MP High Court directs Post Office to process claims of customers duped by employees using fake passbooks

The petitions concerned losses allegedly suffered by customers who paid money at the Post Office Bina Branch to open term-deposit accounts or purchase savings certificates.

Post Office employees issued passbooks, but the accounts were not opened and the passbooks were later found to be forged or fabricated.

The employees involved were prosecuted and convicted.

The Department rejected the petitioners’ claims, reasoning that they had dealt with an employee who was not posted at the branch at the relevant time rather than approaching the authorised counter.

The petitioners challenged those decisions under Article 226 of the Constitution, relying on the Department’s circular dated 27 May 2021 on claims arising from loss and fraud.

1. Whether the Department could reject the petitioners’ claims because they had dealt with a Post Office employee who was not posted at the branch at the relevant time.

2. Whether the Department was required to consider the claims under its circular dated 27 May 2021 where accounts had not been opened and fake passbooks had been issued.

The Court considered Article 226 of the Constitution, under which the petitioners sought judicial review of the Department’s decisions, and the Department of Post Office circular dated 27 May 2021, which provides a procedure for handling claims arising from loss and fraud, including cases where accounts were not opened or fake passbooks were issued.

The Court applied the principle that customers who act bona fide in dealing with persons they encounter as Post Office employees within Post Office premises should not be denied consideration of their claims merely because the employees were not posted at that branch, a fact the customers neither knew nor were expected to know.

The Court found that the transactions took place at the Post Office and involved persons who were undisputedly Department employees; the petitioners had no means of knowing that those employees were not posted at the branch.

Because the petitioners acted bona fide and the cases involved accounts not opened and fake passbooks issued—circumstances addressed by the circular—the Department was required to consider their claims under that circular.

The employees’ posting status therefore did not justify rejecting the claims without applying the prescribed procedure.

It directed that, if the petitioners submitted claim application forms in the format appended to the 27 May 2021 circular within 30 working days, the competent authority must process their claims within a further 90 days.

The petitioners were also held entitled to applicable interest on the fixed deposits in accordance with law.