Postal department directed to process claims of savers duped by employees using fake passbooks

The petitioners alleged that they had entrusted money to employees of the Post Office to open term-deposit accounts or purchase National Savings Certificates.

The employees issued passbooks, but the accounts were never opened and the passbooks were forged.

The employees were prosecuted and convicted.

The Department rejected the petitioners’ claims, reasoning that the employees involved were not posted at the relevant branch and that the petitioners had not approached the authorised counter employees.

The petitioners challenged those decisions under Article 226 and relied on the Department’s Circular dated 27 May 2021, which set out procedures for claims involving loss and fraud, including cases where accounts were not opened or fake passbooks issued.

Whether the Department could reject the petitioners’ claims because they dealt with Post Office employees who were not posted at the relevant branch.

Whether the claims were required to be considered under the Department’s Circular dated 27 May 2021, given that accounts were not opened and fake passbooks were issued.

The petitions were brought under Article 226 of the Constitution of India, which empowers the High Court to issue appropriate writs and directions.

The Court applied the Department of Post Office Circular dated 27 May 2021, which provides a procedure for handling claims arising from loss and fraud, including claims where no account was opened or a fake passbook was issued.

The Court reasoned that customers acting bona fide were not expected to know that an employee present at the Post Office was not posted at that branch; the Department was therefore required to consider their claims under the Circular.

The Court found that the petitioners had dealt with persons who were undisputedly Post Office employees and had acted bona fide.

Their lack of knowledge that those employees were not posted at the relevant branch could not, in the Court’s view, justify rejecting the claims.

Because the accounts had not been opened and fake passbooks had been issued—circumstances expressly covered by the Circular—the Department was required to assess the claims in accordance with its prescribed procedure.

The competent authority must process the claims within a further 90 days.

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