UNION OF INDIA vs GEORGE MATHEW

REVISION Petition No. 2059 of 2009 has been filed against the order dpated 26.3.2009, passed by Maharashtra State Consumer Disputes Redressal Commission, Mumbai (short, ''''State Commission '''') in First Appeal No.1499 of 2008.

THE brief facts of the case as gleaned from the order of District Consumer Disputes Redressal Forum, Central Mumbai (short, District Forum) are that Mr. T.M.Dedhia and his wife Vasanti T.Dedhia - Opponent nos.9 and 10/Respondent nos.3 and 4 respectively were the Authorized Agents of National Savings Scheme and Small Savings Scheme since more than 20 years. The Complainant/Respondent no.1 had made investments in various schemes of the Post Office through the said Agents. In the month of March 1999, the respondent no.1 handed over to the said Authorized Agents a crossed cheque No.91102 dated 31.3.1999 of Rs.1,00,000/ - drawn on Corporation Bank, Shivaji Park Branch issued in favour of the Post Master, Mahim Head Office for investment in Post Office Monthly Income Scheme along with necessary filled -up forms.

THE respondent no.1 also handed over to the said Agents another crossed cheque vide No.91109 dated 28.8.1999 of Rs.1,00,000/ - drawn on the same Bank and issued in favour of the Post Master, Mahim Head Office for submitting the same to the Mahim Post Office. The agents told to the respondent no.1 that whenever the passbooks would ready, they would be given to him. The respondent no.1 trusted the said Agents as he had dealt with them for the past several years.

THE agents instead of depositing the said cheques in the Mahim Post Office together with the forms signed by the respondent no.1 under the said Post Office Monthly Income Scheme, deposited the said cheque No.91102 in the saving account of one Vasanti Dedhia and Kusum P.Joshi, respondent nos.4 and 5 respectively and the amount was withdrawn immediately. The Agent deposited the amount of cheque No.91109 dated 28.8.1999 in the saving account of Mrs.Vanita T.Dedhia and Shri T.M.Dedhia, respondent nos.6 and 3 respectively. This amount was also withdrawn immediately. The respondent no.1 was not aware of this fact. The respondent no.1 had also handed over two crossed Account Payee cheques of Rs.50,000/ - each vide cheque No.55322 and 55323 both dated 1.12.1999 issued in favour of Post Master, Mumbai Central Post Office to the Agents i.e., respondent nos.3 and 4 for investing that amount in the Post Office Monthly Income Scheme in Mumbai Central Post Office alongwith filled up and signed necessary forms for submission to Mumbai Central Post Office. But the Agents deposited the cheque No.55322 in the Saving Bank Account No.2654358 in Jt. Account of opposite party no.13 (now dead) and opposite party no.14/respondent no.7 and the cheque No.55323 was deposited in the Savings Account of Ms.Beena S.Bharadwaj and Mrs.S.D.Bharadwaj and the amount was withdrawn immediately. It is the contention of the respondent no.1 that none of these persons in whose accounts the cheques were deposited were known to him and he was not aware of this fact. The respondent no.1 when he made enquiry with the Agents about the Monthly Income Passbooks, the Agents told that he would give the same to the respondent no.1 after they were issued by the Post Office. According to the respondent no.1, respondent nos.3 and 4 have forged and fabricated the documents in collusion with the said Post Masters and mis -appropriated the money while acting in the capacity of the Agents. Respondent nos.3 and 4 were appointed by the respondent no.2 as Authorized Agents for saving schemes. The petitioner nos.1 and 2 in collusion with their Agents diverted the amount of crossed Account Payee cheques issued in favour of the Post Masters to another account with the said Post Offices and thereby petitioners committed a fraud upon the respondent no.1 in conspiracy with their agents and caused loss to the respondent no.1.

ON enquiry with the Post Master, Mahim Head Office by letter dated 2.9.2000, the respondent no.1 came to know that in whose account the cheques were deposited and when the same were withdrawn. Similarly, on his making enquiry by letter dated 9.9.2000 with the Post Master, Mumbai Central H.O. about two cheques of Rs.50,000/ - each, the respondent no.1 came to know the names of the persons who had encashed these cheques. The respondent no.1, therefore, sent letter to the Post Master, Mumbai Central H.O. who in turn sent reply to that letter.

