RESERVED

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                              UTTAR PRADESH, LUCKNOW    

                                 APPEAL NO. 395 OF 2022

      (Against the order dated 21-04-2022 in Complaint Case No.08/2011

                              of the District Consumer Commission, Varanasi)

Union of India

through Senior Post Master,

Visheshwarganj, Post Office,

Visheshwarganj, Varanasi.  

                                                                                           ….. Appellant.

                                                            Versus

1. Smt. Shashi Kala Baranwal

W/o Mahesh Ji Baranwal

                R/o Village Babusarai, Post Office, Maharajganj,

                Sant Ravidas Nagar, Bhadohi.

                Presently residing at House No. 38/8 Plot No.8

                Raghunath Nagar Colony, Mahmoorganj

                Varanasi

1. Jagat Narayan Mishra

S/o Sri Surya Narayan Mishra,

               R/o C-21/92-93, Mahamandal Nagar,

     Lahurabir,

               Varanasi (Died on 18-09-2021).  

                                                                                                      …. Respondents.

                                                          AND

                                 APPEAL NO. 414 OF 2022

      (Against the order dated 21-04-2022 in Complaint Case No.08/2011

                              of the District Consumer Commission, Varanasi)

Smt. Shashi Kala Baranwal, W/o Mahesh Ji Baranwal

          R/o Village Babusarai, Post Office, Maharajganj,

          Sant Ravidas Nagar, Bhadohi.

          Presently residing at House No. B. 38/8 Plot No.8

          Raghunath Nagar Colony, Mahmoorganj

          Varanasi

                                                                                                          ….Appellant

  Versus

1. Union of India through Senior Post Master,

     Visheshwarganj, Post Office, Visheshwarganj,

                Varanasi

02. Jagat Narayan Mishra S/o Sri Surya Narayan Mishra,

                R/o C-21/92-93, Mahamandal Nagar, Lahurabir,

               Varanasi  

   ….Respondents

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BEFORE:

HON'BLE MR. JUSTICE ASHOK KUMAR, PRESIDENT

For the Appellant                        :  Sri Krishna Pathak holding brief of

                                                        Dr. Uday Veer Singh, Advocate.

For the Respondents No.1           :  Sri Ajai Wahi, Advocate.

Dated :  28-12-2022

                                            JUDGMENT

PER MR. JUSTICE ASHOK KUMAR, PRESIDENT

These two appeals have been filed under Section-41 of the Consumer Protection Act 2019 against same judgment and order dated 21-04-2022 passed by District Consumer Commission, Varanasi in Complaint Case No. 08/2011 Smt. Shashikala Baranwal V/s Union of India and another, as such both appeals are being decided by a common judgment.

Appeal No. 395/2022 has been filed by the Union of India through Senior Post Master, Varanasi who is the opposite party no.1 in the complaint for setting aside the impugned judgment and order passed by the learned District Consumer Commission, Varanasi and to allow the appeal in the interest of justice.

Appeal No. 414/2022 has been preferred by Smt. Shashikala Baranwal who is the complainant in complaint to enhance the amount prayed for in the complaint petition modifying the impugned judgment and order dated 21-04-2022 passed by the learned District Consumer Commission, Varanasi.

In Appeal No. 395/2022 Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for appellant appeared and Sri Ajai Wahi, learned Counsel for respondent/complainant appeared.

In Appeal No. 414/2022 Sri Ajai Wahi, learned Counsel for appellant appeared and Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the respondent/opposite party No.01 appeared.

I have heard learned Counsel for the both parties and have gone through the impugned judgment and order as well as records of the case.

Facts of the case stated in brief are that the complainant filed a complaint before the learned District Consumer Commission, Varanasi with the averments that she opened a new account of provident fund at the post

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office, Vishveshwar Ganj, Varanasi i.e. the opposite party number 1 in the complaint, through its agent the opposite party 2, who opened the  account by depositing Rupees 60,000/- initially. The opposite party number 2 gave a pass book with the entry of the deposit. The complainant, in order to verify genuineness of the transaction and integrity of the agent, cross-checked the amount in her pass-book with the ledger account of the post-office and found it correct. Later on, she deposited many other sums of money in the PPF account on several dates, detail of all money tendered to be deposited is elaborated in Para 6 of the complaint.

It is alleged that the agent, opposite party number 2 issued fake receipts, for these sums of money proffered by the account holder, but  with these receipts the complainant was satisfied that her money was deposited in the account. As per the complainant, by means of all these deposits, the balance in the PPF account should have been approx. Rs.11,60,000/-. When the complainant compared the ledger book with the passbook, it was found that all the subsequent deposited money was not shown in the ledger book. The complainant alleged that the opposite party number 2, in collusion with a few employees of the post office, embezzled the money, which was given by the complainant to the opposite party number 2 for depositing it in the PPF account. This was further alleged that she purchased some Kisan Vikas Patra with the assistance of opposite party number 2 for her and her family members, the certificate issued for these KVPs were, subsequently, all discovered to be forged and stolen. The party number 2, who is an employee of party number-1, misappropriated the amount for which the Post office is liable to pay. The complainant submitted this complaint for recovery of the amount and other damages.

    The opposite party No.01 submitted his written statement, in which, he accepted opening of the PPF account and initial deposit of sum of Rupees 60,000 and said that the complainant blindly relied on the opposite party number- 2 being employee of O. P. No.01 and did not care to check the ledger from the 1992 to the year 2010, for 19 years. The complainant also

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did not bother to take back the passbook from the agent.

According to the opp. party the act of depositing the amount for these 19 years, without verifying the amount at post office is an act of laxity and carelessness on part of the complainant. As per the opposite party No.01 the complainant herself is guilty of negligence for the alleged fraud of the opposing party no.2, otherwise she would have discovered the fraud, had she been a little attentive. The opposing party-1 has said that all the national saving agents appointed as per paragraph 10 of directory, which provides that if any fraud is committed by any agent, it is enquired by the appointing authority, who will, lodge a first information report in police station, after the enquiry.

The national saving agents are appointed by the State Government through District Magistrate of the District concerned as District Saving officers, who is responsible for the act of an agent and the opposite party no.1 that is the post-office is not legally accountable for that. Moreover, the consumer court was not having jurisdiction to entertain such complaint, because the agent for the facility of work of the Post office is appointed by the District Magistrate of the District concerned and the acts of fraud and misdeeds committed by the agent are looked in to, by that authority.  As a result, the so called agent for the works of a Post Office is not in fact his agent. It is also asserted by the opposite party no.1 that the complainant has alleged fraud and forgery in their complaint, therefore, the question involved needs a detailed enquiry, for this reason the consumer commission with summary powers has no jurisdiction to hear and decide this complaint.

          Opposite party number 2 also submitted his written statement, in which he has stated that he deposited all the amount given by the complainant and never defrauded him. The complainant has submitted this false complaint to grab some money from the post office. The complainant is an educated person and cannot do such an act. She was competent enough enquired from the post office and to check the ledger, herself. There is no independent witness substantiate the version of the complainant in her complaint. She has submitted false and frivolous complaint which is liable to be rejected. The opposite party number two sought compensation of

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Rs. 10,000/- from the complainant for his harassment.

          After giving opportunity of hearing to the parties,  the District Consumer Commission(then forum) allowed the complaint and directed the opposing parties jointly and severally to pay to the complainant a sum of Rs. 6,68,,000/- along with annual interest of 6% per annum from the date of filing the complaint till the date of payment within a period of 30 days from the date of judgment.

          Being aggrieved of the judgment the opposite party number one preferred appeal being Appeal No.395/2022.

The complainant also being aggrieved of the judgment preferred appeal being Appeal No. 414/2022 for enhancement.

 It is submitted by the appellant/opposite party No.01 that the District Forum has failed to appreciate the provisions of paragraph 24A of Standardized Agencies is the system, which gives that in the misuse or misappropriation of investors money by an agent the appointing authority concerned should deal with the matter and takes suo-motu prompt action.

It is submitted by the learned Counsel for the appellant/complainant that the learned District Consumer Commission, Varanasi has committed error in not awarding the compensation to the complainant as prayed by the complainant in her complaint. The interest awarded by the learned District Consumer Commission is on the lower side.

