Calcutta High Court: A single bench comprising of Shekhar B. Saraf,* J., held that the postal department is liable for the fraudulent actions of its authorized SAS agent, and certain post office employees involved in the fraud. The Court further held that the condition precedent for the issuance of a Writ of Mandamus is the violation of a legal right and since the petitioners’ claim is justified, therefore, Writ of Mandamus can be issued against the postal authorities.
“Post office, in many cases, do not only act as the nation’s preferred carrier of words and emotions, but also serve as the guardian of its savings. It is the trust that has been built over decades that citizens place on their local post offices and it is the sacred duty of the postal department to forever and continuously uphold that trust. The breach of that trust, is not just limited to only the person who is affected by that breach, but can also affect the conscious and trust of the citizenry towards the postal system, which is the lifeblood of Indian republic, at large.”
Factual Matrix
In the instant matter, a man died during a terrorist attack involving an IED Blast while proceeding to the work site. His wife, the petitioner, received compensation and death benefits in total of Rs. 13,64,405/- from various departments and the State and Central Government. The petitioners handle over Rs. 7,00,000/- to an Authorized Postal Agent in the local Burnpur Post Office, for investment in MIS and Term Deposit. This amount included a Cheque of Rs. 4,99,500/- for making an MIS Account. The petitioners were given an MIS Passbook by the Authorized Postal Agent, reflecting an investment of Rs. 4,99,500/-, and they started receiving monthly interest from 20-10- 2010, until June 2012. The Passbook was taken by the authorized SAS Agent on the pretext of computerizing the account and was not returned until later recovered by the police. From July 2012, the Post Office refused to provide the MIS payment, claiming the accounts were not genuine. The petitioners requested a refund, but there was allegedly no response from the Post Office. When the petitioners enquired about the balance of Rs. 2,00,000/- given for Fixed Deposit and they discovered that the Fixed Deposit Account was not genuine, and transactions were made in a Savings Bank Account opened in the petitioners’ name without their application or knowledge. The petitioners alleged that they lodged criminal complaints against the authorized SAS Agent, but the Post Office refuses to take responsibility and further, complained to the Assistant Director of Postal Services but did not receive a satisfactory response.
The petitioners preferred the present writ petition seeking the issuance of a writ of mandamus and a writ of certiorari upon the respondents and pray for the settlement of their claim of Rs. 6,99,500/- along with interest at the rate of 18% per annum from the date of deposit.
Petitioners’ Contentions
The petitioners contended that a serious fraud has occurred, and the respondent authorities have not adequately addressed the petitioners’ grievance concerning the misappropriation of funds. It was contended that the respondent authorities should have been more vigilant to prevent such fraud, and their failure to do so has seriously prejudiced the interests of the petitioners. It was further argued that the authorized Postal Agent was a representative of the respondent authorities, making them liable for any loss suffered by the petitioners due to the agent’s misdeeds and respondents’ employees were directly involved in the fraudulent practice. The petitioners also emphasized that since no other adequate remedy is available, the writ jurisdiction of the Court is necessary to provide complete relief to the petitioners.
Respondent’s Contentions
The respondents contended that the writ petition should be dismissed as it suffers from suppression of material facts and incorporates incorrect and misleading statements. It was contended that the MIS account number claimed by the petitioners does not exist, proving it to be a fake account, and hence, the respondents will not accept any liability for it, moreover, the MIS and TD accounts claimed by the petitioners were not opened at the Burnpur Market Sub Post Office. It was contended the cheque issued in favor of the concerned Agent, instead of the Sub Postmaster, shows that the amount was not paid to the Post Office, and they cannot be held responsible for payments made to others. The respondents contended that the Department of Posts has no direct control over the appointment or conduct of an SAS agent appointed by the Government of West Bengal.
Courts Observations and Analysis
1. Whether or not the respondent department can be held liable for the actions of Sri Routh or not?
The Court referred to the Ministry of Finance (DEA) O.M. No. F1(53)/NS/57 and D.G.’s Special P.O. Circular No. 66, which outlines the scope of a SAS agent’s authority to canvass for deposits in MIS accounts.
The Court also referred the judgment in United India Insurance Co. Ltd. v. Sajjad Hussain, MA No. 235/2012 c/w MA No. 158/2017, order dated 10-03-2023, where it was held that contracts entered through an agent may be enforced against the principal and Canara Bank v. Canara Sales Corpn., (1987) 2 SCC 666, where it was held that a bank/post office is liable for fraudulent actions of its employees if committed during the course of employment.
The Court rejected the blame game between the postal department and the Government of West Bengal, noting that certain post office officials were involved in the fraudulent practice along with the authorized SAS Agent. The Court emphasizes that the petitioners’ trust in Sri Routh, an authorized agent, was not misplaced, and the postal department had a duty to maintain strong vigilance over its agents.
While noting that there was involvement of both the authorized agent and certain post office employees in the fraudulent scheme the Court held that the liability of the postal department cannot be denied, and the petitioners’ claim against the department is maintainable.
2. Whether or not a Writ of Mandamus can be issued in the present case directing the respondents to settle the claim of the petitioners?
The Court referred judgment in Praga Tool Corpn. v. C.A. Imanual, (1969) 1 SCC 585, where it was held that a Writ of Mandamus lies to secure the performance of a public or statutory duty when the applicant has a sufficient legal interest, D.N. Jeevraj v. Chief Secretary, Government of Karnataka, (2016) 2 SCC 653, where it was clarified that a writ of mandamus is issued to enforce a legal right when there is a legal duty to perform by the party against whom it is sought and Director of Settlements, A.P. v. M.R. Apparao, (2002) 4 SCC 638, where it was explained that the issuance of a Writ of Mandamus requires the satisfaction of a legal right that has been violated, and the duty to be enjoined may be imposed by the Constitution, statute, common law, or rules having the force of law.
While referring to Saraswati Industrial Syndicate Ltd. v. Union of India, (1974) 2 SCC 630, the Court also emphasizes the need for a demand for performance and refusal before issuing a Writ of Mandamus.
Based on the precedents and the material on record, the Court opined that the condition precedent for the issuance of a Writ of Mandamus is the violation of a legal right and in the instant case, the petitioners’ legal right to receive benefits from their investment was violated due to the fraudulent actions of an authorized SAS agent and certain postal officials, therefore, the court held that the issuance of a Writ of Mandamus against the postal authorities is maintainable, and the petitioners’ claim is justified.
Court’s Verdict
The Court issued a Writ of Mandamus directing the Chief Postmaster General to settle the petitioner’s claim of Rs. 6,99,500/- with interest at the rate of 9% per annum, applicable from the date of deposit until the date of actual payment. The Court orders the settlement to be made within four weeks from the date of the order.
[Sulekha Chatterjee v. State of W.B., 2023 SCC OnLine Cal 2242, order dated 01-08-2023]
*Judgment by Justice Shekhar B. Saraf
Advocates who appeared in this case:
Mr. Sanjoy Mukherjee, and Mr. Jayabrata Mukherjee, Counsel for the Appellants;
Mrs. Indrani Chokraborty and Ms. Sarda Jha, Counsel for the Respondents.