THE respondent no.1 by his letter dated 4.9.2000 addressed to the Regional Director, National Savings - respondent no.2 requested him to restore his loss. The respondent no.1 sent reminder dated 22.1.2001 to respondent no.2 requesting him to look into the matter. But the respondent no.2 informed the respondent no.1 that any transaction of the respondent no.1 with T.M.Dedhia was in his personal capacity only. The respondent no.1 sent notice dated 21.4.2001 through his Advocate to the other petitioners and called them to pay respondent no.1 a sum of Rs.3,00,000/ - being the total amount of the respective cheques, failing which the respondent no.1 would be compelled to file a suit and/or other proceedings against the petitioners. This notice was issued under Section 80 of the Code of Civil Procedure, 1908. By letter dated 27.9.2001 addressed to respondent no.1 ''s advocate, respondent no.2 falsely contended that the respondent no.1 had given money to Shri T.M.Dedhia in his personal capacity and not in the capacity of National Savings Agent.

THE respondent no.1 prayed for amount of Rs.3,00,000/ - along with interest @ 18% p.a. The respondent no.1 asked for Rs.15,000/ - towards mental agony and Rs.15,000/ - towards the cost of the complaint.

THE petitioner nos.1 to 5 and 8 resisted the claim by filing written statement and denied all the allegations made by the respondent no.1. According to the petitioners, the complaint is time barred, more causes of action have been clubbed together. An appropriate Forum for the respondent no.1 would have been a Criminal Court as well as Civil Court as he is victim of some ones conspiracy, mischief. According to these respondents, the cheques in question were drawn in favour of Post Master, Mahim H.O. and Sr. Post Master, Mumbai Central H.O. by the respondent no.1 but the accounts in which the sum was to be deposited had not mentioned on the cheques. Therefore, possibilities that the respondent no.3 as SAS agent might have deceived the respondent no.1 by depositing the cheques in his Saving Bank Account and withdrawn the amount subsequently. Therefore, Department was not responsible.

THESE respondents further stated that in terms of their records as maintained by their Mumbai Central H.O. no such forms i.e. forms for opening a MIS Account were ever presented at the Post Office along with cheque No.55322 of Rs.50,000/ -. The said cheque was presented for depositing in Saving Bank Account No.2654358 standing in the joint name of Ms. Beena Bhardwaj and respondent no.7 on 3.12.1999 with Pay -in -Slip (duly signed by the petitioner) for that purpose. The cheque No.55323 was deposited in Saving Bank Account No.2654359 standing in the joint name of Ms. Beena Bhardwaj and respondent no.7 along with Pay -in -Slip (unsigned by presenter). So, the respondent no.1 had handed over to his Agent requisite forms/slip filled in properly is not believable. The postal services cannot be held liable for the carelessness and negligence of the respondent no.1 who kept silent for a long time without insisting the Agent for the MIS passbooks.

THE petitioners admit that respondent no.3 was appointed by respondent no.2 as SAS Agent of the application vide No.7 (g) SAS/19 -80/28679 dated 14.2.2011. His agency was terminated on 16.11.2000. Similarly, respondent no.4 was appointed by respondent no.2 as SAS Agent vide No.7 (a) MPKBY/82/4778 dated 22.7.1985 and her agency was terminated by respondent no.2 on 16.11.2000. There was nothing suspicious at the time of transaction. Therefore, the postal staff had not acted in collusion with the Agents to defraud the respondent no.1. On investigation and noticing that the respondent no.1 was cheated by the agent Shri Dedhia, a police complaint was lodged on 9.12.2000 at Mahim Police Station, Mumbai. These petitioners submitted that after receipt of notice of this case through the Forum, they contacted the Bank Authorities and obtained Xerox copies of said cheques. The cheques clearly show that while depositing the said cheques, the respondent no.1 did not mention that the cheques are meant for opening a new account under MIS or account in which said cheques to be credit.

THE petitioners further stated that the respondent no.1 has not tendered the cheques himself on the counter or to the concerned Post Masters on the dates he claimed to have done nor given any instructions to the concerned Sr.Post Masters. Therefore, postal service is not liable to pay any compensation or cost to the respondent no.1. On the above various grounds, the petitioners prays for dismissal of the complaint.