          I have heard Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the appellant/opposite party No.01 and Shri Ajay Wahi, learned Counsel for the complainant and perused all the material on record.

          On hearing Counsels for both the parties and on perusal of the records I have considered the following points for disposal of this appeal.

01.Whether the agent Jagat Narayan Mishra was an agent of appellant post office in relation to the third party i.e. the complainant/ respondent for the impugned transactions?

          02.Whether the appellant post office is bound by the impugned acts committed by the agent Jagat Narayan Mishra in taking the deposits  on behalf of the post office ?

          03.Whether the post office is liable for the compensation towards the

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 complainant and the impugned judgment is correct ?

Point  no.1: In the present case, it is alleged by the complainant that the respondent no.2 Jagat Narayan Mishra received Rs.60000.00 cash from the complainant for opening of the said Public Provident Fund account No.10000458. It is further alleged that the agent committed fraud and misappropriated the money tendered to him for further deposits meant for the PPF account. The respondent no.2 also issued fake Kisan Vikas Patras for the complainant and thus, by committing fraud made the complainant lose money to the extent of approx. Rs.7,98,000/-. The appellant/opposite party No.01 in its written statement disputed the authority of the respondent No.2/opposite party  no.2 as their agent and have said that in paragraph 24 A of OM no.FI(53)NS/57 dated 31.12.1959 of Standardized Agency System issued by Ministry of Finance and special circular no.66 date 4.3.1960 of the Director General, Post, it is given that in case of misappropriation of investor's money by an agent, the appointing authority concerned would deal with the matter and take suo motu prompt action on it. It is also contended by the appellant that in the present case, the appointing authority of the respondent no.2 was the District Magistrate/Chief Development Officer, Varanasi. Therefore, the respondent no.2 cannot be assumed as an agent of the appellants and liability of misappropriation of payment made by the complainant cannot be fastened upon them. The Ld. Forum ought to have sought the agreement of appellant and respondent no.2 which might have shown the legal preposition that there is an agreement between the respondent no.2 and appointing authority and they are responsible for the consequences of any misdeed by the agent.

Regarding this argument submitted by the appellant, the provisions of Contract Act on the matter of appointment  and authority of an agent should be taken in view because as per the pronouncement of the Hon’ble Apex court in Marine Container Services vs. Gogo Garments published in AIR 1999 SC page 80 (Para 4)  law of contract applies to all litigants in matter of all contractual obligations including the litigants under the Consumer Protection Act,1986.

The provisions of Indian Contract Act, 1872 relating to appointment

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of agent, it is given in section 182 –

182. “Agent” and “principal” defined.—An “agent” is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal”

Thus, an agent is a person employed to do an act for another or to represent any in dealing with third persons which makes clear that any person who is representing the other person in a business dealing can be assumed an agent for the third persons. In this regard, Section 184, it is given that whoever assumed an agent becomes responsible to his principal according to its provisions of the Act. It is further given in Section 185 that any consideration is not necessary to create an agency most importantly Section 186 of the Contract Act gives that the authority of an agent may be expressed or implied. Defining expressed and implied authority, Section 187 of the Act says that -

187. Definitions of express and implied authority.—An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case.

As per Section 187, implied authority can be inferred from the circumstances of the case and from the ordinary course of dealing between the parties. In this particular case though the agent respondent no.2 was appointed by the District Magistrate, Varanasi as Chief Saving Officer, Varanasi but said agent was doing all the work and handling all the transaction for the Post-Office. He opened PPF account for and on behalf of the complainant and also purchased Kisan Vikas Partra of the appellant for him and for his family members. Therefore, impliedly he was working for and as an agent of the Post Office in relation to the complainant, i.e. the third party. In this regard, the judgment of Hon’ble High Court in Dev Narayan Rao vs. Kukur Bind reported in 1902 ILR 24 Alld. Page 319 is relevant, wherein the Hon’ble High Court pronounced that the authority to an agent may be given by words written or spoken  or by conduct of the authority.

Hon’ble Supreme Court in judgment Chairman, LIC vs. Rajiv Kumar

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Bhaskar reported in (2005) 6 SCC page 188 has pronounced that for third party a person can be assumed as an agent of his principal, if the third party has reasons to believe that the person is acting as an agent of that principal. In this particular case before the Hon'ble Court, the employer collected premium of LIC from their  employees, the Hon’ble Apex Court found that the employees has reason to believe that their employer is collecting the premium of insurance as an agent of LIC. The aforesaid pronouncement of Hon’ble Apex Court is applicable to this particular case also. In this matter though the respondent no.2 was appointed by the District Magistrate as per version of the appellant yet he was doing all the transactions and act on behalf of the post office, therefore, for the third party i.e. the complainant, they/he can be characterized as an agent of post office as far as the transactions with the third party i.e. the complainant are concerned. 

On this point, the judgment of Hon’ble NCDRC in Union of India and ors. vs. Arun Borse and ors. reported in 2007 (2) CPJ 165 (NC) can be cited which gives that no doubt the agent might have been appointed by the District Collector who was receiving transactions for purchasing Kisan Vikas Patra and as well as doing transaction of Post Office under small savings scheme. The Hon’ble NCDRC in Para 8 of the judgment said that no doubt the agent might have been appointed by the District Collector, at the same time this is internal arrangement of  appointing agents for collecting money under the small savings scheme between the Union of India and the State Government. It is also true that as per the circular of Standardized Agency System, in case of misappropriation of investor’s money, by an agent, the State Government would bear the loss but this is also an internal arrangement between the Government of India and the State Government but the consumer/complainant is not concerned with the said arrangement and hence, he is entitled to recover the amount from both or any of them as their responsibility is joint and several.

In this particular case, upon guidelines of the aforesaid judgments of the Hon’ble Supreme Court and Hon’ble NCDRC, it can be inferred that though the agent respondent no.2 was appointed by the District Magistrate yet in matter of alleged misappropriation of the amount deposited in PPF account and in issuing fake Kisan Vikas Patra, the liability can be fixed upon

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on the State Government, the appointing authority, as well as in particular  his principal i.e. the post office the appellants Union of India through post office, who are also liable for the loss and compensation to the complainant.

 Point No.2:

It is given in Section 226 of the Contract Act that contracts entered into through an agent and obligation arising from the act done by an agent may be enforced and will have the some legal consequences, as if the contract had been entered into by the principal in person. In case of agent exceeding his authority of agent, it is given in section 226 of the Contract Act that when an agent does more than he is authorized to do which is within his authority can be separated from the part which beyond his authority so much only what he does as within his authority is binding between him and his principal. In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acing in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

227. Principal how far bound, when agent exceeds authority.—When an agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.

In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acting in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

238. Effect, on agreement, of misrepresentation of fraud, by agent.—Misrepresentation made, or frauds committed, by agents acting in the course

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of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.

In combined reading of Section 227 and 238 of the Contract Act, it can be visualized that if the third party can make out that the agent is making transactions beyond the authority of agent i.e. for which he has been authorized by the principal then liability of principal towards the third party does not arise but when from the simple transaction, it cannot be made out that the agent is not authorized to do for the transaction, he is making then the principal will liable for any action or misrepresentation committed by the agent.

In this particular case, it is clear from the record that the agent Jagat Narayan Mishra has colluded with the employees of the post office department. FIR for misappropriation, cheating and fraud has been registered against Jagat Narayan Mishra by Ganesh Baranwal vide his letter dated 3.10.2010, a copy of the same is on record as annexure ‘E” of the written statement of the respondent. FIR was also lodged against one Triloki Nath Ram working as Ledger Assistant in the said post office whose bail application was disposed of on 4.1.2012 wherein it was held that there was a collusion between the agent and employees of the post office. Copy of the said order dated 4.1.2012 is on record annexure ‘F’. A copy of FIR annexure ‘G’ of the written statement against Subhash Chandra Chaurasia, Counter Assistant in GPO, Vishesherganj, Varanasi was registered. The bail application of the said employee was also disposed on 4.1.2012, copy of the said order is on record as annexure ‘H’. Similarly, other FIRs were lodged by the complainant and his family members against the agent Jagat Narayan Mishra and employees of the post office which shows that the agent colluded with the employees of the post office so that he was successful in misappropriating the sum deposited in PPF accounts and also issuing fake Kisan Vikas Partras by which heavy loss was incurred to the complainant and his family members for which agent respondent no.2 and appellant as

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his principal both are jointly and severally liable.

