‘Act with fairness’: Karnataka High Court slams Postal Department over savings scheme

The bench said, “A public institution entrusted with the confidence of the people must act with diligence, fairness and accountability; otherwise, every such lapse erodes the very confidence upon which public administration rests.”

“Public trust cannot be lost in postal administration. The Postal Department must ensure that such instances do not recur in future,” the court emphasised.

Case background

It all began in 1998 with Krishna approaching the postmaster of Banashankari seeking a transfer of four NSC certificates to his name. As no action was taken, he sent further representations to the senior superintendent of Post Offices and thereafter to the Post-Master General.

On 27.04.2000, he handed over the original certificates to postal authorities to facilitate the enquiry, transfer of the certificates in his favour and payment of the maturity amount. He was told that the certificates were already transferred to third parties and the amount was realised by them.

Krishna then approached the Bengaluru consumer court in 2000, but the court rejected the complaint. Later, the state consumer court sent the complaint back to the district consumer court for fresh consideration of the matter. The forum again rejected Krishna’s complaint alleging deficiency in service against the postal department. He challenged the order before the State Consumer Commission in 2006.

The Commission allowed the appeal and held that original National Savings Certificates were with Krishna and the Postal Department had permitted the transfer of certificates in the favour of third parties, without obtaining the original certificates.

The commission held that the Postal Department was negligent in dealing with the certificates and that such negligence amounted to deficiency in service. The National Consumer Disputes Redressal Commission too rejected the department’s plea, following which it approached the high court.

Court rejects postal department’s allegations

The department alleged that Krishna colluded with then sub post master, M K Prabhakar, and submitted a transfer form to create an impression that the original holders had transferred the certificates in his favour.

Further, it was contended that Krishna could not be treated as a consumer in the strict sense, since the issuance of a National Savings Certificate involved a statutory scheme and not a contractual service between the department and him.

Rejecting the contentions, the court said, “The fact that the concerned employee of the postal department was proceeded against departmentally and compulsorily retired, by itself, cannot be treated as proof of collusion between the employee and the respondent.”

The bench in the order said, “The employee was admittedly functioning in the post office, and the disputed transactions were carried out in the course of the work entrusted to him. The fact that the employee acted dishonestly or in violation of the prescribed procedure does not, by itself, absolve the department of its responsibility towards a person who has suffered on account of such acts.”

The order added, “The department may proceed against the erring employee and recover the loss, if permissible in law, but that does not extinguish its liability towards the complainant.”