THE Regional Director of National Savings Organization i.e. respondent no.2 resisted the claim by filing its written statement. It is submitted by the respondent no.2 that the National Savings Organization is working under the administrative control of the Ministry of Finance, Department of Revenue, Govt. of India through its network spread over the length and breadth of the nation, entrusted with organizing and administering various saving schemes. According to the petitioners, the complaint is time barred. These are similar contentions of respondent no.2 as of petitioner nos.1, 5 and 8 regarding the complaint is time barred, clubbing of many causes of action and the respondent no.1 is not a consumer. According to the petitioners, the respondent no.1 could not show any material on record to fasten the NSO except a bare statement that Mr. and Mrs.Dedhia i.e. respondent nos.3 and 4 are NSO ''s agents. The transaction was entered into by the Agents in their private/personal capacities. Hence, the complaint be dismissed.

ACCORDING to the petitioners, the District Forum has no jurisdiction to entertain the complaint filed by complainant/respondent no.1. Respondent no.2 states that there are about 10833 National Savings Agents working under the Standardized Agency Systems of Government of India, Ministry of Finance in the Mumbai Region. As per this scheme against prescribed receipt and as per their authorization agents are authorized to collect cash/cheques from the investors for depositing in various schemes of National Savings available at Post Offices. Every agent has an authority letter containing his photograph and signature besides date of validity of agency. The authority letter contains instructions saying that agents have to issue the receipt to investors and after depositing money at Post Office, returns passbook/Saving Certificate to the investor and obtain signature of investor on the said receipt in token of having received the passbook/certificates as per rules. For this work, agents are paid commission at the prescribed rates. In the present case, neither respondent no.3 nor 4 have acted in the capacity of agent(s) of the NSO nor the respondent no.1 has treated them as their authorized agents in as much as no prescribed receipts seem to have been issued by respondent nos.3 and 4 to the respondent no.1 nor the same was taken by the respondent no.1 in the capacity of their investor to claim the protection available to an investor. It shows that the total transactions mentioned in the complaint were made in absolute private individuals capacity of the parties inter se the agents and the respondent no.1. The respondent no.1 ropes the Governmental Agent Appointing Authority which cannot be allowed when he himself behaves foolishly and negligently.

THE petitioners stated that when the respondent no.1 was advised by respondent no.2 to produce certain receipts to evident the transaction to be bonafide, he failed and the presumption created by the NSO ''s letter dated 14.8.2001 works as estoppels against him as far as NSO is concerned. The respondent no.1 did not rest on this letter of petitioner and sent legal notice and the same was replied to by respondent no.2. Respondent no.7 resisted the claim by filing written statement. Respondent no.7 stated that respondent nos.3 and 4 also cheated him in the similar manner as that of the petitioner and grabbed the amount of cheques issued by his wife given to these Agents for opening RD accounts with Mumbai Central Office. Because of this shock of losing money Rs.75,000/ - his wife expired on 8.2.1999 and thereafter, his daughter expired on 25.6.2001. According to the petitioners, he was not associated with respondent nos.3 and 4 in their acts of fraud alleged in the complaint and therefore, prays for dismissal of the complaint against him with cost.

RESPONDENT no.1 in person and learned advocate had appeared for petitioner nos.1 to 5 and 8 and also respondent nos.3 and 4 were ex -parte before the District Forum. No one appeared for respondent no.7.