In this regard, I rely on  the judgment of the Hon’ble NCDRC in Rajendra Singh Mullik vs. Sr. Branch Manager, LIC reported in 2018(2) CPR 305 (NC). In this case, the complainant alleged that he had deposited a sum of money per year from 11.1.2005 for 8 years till 11.1.2012 and he deposited total Rs.81176.00. It is further submitted by him that the OP LIC refused to pay the deposited amount by saying that the complainant has deposited the amount in Jeevan Nidhi Pension Plan policy. Thus, it was alleged that agent of the OP played a fraud by depositing the amount in wrong policy. The Hon’ble NCDRC giving verdict that there was deficiency on the part of the LIC and their agent. The complainant has suffered unnecessarily. Therefore, he deserves to receive the entire amount along with interest.

It is also held in Haryana Gramin Bank and ors. vs. Jasvinder and ors. reported in IV (2010) CPJ 210 (NC). In the judgment it was pronounced that an employee is vicariously liable for action of employees. It is clear that the postal authorities are liable to provide adequate compensation of the depositors who suffered due to misdeed of its own employees.

On conclusion of the said discussions, it may summarize that in this particular case, the agent of the appellant the post office allegedly misappropriated the amount deposited by the complainant and her family members into PPF accounts and also the agent issued fake Kisan Vikas Partras by utilizing hard earned money of the complainant. Therefore, as principal of their agent, the appellants are liable to make good the loss incurred by the complainant.

Coming to the third point in this particular case, the ld. District Consumer Commission, Varanasi has decreed the complaint of the complainant and issued a direction to the appellant for payment of Rs.6,68,000/- along with 6% simple interest per annum from the date of institution of complaint till the date of payment. The order for direction of recovery of Rs.6,68,000/- with 6% simple interest appears to be sound in my view.

Having gone through the material and evidence available on record

and after perusal of the impugned judgment and order and particularly the

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findings recorded by the learned District Consumer Commission, I am of the opinion that the order passed by the learned District Consumer Commission is fully justified and is correct, as such need no interference and as such is liable to be upheld. The learned District Consumer Commission has taken all care in mentioning the issues in detail and in deciding the same. The appeals are therefore liable to be dismissed.

For reasons recorded above I am of the view that both these appeals have no force and are liable to be dismissed. In this way, the appeal No. 395/2022 filed by the Union of India is liable to be dismissed. Also the appeal No. 414/2022 filed by the complainant is liable to be dismissed. The judgment and order of the learned District Consumer Forum is liable to be confirmed.  

ORDER

       The Appeal No.395/2022 filed by the Union of India is dismissed.

                 The appeal No. 414/2022 filed by the complainant is dismissed.

       The judgment and order of the learned District Consumer Commission, Varanasi is confirmed. Both parties shall bear their own costs.

Rs.25,000/- deposited by appellant in Appeal No. 395/2022 under Section-15 of the Consumer Protection Act 1986 shall be remitted to the District Consumer Commission, Varanasi alongwith interest if any accrued for disposal in accordance with law.

Let copy of this order be made available to the parties within 15 days positively as per rules.

This judgment shall be placed on the record of Appeal No. 395/2022 with its copy to be laid on the record of other Appeal No. 414/2022.  

                    ( JUSTICE ASHOK KUMAR )

                                  PRESIDENT

          Pnt.   

RESERVED

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                              UTTAR PRADESH, LUCKNOW    

                                 APPEAL NO. 396 OF 2022

      (Against the order dated 18-04-2022 in Complaint Case No.270/2010

                              of the District Consumer Commission, Varanasi)

Union of India

through Senior Post Master,

Visheshwarganj, Post Office,

Visheshwarganj, Varanasi.  

                                                                                           ….. Appellant.

                                                            Versus

01.Abhinav Baranwal

S/o Sri Anil Kumar Baranwal

                R/o Village Babusarai, Post Office, Maharajganj,

                Sant Ravidas Nagar, Bhadohi.

                Presently residing at House No. 38/8 Plot No.8

                Raghunath Nagar Colony, Mahmoorganj

                Varanasi

02.Jagat Narayan Mishra

S/o Sri Surya Narayan Mishra,

               R/o C-21/92-93, Mahamandal Nagar,

     Lahurabir,

               Varanasi (Died on 18-09-2021).  

                                                                                                      …. Respondents.

                                                          AND

                                 APPEAL NO. 412 OF 2022

      (Against the order dated 18-04-2022 in Complaint Case No.270/2010

                              of the District Consumer Commission, Varanasi)

Sri Abhinay Baranwal, S/o Sri Anil Kumar Baranwal

          R/o Village Babusarai, Post Office, Maharajganj,

          Sant Ravidas Nagar, Bhadohi.

          Presently residing at House No. B. 38/8 Plot No.8

          Raghunath Nagar Colony, Mahmoorganj

          Varanasi

                                                                                                          ….Appellant

  Versus

01.Union of India through Senior Post Master,

     Visheshwarganj, Post Office, Visheshwarganj,

                Varanasi

02. Jagat Narayan Mishra S/o Sri Surya Narayan Mishra,

                R/o C-21/92-93, Mahamandal Nagar, Lahurabir,

               Varanasi  

   ….Respondents

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BEFORE:

HON'BLE MR. JUSTICE ASHOK KUMAR, PRESIDENT

For the Appellant                        :  Sri Krishna Pathak holding brief of

                                                        Dr. Uday Veer Singh, Advocate.

For the Respondents No.1           :  Sri Ajai Wahi, Advocate.

Dated :  28-12-2022

                                            JUDGMENT

PER MR. JUSTICE ASHOK KUMAR, PRESIDENT

These two appeals have been filed under Section-41 of the Consumer Protection Act 2019 against same judgment and order dated 18-04-2022 passed by District Consumer Commission, Varanasi in Complaint Case No. 270/2010 Abhinay Baranwal V/s Union of India and another, as such both appeals are being decided by a common judgment.

Appeal No. 396/2022 has been filed by the Union of India through Senior Post Master, Varanasi who is the opposite party no.1 in the complaint for setting aside the impugned judgment and order passed by the learned District Consumer Commission, Varanasi and to allow the appeal in the interest of justice.

Appeal No. 412/2022 has been preferred by Sri Abhinay Baranwal who is the complainant in complaint to enhance the amount prayed for in the complaint petition modifying the impugned judgment and order dated 18-04-2022 passed by the learned District Consumer Commission, Varanasi.

In Appeal No. 396/2022 Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for appellant appeared and Sri Ajai Wahi, learned Counsel for respondent/complainant appeared.

In Appeal No. 412/2022 Sri Ajai Wahi, learned Counsel for appellant appeared and Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the respondent/opposite party No.01 appeared.

I have heard learned Counsel for the both parties and have gone through the impugned judgment and order as well as records of the case.

Facts of the case stated in brief are that the complainant filed a complaint before the learned District Consumer Commission, Varanasi with the averments that he opened a new account of provident fund at the post

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office, Vishveshwar Ganj, Varanasi i.e. the opposite party number 1 in the complaint, through its agent the opposite party 2, who opened the  account by depositing Rs.70,000/- initially. The opposite party number 2 gave a pass book with the entry of the deposit. The complainant, in order to verify genuineness of the transaction and integrity of the agent, cross-checked the amount in his pass-book with the ledger account of the post-office and found it correct. Later on, he deposited many other sums of money in the PPF account on several dates, detail of all money tendered to be deposited is elaborated in Para 6 of the complaint.

It is alleged that the agent, opposite party number 2 issued fake receipts, for these sums of money proffered by the account holder, but  with these receipts the complainant was satisfied that his money was deposited in the account. As per the complainant, by means of all these deposits, the balance in the PPF account should have been approx. Rs.5,60,000/-. When the complainant compared the ledger book with the passbook, it was found that all the subsequent deposited money was not shown in the ledger book. The complainant alleged that the opposite party number 2, in collusion with a few employees of the post office, embezzled the money, which was given by the complainant to the opposite party number 2 for depositing it in the PPF account. This was further alleged that he purchased some Kisan Vikas Patra with the assistance of opposite party number 2 for him and his family members, the certificate issued for these KVPs were, subsequently, all discovered to be forged and stolen. The party number 2, who is an employee of party number-1, misappropriated the amount for which the Post office is liable to pay. The complainant submitted this complaint for recovery of the amount and other damages.

