Department of Post Liable for Fraud by its Employees – Depositors Entitled to Refund

Judgment dated 15.10.2026 of the High Court of Madhya Pradesh at Jabalpur in Writ Petition No.23634 of 2023 of Ankit Tamrakar  Vs.  Union of India and others with connected writ petitions

It is a case where the petitioner herein approached the concerned post office with a request to open Term Deposit Account as well as a National Savings Certificate. The petitioner, within the premises of the post office, was met by the persons who were employees of the post office and accordingly the account was opened and a passbook was also issued to the petitioner. Later on, it was found that there was a scam and the passbooks were forged and fabricated and no accounts were opened. Accordingly, the aforesaid employees of the post office who were instrumental in commission of the aforesaid offence were prosecuted and later on, convicted as well. The grievance of the present petitioner in this cases is that since they have been duped at the behest of the employees who were undisputedly on the rolls of the department, the department has vicarious liability to indemnify the petitioner who had suffered pecuniary losses on account of the fraud played at the behest of the employees of the post office. The claim of the petitioners has been turned down by the Department of Post Office vide impugned order on the ground that the petitioner, in order to open the account, had approached the employee of the post office who was already transferred and was not posted at the concerned branch, and instead of approaching him, the petitioner was required to approach the authorized office employee at the counter. 6. Learned counsel for the petitioner contends that, in such nature of cases have been taken note of by the Department of Post Office in a Circular dated 27th of May, 2021 contained in Annexure RJ-3. The said circular contains provisions for standard operating procedures for handling of claim cases arising out of loss and fraud cases. It is contended by the counsel that the said circular contains the specific provision that the complaint cases are to be entertained in cases where the accounts are not opened or a fake passbook was issued.