DISTRICT Forum, after hearing the counsels and going through the record allowed the complaint. In the order they observed as follows; 30. Moreover, there is documentary evidence supporting the allegations of the complainant about the fraud by Agents i.e. opponent nos.9 and 10 and the Postal Authority. The Postal Authority has produced on record Xerox copy of cheques in question. These cheques clearly show that they were drawn on Corporation Bank wherein the respondent no.1 has account. They were account payee cheques issued in favour of Post Master of Mahim Head Office and Mumbai Central Head Office. There are endorsements on the back side of each cheque which disclosed that the concerned Post Offices sent these cheques through GPO, Mumbai to RBI for clearance and all the four cheques were cleared. The Bank ''s statement of the complainant of Corporation Bank shows that the amount of these cheques was debited in the account of the complainant. After clearance of these cheques, the amount ought to have been deposited in the account of the concerned Post Master as the cheques were issued in favour of the Post Master. But instead of the amount was deposited in the Saving Bank Account of third parties i.e. opponent nos.9, 10,11, 12, 13 and 14. There were endorsements on the back side of each cheque which read as follows: Judgement_115_Ncdrc_20141.htm Below these endorsements, there is stamp and signature of the Asstt. Post Master of the concerned Post Office. Now the question is how the Asstt. Post Master made these endorsements and on what basis? The Postal Authorities did not produce on record the pay -in -slip to show that the presenter of the cheque had given instructions in pay -in -slip to deposit the amount of these cheques in the SB A/c mentioned on the back side of the cheques. From the following circumstances, the Post Master/Asstt.Post Master/Postal Staff ought to have suspected about these cheques and ought to have kept the amount of cheques in suspense account and ought to have called the drawer of the cheques before depositing this amount in the SB A/c of the 3rd parties. a.A/c payee cheques were issued in favour of the Post Master. b.According to the Postal Authority, no forms about any scheme of the Postal Department were submitted along with the cheques. c.If the amount was instructed to be deposited in the SB A/c of 3rd parties and no forms of any scheme were submitted, why the cheques were issued in favour of the Post Masters ? d.Cheques were not presented by the drawer who issued the cheques. e.According to the petitioners nos.1 to 5 and 8, pay -in -slip given along with the cheque No.55323 dated 1.12.1999 of Rs.50,000/ - was not signed even by the presenter. Then, on whose instructions, the amount was deposited in the account of third party ? f.Endorsement on cheque No.091102 was doubtful. 31. If the cheques were presented alongwith endorsements already thereon, not a single endorsement bears the signature of the person who made that endorsement. So, the Postal Authority should not have deposited the amount of these cheques in SB A/c of 3rd parties as the cheques were Account Payee in favour of the Post Master. 32. Even when the above circumstances were strongly doubtful, the concerned Postal Authority did not suspect about the cheques and alleged pay -in -slip and blindly deposited the amount in the SB A/c of 3rd parties. This conduct of the Postal Authority clearly indicates that there must have been collusion between the Postal Authority and the Agent - opponent nos.9 and 10 to defraud the complainant. 33. Opponent no.3 produced on record parawise comments in respect of the complaint. In para 9 of these comments, it is mentioned ''''it is however, admitted that while accepting the cheques the postal staff failed to follow the procedure laid down for acceptance of cheques tendered by the third party without having accounts in the Post Office or without giving specific instructions. '''' Thus, the Postal Authority has admitted that the postal staff failed in their duty by not following the procedure laid down for acceptance of the cheques tendered by opponent no.9. 34. Considering all the circumstances and evidence on record, we are of the opinion that there was deficiency in service on the part of the Agent i.e. opponent nos.9 and 10 and the postal staff of Mumbai Central H.O. and Mahim H.O. The Agents and the postal authorities committed fraud on the respondent no.1 in collusion with each other. Unless, there was collusion between the postal staff and the Agents, this fraud would not have been occurred. Therefore, opponent nos.1 and 2 and opponent nos.3 and 4 are liable to pay jointly and severally to make the good to the complainant. 