    The opposite party No.01 submitted his written statement, in which, he accepted opening of the PPF account and initial deposit of the sum of rupees 70,000 and said that the complainant blindly relied on the opposite party number- 2 being employee of O.P. No.01 and did not care to check the ledger from the 2002 to the year 2010, for 09 years. The complainant also did not bother to take back the passbook from the agent.

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According to the opp. party the act of depositing the amount for these 09 years, without verifying the amount at post office is an act of laxity and carelessness on part of the complainant. As per the opposite party No.01 the complainant himself is guilty of negligence for the alleged fraud of the opposing party no.2, otherwise he would have discovered the fraud, had he been a little attentive. The opposing party-1 has said that all the national saving agents appointed as per paragraph 10 of directory, which provides that if any fraud is committed by any agent, it is enquired by the appointing authority, who will, lodge a first information report in police station, after the enquiry.

The national saving agents are appointed by the State Government through District Magistrate of the District concerned as District Saving officers, who is responsible for the act of an agent and the opposite party no.1 that is the post-office is not legally accountable for that. Moreover, the consumer court was not having jurisdiction to entertain such complaint, because the agent for the facility of work of the Post office is appointed by the District Magistrate of the District concerned and the acts of fraud and misdeeds committed by the agent are looked in to, by that authority.  As a result, the so called agent for the works of a Post Office is not in fact his agent. It is also asserted by the opposite party no.1 that the complainant has alleged fraud and forgery in their complaint, therefore, the question involved needs a detailed enquiry, for this reason the consumer commission with summary powers has no jurisdiction to hear and decide this complaint.

          Opposite party number 2 also submitted his written statement, in which he has stated that he deposited all the amount given by the complainant and never defrauded him. The complainant has submitted this false complaint to grab some money from the post office. The complainant is an educated person and cannot do such an act. He was competent enough enquired from the post office and to check the ledger, herself. There is no independent witness substantiate the version of the complainant in his complaint. He has submitted false and frivolous complaint which is liable to be rejected. The opposite party number two sought compensation of Rs. 10,000/- from the complainant for his harassment.

          After giving opportunity of hearing to the parties, the District

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Consumer Commission (then forum) allowed the complaint and directed the opposing parties jointly and severally to pay to the complainant a sum of Rs. 63,000/- along with annual interest of 6% per annum from the date of filing  the complaint till the date of payment within a period of 30 days from the date of judgment.

          Being aggrieved of the judgment the opposite party number one preferred appeal being Appeal No.396/2022.

The complainant also being aggrieved of the judgment preferred appeal being Appeal No. 412/2022 for enhancement.

 It is submitted by the appellant/opposite party No.01 that the District Forum has failed to appreciate the provisions of paragraph 24A of Standardized Agencies is the system, which gives that in the misuse or misappropriation of investors money by an agent the appointing authority concerned should deal with the matter and takes suo-motu prompt action.

It is submitted by the learned Counsel for the appellant/complainant that the learned District Consumer Commission, Varanasi has committed error in not awarding the compensation to the complainant as prayed by the complainant in his complaint. The interest awarded by the learned District Consumer Commission is on the lower side.

          I have heard Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the appellant/opposite party No.01 and Shri Ajay Wahi, learned Counsel for the complainant and perused all the material on record.

          On hearing Counsels for both the parties and on perusal of the records I have considered the following points for disposal of this appeal.

01.Whether the agent Jagat Narayan Mishra was an agent of appellant post office in relation to the third party i.e. the complainant/ respondent for the impugned transactions?

          02.Whether the appellant post office is bound by the impugned acts committed by the agent Jagat Narayan Mishra in taking the deposits  on behalf of the post office?

          03.Whether the post office is liable for the compensation towards the complainant and the impugned judgment is correct ?

Point  no.1: In the present case, it is alleged by the complainant that

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the respondent no.2 Jagat Narayan Mishra received Rs.70000.00 cash from the complainant for opening of the said Public Provident Fund account No.10001371. It is further alleged that the agent committed fraud and misappropriated the money tendered to him for further deposits meant for the PPF account. The respondent no.2 also issued fake Kisan Vikas Patras for the complainant and thus, by committing fraud made the complainant loss money to the extent of approx. Rs.1,89,000/-. The appellant/opposite party No.01 in its written statement disputed the authority of the respondent No.2/opposite party  no.2 as their agent and have said that in paragraph 24 A of OM no.FI(53)NS/57 dated 31.12.1959 of Standardized Agency System issued by Ministry of Finance and special circular no.66 date 4.3.1960 of the Director General, Post, it is given that in case of misappropriation of investor's money by an agent, the appointing authority concerned would deal with the matter and take suo motu prompt action on it. It is also contended by the appellant that in the present case, the appointing authority of the respondent no.2 was the District Magistrate/Chief Development Officer, Varanasi. Therefore, the respondent no.2 cannot be assumed as an agent of the appellants and liability of misappropriation of payment made by the complainant cannot be fastened upon them. The Ld. Forum ought to have sought the agreement of appellant and respondent no.2 which might have shown the legal preposition that there is an agreement between the respondent no.2 and appointing authority and they are responsible for the consequences of any misdeed by the agent.

Regarding this argument submitted by the appellant, the provisions of Contract Act on the matter of appointment and authority of an agent should be taken in view because as per the pronouncement of the Hon’ble Apex court in Marine Container Services vs. Gogo Garments published in AIR 1999 SC page 80 (Para 4)  law of contract applies to all litigants in matter of all contractual obligations including the litigants under the Consumer Protection Act,1986.

The provisions of Indian Contract Act, 1872 relating to appointment of agent, it is given in section 182 –

182. “Agent” and “principal” defined.—An “agent” is a person

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employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal”

Thus, an agent is a person employed to do an act for another or to represent any in dealing with third persons which makes clear that any person who is representing the other person in a business dealing can be assumed an agent for the third persons. In this regard, Section 184, it is given that whoever assumed an agent becomes responsible to his principal according to its provisions of the Act. It is further given in Section 185 that any consideration is not necessary to create an agency most importantly Section 186 of the Contract Act gives that the authority of an agent may be expressed or implied. Defining expressed and implied authority, Section 187 of the Act says that -

187. Definitions of express and implied authority.—An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case.

As per Section 187, implied authority can be inferred from the circumstances of the case and from the ordinary course of dealing between the parties. In this particular case though the agent respondent no.2 was appointed by the District Magistrate, Varanasi as Chief Saving Officer, Varanasi but said agent was doing all the work and handling all the transaction for the Post-Office. He opened PPF account for and on behalf of the complainant and also purchased Kisan Vikas Partra of the appellant for him and for his family members. Therefore, impliedly he was working for and as an agent of the Post Office in relation to the complainant, i.e. the third party. In this regard, the judgment of Hon’ble High Court in Dev Narayan Rao vs. Kukur Bind reported in 1902 ILR 24 Alld. Page 319 is relevant, wherein the Hon’ble High Court pronounced that the authority to an agent may be given by words written or spoken  or by conduct of the authority.

Hon’ble Supreme Court in judgment Chairman, LIC vs. Rajiv Kumar Bhaskar reported in (2005) 6 SCC page 188 has pronounced that for third party a person can be assumed as an agent of his principal, if the third party

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has reasons to believe that the person is acting as an agent of that principal. In this particular case before the Hon'ble Court, the employer collected premium of LIC from their  employees, the Hon’ble Apex Court found that the employees has reason to believe that their employer is collecting the premium of insurance as an agent of LIC. The aforesaid pronouncement of Hon’ble Apex Court is applicable to this particular case also. In this matter though the respondent no.2 was appointed by the District Magistrate as per version of the appellant yet he was doing all the transactions and act on behalf of the post office, therefore, for the third party i.e. the complainant, they/he can be characterized as an agent of post office as far as the transactions with the third party i.e. the complainant are concerned. 

