCDRC did not find involvement of the officer of the post office in the Case.
The Supreme Court observed
Such acts of bank/post office employees being within their course of employment will give a right to the appellants to legally proceed for injury, as this is their only remedy against the post office.
Supreme Court relied on the 1978 Judgment in State Bank of India (Successor to the Imperial Bank of India) v. Smt. Shyama Devi, wherein the Supreme Court took a unanimous view that for the employer to be liable, it is not enough that the employment afforded the servant or agent an opportunity of committing the crime, but what is relevant is whether the crime, in the form of fraud, etc., was perpetrated by the servant/employee during the course of his employment.
The Apex Court noted that employees, as individuals, are capable of being dishonest and committing acts of fraud or wrongs themselves or in collusion with others and when such acts are done during the course of the employment, they are binding on the bank/post office at the instance of the person who is damnified by the fraud and wrongful acts of the officers of the bank/post office.
Dismissing the consumer Complaint, the Supreme Court set aside the Order of NCDRC.