35. Opponent no.3 is the Sr. Superintendent of Post Office. Opponent nos.1 and 2 are under the administrative control of opponent no.3 and in turn and opponent nos.4, 5 and 8 are his superior offices/controlling Ministry. Opponent no.7, the Regional Director of National Savings Organization is an Appointing Authority of Agents i.e. opponent nos.9 and 10. At the relevant time, opponent no.9 was working as SAS Agent since 1977. Opponent no.10 was appointed by opponent no.7 vide No.7 (A) MPKBY/82/4778 dated 22.7.1985 under Authority No. MPKBY Agency No.899 as seen from the written statement filed by opponent nos.1 to 5 and 8. Opponent nos.9 and 10 acted in the capacity of the Agents. The complainant handed over the cheques in question to opponent nos.9 and 10 as an Agents of the Postal Department. Opponent no.7 is entrusted with organizing and administering various schemes like PPF, RD CTD etc. floated from time to time by the Union Government through budget other Governmental measures to be implemented through Post Offices, Nationalized Banks and other Agents. So, opponent nos.3, 4, 5, 7 and 8 are also liable jointly and severally with opponent nos.1, 2, 9 and 10. 37. In view of the above discussion, we are of the view that the opponent nos.1, 5 and 7 to 10 are jointly and severally liable to make good the loss to the complainant. Hence, the following order ; ORDER ''''The complaint bearing No.CMDF/CC/12/2002 is allowed the following terms ; 1.Opponent nos.1 to 5 and opponent nos.7 to 10 are directed to pay to the complainant jointly and severally Rs.1,00,000/ - alongwith interest @ 6% p.a. from 6.12.1999, the date of clearing of the cheques No.055322 and No.055323 of Rs.50,000/ - each till the date of realization. 2.Opponent nos. 1 to 5 and opponent nos.7 to 10 are directed to pay to the complainant jointly and severally Rs.1,00,000/ - alongwith interest @ 6% p.a. from 3.4.1999, the date of clearing of the cheque No.091102 of Rs.1,00,000/ - till the date of realization. 3.Opponent nos.1 to 5 and opponent nos.7 to 10 are directed to pay to the complainant jointly and severally Rs.1,00,000/ - alongwith interest @ 6% p.a. from 2.9.1999, the date of clearing of the cheque No.091109 of Rs.1,00,000/ - till the date of realization. 4.Opponent nos.1 to 5 and opponent nos.7 to 10 are directed to pay to the complainant jointly and severally compensation of Rs.10,000/ - towards mental agony. 5.Opponent nos.1 to 5 and opponent nos.7 to 10 are directed to pay to the complainant jointly and severally Rs.3,000/ - towards cost of this complaint. '''' 24. Aggrieved by the order of the District Forum, the opposite party nos.1 to 5 and 8 filed an appeal before the State Commission. Vide their order dated 26.3.2009, State Commission, dismissed the appeal and passed the following order; The original complainant invested Rs.1 Lakh on 31/03/1999, another Rs.1 Lakh on 28/08/1999 and Rs.50,000/ - each on 01/12/1999 in Monthly Income Scheme of the Postal Department. All the deposit amounts were paid by cheques. The Postal Department had appointed Agent to collect deposit money. The complainant handed over all the cheques to the agents of Postal Department. The said Agent fraudulently encashed the cheques for himself. He did not deposit the money in the MIS Scheme. The Postal Department refused to pay anything to the depositor. Therefore, depositor filed consumer complaint. The District Consumer Forum directed the Postal Department to refund the money with interest @ 6% p.a. The correctness of this order is challenged by the Postal Department. The entire money was paid to the Agent appointed by the Postal Department. For the act of Agent, Principal is liable. The District Consumer Forum therefore rightly allowed the complaint and directed the Postal Department to refund the money with interest. Innocent depositor cannot visualize at the time of investment of money, that agent would play fraud in future. The Postal Department should have taken utmost care in appointing agents. Appointment of dishonest person as an agent is a serious misconduct of Postal Department. The question of contributory negligence does not arise. No interference is called. The order of the District Consumer Forum is perfectly legal and correct. In the result, we pass the following order : - -: ORDER : - 1. Appeal stands dismissed. 2. No order as to costs. 3. Misc. Appl. No.2111/2008, which is for stay stands disposed of. 4. Copies of the order be furnished to the parties. ''''