On this point, the judgment of Hon’ble NCDRC in Union of India and ors. vs. Arun Borse and ors. reported in 2007 (2) CPJ 165 (NC) can be cited which gives that no doubt the agent might have been appointed by the District Collector who was receiving transactions for purchasing Kisan Vikas Patra and as well as doing transaction of Post Office under small savings scheme. The Hon’ble NCDRC in Para 8 of the judgment said that no doubt the agent might have been appointed by the District Collector, at the same time this is internal arrangement of  appointing agents for collecting money under the small savings scheme between the Union of India and the State Government. It is also true that as per the circular of Standardized Agency System, in case of misappropriation of investor’s money, by an agent, the State Government would bear the loss but this is also an internal arrangement between the Government of India and the State Government but the consumer/complainant is not concerned with the said arrangement and hence, he is entitled to recover the amount from both or any of them as their responsibility is joint and several.

In this particular case, upon guidelines of the aforesaid judgments of the Hon’ble Supreme Court and Hon’ble NCDRC, it can be inferred that though the agent respondent no.2 was appointed by the District Magistrate yet in matter of alleged misappropriation of the amount deposited in PPF account and in issuing fake Kisan Vikas Patra, the liability can be fixed upon on the State Government, the appointing authority, as well as in

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particular  his principal i.e. the post office the appellants Union of India through post office, who are also liable for the loss and compensation to the complainant.

Point No.2:

It is given in Section 226 of the Contract Act that contracts entered into through an agent and obligation arising from the act done by an agent may be enforced and will have the some legal consequences, as if the contract had been entered into by the principal in person. In case of agent exceeding his authority of agent, it is given in section 226 of the Contract Act that when an agent does more than he is authorized to do which is within his authority can be separated from the part which beyond his authority so much only what he does as within his authority is binding between him and his principal. In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acing in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

227. Principal how far bound, when agent exceeds authority.—When an agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.

In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acting in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

238. Effect, on agreement, of misrepresentation of fraud, by agent.—Misrepresentation made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements

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made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.

In combined reading of Section 227 and 238 of the Contract Act, it can be visualized that if the third party can make out that the agent is making

transactions beyond the authority of agent i.e. for which he has been authorized by the principal then liability of principal towards the third party does not arise but when from the simple transaction, it cannot be made out that the agent is not authorized to do for the transaction, he is making then the principal will liable for any action or misrepresentation committed by the agent.

In this particular case, it is clear from the record that the agent Jagat Narayan Mishra has colluded with the employees of the post office department. FIR for misappropriation, cheating and fraud has been registered against Jagat Narayan Mishra by Ganesh Baranwal vide his letter dated 3.10.2010, a copy of the same is on record as annexure ‘E” of the written statement of the respondent. FIR was also lodged against one Triloki Nath Ram working as Ledger Assistant in the said post office whose bail application was disposed of on 4.1.2012 wherein it was held that there was a collusion between the agent and employees of the post office. Copy of the said order dated 4.1.2012 is on record annexure ‘F’. A copy of FIR annexure ‘G’ of the written statement against Subhash Chandra Chaurasia, Counter Assistant in GPO, Vishesherganj, Varanasi was registered. The bail application of the said employee was also disposed on 4.1.2012, copy of the said order is on record as annexure ‘H’. Similarly, other FIRs were lodged by the complainant and his family members against the agent Jagat Narayan Mishra and employees of the post office which shows that the agent colluded with the employees of the post office so that he was successful in misappropriating the sum deposited in PPF accounts and also issuing fake Kisan Vikas Partras by which heavy loss was incurred to the complainant and his family members for which agent respondent no.2 and appellant as his principal both are jointly and severally liable.

In this regard, I rely on  the judgment of the Hon’ble NCDRC

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in Rajendra Singh Mullik vs. Sr. Branch Manager, LIC reported in 2018(2) CPR 305 (NC). In this case, the complainant alleged that he had deposited a sum of money per year from 11.1.2005 for 8 years till 11.1.2012 and he deposited total Rs.81176.00. It is further submitted by him that the OP LIC refused to pay the deposited amount by saying that the complainant has deposited the amount in Jeevan Nidhi Pension Plan policy. Thus, it was alleged that agent of the OP played a fraud by depositing the amount in wrong policy. The Hon’ble NCDRC giving verdict that there was deficiency on the part of the LIC and their agent. The complainant has suffered unnecessarily. Therefore, he deserves to receive the entire amount along with interest.

It is also held in Haryana Gramin Bank and ors. vs. Jasvinder and ors. reported in IV (2010) CPJ 210 (NC). In the judgment it was pronounced that an employee is vicariously liable for action of employees. It is clear that the postal authorities are liable to provide adequate compensation of the depositors who suffered due to misdeed of its own employees.

On conclusion of the said discussions, it may summarize that in this particular case, the agent of the appellant the post office allegedly misappropriated the amount deposited by the complainant and her family members into PPF accounts and also the agent issued fake Kisan Vikas Partras by utilizing hard earned money of the complainant. Therefore, as principal of their agent, the appellants are liable to make good the loss incurred by the complainant.

Coming to the third point in this particular case, the ld. District Consumer Commission, Varanasi has decreed the complaint of the complainant and issued a direction to the appellant for payment of Rs.63,000/- along with 6% simple interest per annum from the date of institution of complaint till the date of payment. The order for direction of recovery of Rs.63,000/- with 6% simple interest appears to be sound in my view.

Having gone through the material and evidence available on record

and after perusal of the impugned judgment and order and particularly the findings recorded by the learned District Consumer Commission, I am of the opinion that the order passed by the learned District Consumer

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Commission is fully justified and is correct, as such need no interference and as such is liable to be upheld. The learned District Consumer Commission has taken all care in mentioning the issues in detail and in deciding the same. The appeals are therefore liable to be dismissed.

For reasons recorded above I am of the view that both these appeals have no force and are liable to be dismissed. In this way, the appeal No. 396/2022 filed by the Union of India is liable to be dismissed. Also the appeal No. 412/2022 filed by the complainant is liable to be dismissed. The judgment and order of the learned District Consumer Forum is liable to be confirmed.  

ORDER

       The Appeal No.396/2022 filed by the Union of India is dismissed.

                 The appeal No. 412/2022 filed by the complainant is dismissed.

       The judgment and order of the learned District Consumer Commission, Varanasi is confirmed. Both parties shall bear their own costs.

Rs.25,000/- deposited by appellant in Appeal No. 396/2022 under Section-15 of the Consumer Protection Act 1986 shall be remitted to the District Consumer Commission, Varanasi alongwith interest if any accrued for disposal in accordance with law.

Let copy of this order be made available to the parties within 15 days positively as per rules.

This judgment shall be placed on the record of Appeal No. 396/2022 with its copy to be laid on the record of other Appeal No. 412/2022.  

                    ( JUSTICE ASHOK KUMAR )

                                PRESIDENT

          Pnt.   

RESERVED

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                              UTTAR PRADESH, LUCKNOW    

                                 APPEAL NO. 397 OF 2022

      (Against the order dated 20-04-2022 in Complaint Case No.311/2010

                              of the District Consumer Commission, Varanasi)

Union of India

through Senior Post Master,

Visheshwarganj, Post Office,

Visheshwarganj, Varanasi.  

                                                                                           ….. Appellant.

                                                            Versus

01.Smt. Nitya Baranwal

W/o Sri Anurag Baranwal

                R/o Village Babusarai, Post Office, Maharajganj,

                Sant Ravidas Nagar, Bhadohi.

                Presently residing at House No. 38/8 Plot No.8

                Raghunath Nagar Colony, Mahmoorganj

                Varanasi

02.Jagat Narayan Mishra

S/o Sri Surya Narayan Mishra,

               R/o C-21/92-93, Mahamandal Nagar,

     Lahurabir,

               Varanasi   

                                                                                                      …. Respondents.

                                                          AND

                                 APPEAL NO. 413 OF 2022

      (Against the order dated 20-04-2022 in Complaint Case No.311/2010

                              of the District Consumer Commission, Varanasi)

Smt. Nitya Baranwal, W/o Sri Anurag Baranwal

          R/o Village Babusarai, Post Office, Maharajganj,

          Sant Ravidas Nagar, Bhadohi.