HENCE , the revision petition.

THE main grounds of the revision petition are that ; ·The learned fora below failed to appreciate that the facts of the consumer complaint revolve around several factors which need comprehensive, exhaustive and thorough legal examination of questions of law and that of facts. There were allegations of fraud, forgery and misrepresentation apart from non -compliance of rules and procedures. These issues have to be decided by a court of competent jurisdiction. These issues require great deal of evidence to be scrutinized. Voluminous evidence has to be recorded.

The learned fora below failed to appreciate that the whole complaint is based on an allegation that the agent has embezzled the cheque amount issued for allegedly opening of the MIS account and grabbed the same by misappropriation and also further committed criminal breach of trust. The law governing the Principal and agency is very clear in so far as liability of the respective parties and also the circumstances under which the principle of joint responsibility can be fixed. In the instant case, the learned fora below have erred in applying such principle in the situation governing the complaint, under reference. The petitioners herein cannot be held either jointly or severally liable for the acts of commission and omission committed by the agent outside the scope of agency. Certainly, the petitioners, who are the State would not have directed the agents to commit fraud, misrepresentation, forgery and such other and commission of any or all of them are solely resorted to by the agents themselves. Sec. 182 of the Indian Contract Act, dealing with the Principal and Agency relationship, clearly stipulates that only such person can be an agent who is employed to do any act for another or to represent others in dealing with the persons and anything done beyond would be at the sole liability of the agent. In the instant case the acts of agents are not during the course of agency and hence, they cannot bind the principal. 27. We have heard learned counsel for the petitioner and respondent as also carefully gone through the records

IT is an undisputed fact that four cheques were issued by respondent no.1 (as per the details given below) and handed over to respondent no.3 to be deposited under Post Office Monthly Income Scheme in the joint account of George Mathew and Mercy Mathew. The details are as follows; JUDGEMENT_115_NCDRC_20141.htm

AS per respondent no.1, he kept asking for the Passbook and did not receive the same. He then wrote a letter to Post Master, Mahim Head Office on 2.9.2000. In its reply dated 22.9.2000, Sr. Superintendent of Post Offices stated as follows ; ''''Mr. George Mathew A/3, Staff Quarters Catering College Veer Savarkar Marg Dadar, Mumbai - 400028 No. : WL -2/SB -63/2000 -01 dated at MBI - 14 the 22/09/2000 Sub : Complaint against Shri T.M.Dedhia S/S Agent Sir, Please refer to your complaint dated 2.9.2000 addressed to Post Master, H.O. Enquiries made in the above matter revealed that, your cheque No.91102 dated 3.4.1999 for Rs.1,00,000/ - was credited in Mahim H.O. SB A/c No.4475829 on 15.4.1999 hold in the joint name of Kusum P. Joshi and V.T.Dedhia and said amount was withdrawn on same day i.e. on 15.4.1999. Your another cheque No.91109 dated 3.9.1999 for Rs.1,00,000/ - was credited at Mahim Head Office on 9.9.1999 in SB Account No.4475853 hold in the joint name of Vanita A.Dedhia and Shri T.M. Dedhia. The amount of said cheque was withdrawn on 16.9.1999. As per your complaint, the above cheques were given to Shri T.M.Dedhia for opening MIS account in your name. However, Shri Dedhia instead of opening MIS account deposited both the cheques in the SB accounts jointly hold by Dedhia. You may lodge a police complaint in this matter. You may also approach Regional Director, National Savings, East and West Insurance Building, 55, Samachar Marg, Mumbai - 400023, who is licensing authority of said agent. Sr.Supdt. of Post Offices Mumbai City West Division Mumbai -400014 ''''

The petitioner then vide his letter dated 9.9.2000 wrote to the Post Master, Mumbai Central Head Office and received a reply dated 6.2.2001 from Sr. Superintendent of Post Offices, Mumbai, stated as follows ; ''''To, Mr. George Mathew A/3, Staff Quarters Catering College Veer Savarkar Marg Dadar, Mumbai - 400028 No.WLZ/SB -63 (B)/2000 -01 dated 6.2.2001 Sub : Complaint against Shri T.M. Dedhia Sir, This has with reference to yoru letter dated 9.12.2000 addressed to this office on above subject. In this connection, enquiry made with Sr.Post Master, Mumbai Central H.O. revealed that your cheque nos. 55322 and 55323 were credited in SB A/c No.2654358 and 2654359 respectively on 3.12.1999. The said cheques were cleared on 6.12.1999. Above said both the S.B.Accounts were opened in the name of Mrs. Sushiladevi S.Bhardwaj and Mr. Shaligram S.Bhardwaj was jointly and Ms. Beena S.Bhardwaj and Mr.S.D.Bhardwaj jointly respectively proceeds and said accounts have been withdrawn on 14.12.1999. In this regards further enquiry is under progress. Yours faithfully, Sr.Supdt. of Post Offices Mumbai ''''

BY these two letters, the petitioners had admitted the fact that the said cheques had been received by the Post Offices concerned and credited into accounts other than those of respondent no.1 and the amounts so deposited has been withdrawn.

AS advised by the petitioner no.4, the respondent no.1 addressed a letter to respondent no.2 vide its letter dated 4.9.2000. He sent a reminder on 22.1.2001 and received a reply on 14.8.2001 from the Regional Director, National Savings Mumbai Region, which reads as under ; ''''No.A -3/DEV/2000/3185 Dated : 14.8.2001 To, George Mathew A/3, Staff Quarters, Catering College, Veer Savarkar Marg, Dadar, Mumbai - 400028 SUB : Regarding complaint against Shri T.M.Dedhia, National Savings Agent. Sir/Madam, You are requested to send the receipt issued to you by Shri T.M.Dedhia (if any), in continuation of your complaint dated have not sent the same. In absence of the same, we will presume any transaction with Shri T.M.Dedhia with you was in personal capacity only. Yours faithfully, (Master Sajjad) Regional Director National Savings, Mumbai Region ''''

The response of respondent no.2 is not understood that as to how and why a transaction between respondent no.1 and respondent no.3 could be treated as ''''in personal capacity only '''', particularly in view of the fact that the respondent no.3 had been appointed as SAS Agent on 8.8.1997 and held a valid agency till 31.12.2000 and further vide their letter dated 11.8.1977, they had categorically informed the office of the Regional Director, National Savings, in their letter dated 11.8.1977 that respondent no.3 was attached to the Post Office in that region for sale of small savings securities. ''''Office of the Regional Director National Savings (Govt. of India) Bombay Region, Bombay, 4th Floor, East and West Ins. Bldg., 55, Apollo Street, Bombay Samachar Marg, Fort, Mumbai -400023 No.03/22/SAS/76 -77/5892 Dated: 11.8.1977 To, Sub Post Master, Shivaji Park P.O. Bombay Sub: SAS - Appointment of Auth. Agent for the sale of Small Savings Securities Sir, I send herewith certificate of Authority No.B -3032 dated 8.8.1977 issued in the name of Shri T.M.Dedhia who is attached to your Post Office for the sale of 7 -Year, H.S.C. II, III, IV and V Issue and 2, 3 and 5 - Year Post Offices Time Deposit Accounts and National Savings Annuity Certificates. Office Time Deposit Accounts and National Savings Annuity Certificates. Please acknowledge receipt. Yours faithfully, Regional Director, National Savings Bombay Region ''''

ON 14.2.2001, Regional Director, National Savings Organization, Govt. of India, Ministry of Finance vide their letter dated 14.2.2001 addressed to Ms.Abha Singh, Sr. Superintendent of Post Offices, Mumbai City West Division, Dadar, Mumbai, stated as under ; ''''D.O.No.A -3/DEV/2000/1061 14th Feb., 2001 Dear Madam, Please refer to your D.O. letter No.WE -2/SB -63/2000 dated 8.2.2001 regarding Shri T.M.Dedhia, SAS Agent. We have to inform that Shri T.M.Dedhia was appointed as SAS agent on 8.8.1977 under Agency No.B -3032. He has been getting renewals for his agency and the latest renewal was done on 12.2.2000. His agency was valid upto 31.12.2002. But on receiving complaints from the post office and other investors, his agency was terminated on 16.11.2000 and intimated to your office also. You were requested to instruct the concerned post office issuing receipt books to agents to inform us the number of used/partially used/unused receipt books. You have informed that the Mumbai Central, Head Post Office has issued three receipt books of Rs.5,000/ - denomination on 14.2.2000, 26.2.2000 and 4.3.2000 resp. As per information received through our Departmental Inquiry Officer, Shri T.M.Dedhia is missing since 25.8.2000 according to letter submitted by Advocate, Shri Hasmukh V. Shah on 8.11.2000 in connection with clarifying the position of his client Smt. V.T.Dedhia, wife of Shri T.M.Dedhia. You are again requested to instruct the concerned post offices to furnish details of receipt books issued and used by Shri T.M.Dedhia as the post office has been paying commission to agents on the basis of monthly submission of commission claims upto April, 2000, thereafter instant payment of commission to agents has been started, so we hope that the information must be available with the post office issuing receipt books to agents. Yours sincerely, Nassir Sajjad) Ms.Abha Singh Sr. Supdt. of Post Offices Mumbai City West Division Dadar, Mumbai - 400014 ''''

IT is quite apparent from the letters exchanged between respondent no.1, the petitioners and respondent no.2 that respondent no.3 held a valid agency to act as an Agent for the sale of small savings securities. It is also very clear from the letter of Regional Director, National Savings Organization that it is the Post Office which has been using the services of respondent no.3 by paying commission to him for the business generated for the Post Offices.