          Presently residing at House No. B. 38/8 Plot No.8

          Raghunath Nagar Colony, Mahmoorganj

          Varanasi

                                                                                                          ….Appellant

  Versus

01.Union of India through Senior Post Master,

     Visheshwarganj, Post Office, Visheshwarganj,

                Varanasi

02. Jagat Narayan Mishra S/o Sri Surya Narayan Mishra,

                R/o C-21/92-93, Mahamandal Nagar, Lahurabir,

               Varanasi  

   ….Respondents

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BEFORE:

HON'BLE MR. JUSTICE ASHOK KUMAR, PRESIDENT

For the Appellant                        :  Sri Krishna Pathak holding brief of

                                                        Dr. Uday Veer Singh, Advocate.

For the Respondents No.1           :  Sri Ajai Wahi, Advocate.

Dated : 28-12-2022

                                            JUDGMENT

PER MR. JUSTICE ASHOK KUMAR, PRESIDENT

These two appeals have been filed under Section-41 of the Consumer Protection Act 2019 against same judgment and order dated 20-04-2022 passed by District Consumer Commission, Varanasi in Complaint Case No. 311/2010 Smt. Nitya Baranwal V/s Union of India and another, as such both appeals are being decided by a common judgment.

Appeal No. 397/2022 has been filed by the Union of India through Senior Post Master, Varanasi who is the opposite party no.1 in the complaint for setting aside the impugned judgment and order passed by the learned District Consumer Commission, Varanasi and to allow the appeal in the interest of justice.

Appeal No. 413/2022 has been preferred by Smt. Nitya Baranwal who is the complainant in complaint to enhance the amount prayed for in the complaint petition modifying the impugned judgment and order dated 20-04-2022 passed by the learned District Consumer Commission, Varanasi.

In Appeal No. 397/2022 Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for appellant appeared and Sri Ajai Wahi, learned Counsel for respondent/complainant appeared.

In Appeal No. 413/2022 Sri Ajai Wahi, learned Counsel for appellant appeared and Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the respondent/opposite party No.01 appeared.

I have heard learned Counsel for the both parties and have gone through the impugned judgment and order as well as records of the case.

Facts of the case stated in brief are that the complainant filed a complaint before the learned District Consumer Commission, Varanasi with the averments that she opened a new account of provident fund at the post

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office, Vishveshwar Ganj, Varanasi i.e. the opposite party number 1 in the complaint, through its agent the opposite party 2, who opened the  account by depositing Rs.50,000/- initially. The opposite party number 2 gave a pass book with the entry of the deposit. The complainant, in order to verify genuineness of the transaction and integrity of the agent, cross-checked the amount in her pass-book with the ledger account of the post-office and found it correct. Later on, she deposited many other sums of money in the PPF account on several dates, detail of all money tendered to be deposited is elaborated in Para 6 of the complaint.

It is alleged that the agent, opposite party number 2 issued fake receipts, for these sums of money proffered by the account holder, but  with these receipts the complainant was satisfied that her money was deposited in the account. As per the complainant, by means of all these deposits, the balance in the PPF account should have been approx. Rs.6,60,000/-. When the complainant compared the ledger book with the passbook, it was found that all the subsequent deposited money was not shown in the ledger book. The complainant alleged that the opposite party number 2, in collusion with a few employees of the post office, embezzled the money, which was given by the complainant to the opposite party number 2 for depositing it in the PPF account. This was further alleged that she purchased some Kisan Vikas Patra with the assistance of opposite party number 2 for her and her family members, the certificate issued for these KVPs were, subsequently, all discovered to be forged and stolen. The party number 2, who is an employee of party number-1, misappropriated the amount for which the Post office is liable to pay. The complainant submitted this complaint for recovery of the amount and other damages.

    The opposite party No.01 submitted his written statement, in which, he accepted opening of the PPF account and initial deposit of sum of rupees 50,000 and said that the complainant blindly relied on the opposite party number- 2 being employee of O.P. No.01 and did not care to check the ledger from the 2000 to the year 2010, for 10 years. The complainant also did not bother to take back the passbook from the agent.

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According to the opp. party the act of depositing the amount for these 10 years, without verifying the amount at post office is an act of laxity and carelessness on part of the complainant. As per the opposite party No.01 the complainant herself is guilty of negligence for the alleged fraud of the opposing party no.2, otherwise she would have discovered the fraud, had she been a little attentive. The opposing party-1 has said that all the national saving agents appointed as per paragraph 10 of directory, which provides that if any fraud is committed by any agent, it is enquired by the appointing authority, who will, lodge a first information report in police station, after the enquiry.

The national saving agents are appointed by the State Government through District Magistrate of the District concerned as District Saving officers, who is responsible for the act of an agent and the opposite party no.1 that is the post-office is not legally accountable for that. Moreover, the consumer court was not having jurisdiction to entertain such complaint, because the agent for the facility of work of the Post office is appointed by the District Magistrate of the District concerned and the acts of fraud and misdeeds committed by the agent are looked in to, by that authority.  As a result, the so called agent for the works of a Post Office is not in fact his agent. It is also asserted by the opposite party no.1 that the complainant has alleged fraud and forgery in their complaint, therefore, the question involved needs a detailed enquiry, for this reason the consumer commission with summary powers has no jurisdiction to hear and decide this complaint.

          Opposite party number 2 also submitted his written statement, in which he has stated that he deposited all the amount given by the complainant and never defrauded him. The complainant has submitted this false complaint to grab some money from the post office. The complainant is an educated person and cannot do such an act. She was competent enough enquired from the post office and to check the ledger, herself. There is no independent witness substantiate the version of the complainant in her complaint. She has submitted false and frivolous complaint which is liable to be rejected. The opposite party number two sought compensation of Rs. 10,000/- from the complainant for his harassment.

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After giving opportunity of hearing to the parties, the District Consumer Commission(then forum) allowed the complaint and directed the opposing parties jointly and severally to pay to the complainant a sum of Rs. 1,89,,000/- along with annual interest of 6% per annum from the date of filing the complaint till the date of payment within a period of 30 days from the date of judgment.

          Being aggrieved of the judgment the opposite party number one preferred appeal being Appeal No.397/2022.

The complainant also being aggrieved of the judgment preferred appeal being Appeal No. 413/2022 for enhancement.

 It is submitted by the appellant/opposite party No.01 that the District Forum has failed to appreciate the provisions of paragraph 24A of Standardized Agencies is the system, which gives that in the misuse or misappropriation of investors money by an agent the appointing authority concerned should deal with the matter and takes suo-motu prompt action.

It is submitted by the learned Counsel for the appellant/complainant that the learned District Consumer Commission, Varanasi has committed error in not awarding the compensation to the complainant as prayed by the complainant in her complaint. The interest awarded by the learned District Consumer Commission is on the lower side.

          I have heard Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the appellant/opposite party No.01 and Shri Ajay Wahi, learned Counsel for the complainant and perused all the material on record.

          On hearing Counsels for both the parties and on perusal of the records I have considered the following points for disposal of this appeal.

01.Whether the agent Jagat Narayan Mishra was an agent of appellant post office in relation to the third party i.e. the complainant/ respondent for the impugned transactions?

          02.Whether the appellant post office is bound by the impugned acts committed by the agent Jagat Narayan Mishra in taking the deposits  on behalf of the post office ?

          03.Whether the post office is liable for the compensation towards the

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 complainant and the impugned judgment is correct ?

Point  no.1: In the present case, it is alleged by the complainant that the respondent no.2 Jagat Narayan Mishra received Rs.50000.00 cash from the complainant for opening of the said Public Provident Fund account No.10001216. It is further alleged that the agent committed fraud and misappropriated the money tendered to him for further deposits meant for the PPF account. The respondent no.2 also issued fake Kisan Vikas Patras for the complainant and thus, by committing fraud made the complainant loss money to the extent of approx. Rs.4,28,000/-. The appellant/opposite party No.01 in its written statement disputed the authority of the respondent No.2/opposite party  no.2 as their agent and have said that in paragraph 24 A of OM no.FI(53)NS/57 dated 31.12.1959 of Standardized Agency System issued by Ministry of Finance and special circular no.66 date 4.3.1960 of the Director General, Post, it is given that in case of misappropriation of investor's money by an agent, the appointing authority concerned would deal with the matter and take suo motu prompt action on it. It is also contended by the appellant that in the present case, the appointing authority of the respondent no.2 was the District Magistrate/Chief Development Officer, Varanasi. Therefore, the respondent no.2 cannot be assumed as an agent of the appellants and liability of misappropriation of payment made by the complainant cannot be fastened upon them. The Ld. Forum ought to have sought the agreement of appellant and respondent no.2 which might have shown the legal preposition that there is an agreement between the respondent no.2 and appointing authority and they are responsible for the consequences of any misdeed by the agent.

Regarding this argument submitted by the appellant, the provisions of Contract Act on the matter of appointment and authority of an agent should be taken in view because as per the pronouncement of the Hon’ble Apex court in Marine Container Services vs. Gogo Garments published in AIR 1999 SC page 80 (Para 4)  law of contract applies to all litigants in matter of all contractual obligations including the litigants under the Consumer Protection Act,1986.

The provisions of Indian Contract Act, 1872 relating to appointment

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 of agent, it is given in section 182 –

182. “Agent” and “principal” defined.—An “agent” is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal”

Thus, an agent is a person employed to do an act for another or to represent any in dealing with third persons which makes clear that any person who is representing the other person in a business dealing can be assumed an agent for the third persons. In this regard, Section 184, it is given that whoever assumed an agent becomes responsible to his principal according to its provisions of the Act. It is further given in Section 185 that any consideration is not necessary to create an agency most importantly Section 186 of the Contract Act gives that the authority of an agent may be expressed or implied. Defining expressed and implied authority, Section 187 of the Act says that -

187. Definitions of express and implied authority.—An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case.

As per Section 187, implied authority can be inferred from the circumstances of the case and from the ordinary course of dealing between the parties. In this particular case though the agent respondent no.2 was appointed by the District Magistrate, Varanasi as Chief Saving Officer, Varanasi but said agent was doing all the work and handling all the transaction for the Post-Office. He opened PPF account for and on behalf of the complainant and also purchased Kisan Vikas Partra of the appellant for him and for his family members. Therefore, impliedly he was working for and as an agent of the Post Office in relation to the complainant, i.e. the third party. In this regard, the judgment of Hon’ble High Court in Dev Narayan Rao vs. Kukur Bind reported in 1902 ILR 24 Alld. Page 319 is relevant, wherein the Hon’ble High Court pronounced that the authority to an agent may be given by words written or spoken or by conduct of the authority.

Hon’ble Supreme Court in judgment Chairman, LIC vs. Rajiv Kumar

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Bhaskar reported in (2005) 6 SCC page 188 has pronounced that for third party a person can be assumed as an agent of his principal, if the third party has reasons to believe that the person is acting as an agent of that principal. In this particular case before the Hon'ble Court, the employer collected premium of LIC from their  employees, the Hon’ble Apex Court found that the employees has reason to believe that their employer is collecting the premium of insurance as an agent of LIC. The aforesaid pronouncement of Hon’ble Apex Court is applicable to this particular case also. In this matter though the respondent no.2 was appointed by the District Magistrate as per version of the appellant yet he was doing all the transactions and act on behalf of the post office, therefore, for the third party i.e. the complainant, they/he can be characterized as an agent of post office as far as the transactions with the third party i.e. the complainant are concerned. 

On this point, the judgment of Hon’ble NCDRC in Union of India and ors. vs. Arun Borse and ors. reported in 2007 (2) CPJ 165 (NC) can be cited which gives that no doubt the agent might have been appointed by the District Collector who was receiving transactions for purchasing Kisan Vikas Patra and as well as doing transaction of Post Office under small savings scheme. The Hon’ble NCDRC in Para 8 of the judgment said that no doubt the agent might have been appointed by the District Collector, at the same time this is internal arrangement of  appointing agents for collecting money under the small savings scheme between the Union of India and the State Government. It is also true that as per the circular of Standardized Agency System, in case of misappropriation of investor’s money, by an agent, the State Government would bear the loss but this is also an internal arrangement between the Government of India and the State Government but the consumer/complainant is not concerned with the said arrangement and hence, he is entitled to recover the amount from both or any of them as their responsibility is joint and several.

In this particular case, upon guidelines of the aforesaid judgments of the Hon’ble Supreme Court and Hon’ble NCDRC, it can be inferred that though the agent respondent no.2 was appointed by the District Magistrate yet in matter of alleged misappropriation of the amount deposited in PPF account and in issuing fake Kisan Vikas Patra, the liability can be fixed upon

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on the State Government, the appointing authority, as well as in particular  his principal i.e. the post office the appellants Union of India through post office, who are also liable for the loss and compensation to the complainant.

Point No.2:

It is given in Section 226 of the Contract Act that contracts entered into through an agent and obligation arising from the act done by an agent may be enforced and will have the some legal consequences, as if the contract had been entered into by the principal in person. In case of agent exceeding his authority of agent, it is given in section 226 of the Contract Act that when an agent does more than he is authorized to do which is within his authority can be separated from the part which beyond his authority so much only what he does as within his authority is binding between him and his principal. In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acing in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

227. Principal how far bound, when agent exceeds authority.—When an agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.

In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acting in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

238. Effect, on agreement, of misrepresentation of fraud, by agent.—Misrepresentation made, or frauds committed, by agents acting in the course

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of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.

In combined reading of Section 227 and 238 of the Contract Act, it can be visualized that if the third party can make out that the agent is making transactions beyond the authority of agent i.e. for which he has been authorized by the principal then liability of principal towards the third party does not arise but when from the simple transaction, it cannot be made out that the agent is not authorized to do for the transaction, he is making then the principal will liable for any action or misrepresentation committed by the agent.

In this particular case, it is clear from the record that the agent Jagat Narayan Mishra has colluded with the employees of the post office department. FIR for misappropriation, cheating and fraud has been registered against Jagat Narayan Mishra by Ganesh Baranwal vide his letter dated 3.10.2010, a copy of the same is on record as annexure ‘E” of the written statement of the respondent. FIR was also lodged against one Triloki Nath Ram working as Ledger Assistant in the said post office whose bail application was disposed of on 4.1.2012 wherein it was held that there was a collusion between the agent and employees of the post office. Copy of the said order dated 4.1.2012 is on record annexure ‘F’. A copy of FIR annexure ‘G’ of the written statement against Subhash Chandra Chaurasia, Counter Assistant in GPO, Vishesherganj, Varanasi was registered. The bail application of the said employee was also disposed on 4.1.2012, copy of the said order is on record as annexure ‘H’. Similarly, other FIRs were lodged by the complainant and his family members against the agent Jagat Narayan Mishra and employees of the post office which shows that the agent colluded with the employees of the post office so that he was successful in misappropriating the sum deposited in PPF accounts and also issuing fake Kisan Vikas Partras by which heavy loss was incurred to the complainant and his family members for which agent respondent no.2 and appellant as

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his principal both are jointly and severally liable.

In this regard, I rely on  the judgment of the Hon’ble NCDRC in Rajendra Singh Mullik vs. Sr. Branch Manager, LIC reported in 2018(2) CPR 305 (NC). In this case, the complainant alleged that he had deposited a sum of money per year from 11.1.2005 for 8 years till 11.1.2012 and he deposited total Rs.81176.00. It is further submitted by him that the OP LIC refused to pay the deposited amount by saying that the complainant has deposited the amount in Jeevan Nidhi Pension Plan policy. Thus, it was alleged that agent of the OP played a fraud by depositing the amount in wrong policy. The Hon’ble NCDRC giving verdict that there was deficiency on the part of the LIC and their agent. The complainant has suffered unnecessarily. Therefore, he deserves to receive the entire amount along with interest.

It is also held in Haryana Gramin Bank and ors. vs. Jasvinder and ors. reported in IV (2010) CPJ 210 (NC). In the judgment it was pronounced that an employee is vicariously liable for action of employees. It is clear that the postal authorities are liable to provide adequate compensation of the depositors who suffered due to misdeed of its own employees.