THE petitioners cannot escape their liability today by stating that respondent no.3 was appointed by respondent no.2. Further, they also cannot escape their liability for deficiency of service and negligence which lead to misappropriation and fraud as cheque Nos.091102 and 091109 were made out to Post Master, Mahim Head Office and cheque Nos.055322 and 055323 were made out to Post Master, Mumbai Central Head Office. It is under the signature of the Asstt. Post Masters in each case that these cheques were credited to savings account to other than respondent no.1 and allowed to be withdrawn also by persons other than respondent no.1. Once, a cheque is received by the Post Master, he de facto becomes the custodian of the amount of the money so entrusted to him. In case of doubt, he should have checked with respondent no.1 either through letter or on telephone. This is more so as it was mentioned that there were numerous complaints regarding respondent no.3 on the basis of which his agency was thereafter cancelled. Though, the petitioners had informed to the respondent no.1 that an enquiry was conducted the results of the enquiry have not been brought on record.

RESPONDENT no.2 also cannot escape its liability as respondent no.3 was appointed by respondent no.2 and as a Principal, he is certainly also responsible for the act of the Agent and the State Government Organization is squarely liable for fraud and misappropriation of investor ''s money and the custom of the Agent appointed by one of his Authorized Officers. We have gone through the citation which was placed on file by the petitioner in the case of ''''Post Master, Dargamitta H.P.O., Nellore Vs. Raja Prameellamma (Ms.) (1998) 9 SCC 706 '''', the facts are not applicable to the present case.

WE have also gone through the citation placed on file titled ''''The State of Punjab & Anr. Vs. Nirmal Singh & Anr. (RP No.3552 & 3553 of 2008) '''', the facts are identical in this case but the principle of the order have been applied to the instant case.

OF late, many cases have come before this Forum relating to fraud and misappropriation by an Agents appointed by National Savings Organization acting as an Agent for Department of Posts. In such cases, both tried to avoid their liabilities towards the persons who have been victims of these unscrupulous agencies. Most of the victims are either Sr. Citizen, or an innocent members of Public who have placed their trust in Agents appointed by working on behalf of Central and State Governments. We are of the view that it is the time that cognizance should be taken of the fact that Agents have been appointed without proper scrutiny and verification and continue to work by repeated automatic renewal of their agencies by the Appointing Authorities. There is no supervision and over sight over their working either by Appointing Authority or by the Agencies using their services such as Department of Posts. It is the high time that entire system is reviewed by the Ministry of Finance in consultation with the stakeholders to bring out clear cut guidelines to avoid the cheating and victimization of the public at the hands of these unscrupulous agents, and quite after in connivance with the officials of the Department of Posts. A list of do ''s and don ''t ''s should invariably be displayed prominently in the post office as also given to all the clients of Department of Posts, who avail of their services with regard to small savings scheme so that they can safeguard their interests. There should be a similar set of guidelines with a detailed check list for the Post Master and staff in the Post Offices. Affidavits shall be filed by the Secretary, Economic Affairs, Ministry of Finance and Secretary, Department of Posts with regard to action taken in this regard and a separate affidavit shall be filed by Secretary, Department of Posts with regard to the enquiry held in their specific case and what action taken in this regard.

FROM the facts of the case given above, it is clear that no jurisdictional or legal error has been shown to us to call for interference in the exercise of powers under Section 21 (b) of Act. Since, two Fora below have given detailed and reasoned orders which do not call for any interference nor do they suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, present petition is hereby, dismissed with cost of Rs.1,00,000/ - (Rupees One Lakh only).

PETITIONERS are directed to pay Rs.50,000/ - (Rupees Fifty thousand only) directly to respondent no.1 and balance amount of Rs.50,000/ - (Rupees Fifty thousand only) to be deposited by way of demand draft in the name of ''Consumer Legal Aid Account '' of this Commission, within four weeks from today. In case, petitioners fail to pay/deposit the said cost within the prescribed period, then they shall also be liable to pay interest @ 9% p.a., till realization. Cost is to be recovered from the official found guilty of negligence and collusion. List on 4.4.2014 for compliance.