On conclusion of the said discussions, it may summarize that in this particular case, the agent of the appellant the post office allegedly misappropriated the amount deposited by the complainant and her family members into PPF accounts and also the agent issued fake Kisan Vikas Partras by utilizing hard earned money of the complainant. Therefore, as principal of their agent, the appellants are liable to make good the loss incurred by the complainant.

Coming to the third point in this particular case, the ld. District Consumer Commission, Varanasi has decreed the complaint of the complainant and issued a direction to the appellant for payment of Rs.1,89,000/- along with 6% simple interest per annum from the date of institution of complaint till the date of payment. The order for direction of recovery of Rs.1,89,000/- with 6% simple interest appears to be sound in my view.

Having gone through the material and evidence available on record

and after perusal of the impugned judgment and order and particularly the

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findings recorded by the learned District Consumer Commission, I am of the opinion that the order passed by the learned District Consumer Commission is fully justified and is correct, as such need no interference and as such is liable to be upheld. The learned District Consumer Commission has taken all care in mentioning the issues in detail and in deciding the same. The appeals are therefore liable to be dismissed.

For reasons recorded above I am of the view that both these appeals have no force and are liable to be dismissed. In this way, the appeal No. 397/2022 filed by the Union of India is liable to be dismissed. Also the appeal No. 413/2022 filed by the complainant is liable to be dismissed. The judgment and order of the learned District Consumer Forum is liable to be confirmed.  

ORDER

          The Appeal No.397/2022 filed by the Union of India is dismissed.

The appeal No. 413/2022 filed by the complainant is dismissed.

          The judgment and order of the learned District Consumer Commission, Varanasi is confirmed. Both parties shall bear their own costs.

Rs.25,000/- deposited by appellant in Appeal No. 397/2022 under Section-15 of the Consumer Protection Act 1986 shall be remitted to the District Consumer Commission, Varanasi alongwith interest if any accrued for disposal in accordance with law.

Let copy of this order be made available to the parties within 15 days positively as per rules.

This judgment shall be placed on the record of Appeal No. 397/2022 with its copy to be laid on the record of other Appeal No. 413/2022.  

                    ( JUSTICE ASHOK KUMAR )

                                PRESIDENT

          Pnt.   

                                                                                                    RESERVED

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                              UTTAR PRADESH, LUCKNOW    

                                 APPEAL NO. 398 OF 2022

      (Against the order dated 19-04-2022 in Complaint Case No.309/2010

                              of the District Consumer Commission, Varanasi)

Union of India

through Senior Post Master,

Visheshwarganj, Post Office,

Visheshwarganj, Varanasi.  

                                                                                           ….. Appellant.

                                                            Versus

01.Ganesh Ji Baranwal

S/o Late Sri Daya Prasad Baranwal

                R/o Village Babusarai, Post Office, Maharajganj,

                Sant Ravidas Nagar, Bhadohi.

                Presently residing at House No. 38/8 Plot No.8

                Raghunath Nagar Colony, Mahmoorganj

                Varanasi

02.Jagat Narayan Mishra

S/o Sri Surya Narayan Mishra,

               R/o C-21/92-93, Mahamandal Nagar,

     Lahurabir,

               Varanasi   

                                                                                                      …. Respondents.

                                                          AND

                                 APPEAL NO. 415 OF 2022

      (Against the order dated 19-04-2022 in Complaint Case No.309/2010

                              of the District Consumer Commission, Varanasi)

Sri Ganesh Ji Baranwal, S/o Late Sri Daya Prasad Baranwal

          R/o Village Babusarai, Post Office, Maharajganj,

          Sant Ravidas Nagar, Bhadohi.

          Presently residing at House No. B. 38/8 Plot No.8

          Raghunath Nagar Colony, Mahmoorganj

          Varanasi

                                                                                                          ….Appellant

  Versus

01.Union of India through Senior Post Master,

     Visheshwarganj, Post Office, Visheshwarganj,

                Varanasi

02. Jagat Narayan Mishra S/o Sri Surya Narayan Mishra,

                R/o C-21/92-93, Mahamandal Nagar, Lahurabir,

               Varanasi  

   ….Respondents

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BEFORE:

HON'BLE MR. JUSTICE ASHOK KUMAR, PRESIDENT

For the Appellant                        :  Sri Krishna Pathak holding brief of

                                                        Dr. Uday Veer Singh, Advocate.

For the Respondents No.1           :  Sri Ajai Wahi, Advocate.

Dated : 28-12-2022

                                            JUDGMENT

PER MR. JUSTICE ASHOK KUMAR, PRESIDENT

These two appeals have been filed under Section-41 of the Consumer Protection Act 2019 against same judgment and order dated 19-04-2022 passed by District Consumer Commission, Varanasi in Complaint Case No. 309/2010 Sri Ganesh Ji Baranwal V/s Union of India and another, as such both appeals are being decided by a common judgment.

Appeal No. 398/2022 has been filed by the Union of India through Senior Post Master, Varanasi who is the opposite party no.1 in the complaint for setting aside the impugned judgment and order passed by the learned District Consumer Commission, Varanasi and to allow the appeal in the interest of justice.

Appeal No. 415/2022 has been preferred by Sri Ganesh Ji Baranwal who is the complainant in complaint to enhance the amount prayed for in the complaint petition modifying the impugned judgment and order dated 19-04-2022 passed by the learned District Consumer Commission, Varanasi.

In Appeal No. 398/2022 Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for appellant appeared and Sri Ajai Wahi, learned Counsel for respondent/complainant appeared.

In Appeal No. 415/2022 Sri Ajai Wahi, learned Counsel for appellant appeared and Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the respondent/opposite party No.01 appeared.

I have heard learned Counsel for the both parties and have gone through the impugned judgment and order as well as records of the case.

Facts of the case stated in brief are that the complainant filed a complaint before the learned District Consumer Commission, Varanasi with the averments that he opened a new account of provident fund at the post

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office, Vishveshwar Ganj, Varanasi i.e. the opposite party number 1 in the complaint, through its agent the opposite party 2, who opened the  account by depositing Rs.60,000/- initially. The opposite party number 2 gave a pass book with the entry of the deposit. The complainant, in order to verify genuineness of the transaction and integrity of the agent, cross-checked the amount in his pass-book with the ledger account of the post-office and found it correct. Later on, he deposited many other sums of money in the PPF account on several dates, detail of all money tendered to be deposited is elaborated in Para 6 of the complaint.

It is alleged that the agent, opposite party number 2 issued fake receipts, for these sums of money proffered by the account holder, but  with these receipts the complainant was satisfied that his money was deposited in the account. As per the complainant, by means of all these deposits, the balance in the PPF account should have been approx. Rs.11,00,000/-. When the complainant compared the ledger book with the passbook, it was found that all the subsequent deposited money was not shown in the ledger book. The complainant alleged that the opposite party number 2, in collusion with a few employees of the post office, embezzled the money, which was given by the complainant to the opposite party number 2 for depositing it in the PPF account. This was further alleged that he purchased some Kisan Vikas Patra with the assistance of opposite party number 2 for him and his family members, the certificate issued for these KVPs were, subsequently, all discovered to be forged and stolen. The party number 2, who is an employee of party number-1, misappropriated the amount for which the Post office is liable to pay. The complainant submitted this complaint for recovery of the amount and other damages.

    The opposite party No.01 submitted his written statement, in which, he accepted opening of the PPF account and initial deposit of sum of rupees 60,000 and said that the complainant blindly relied on the opposite party number- 2 being employee of O.P. No.01 and did not care to check the ledger from the 1993 to the year 2010, for 18 years. The complainant also did not bother to take back the passbook from the agent.

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According to the opp. party the act of depositing the amount for these 18 years, without verifying the amount at post office is an act of laxity and carelessness on part of the complainant. As per the opposite party No.01 the complainant himself is guilty of negligence for the alleged fraud of the opposing party no.2, otherwise he would have discovered the fraud, had he been a little attentive. The opposing party-1 has said that all the national saving agents appointed as per paragraph 10 of directory, which provides that if any fraud is committed by any agent, it is enquired by the appointing authority, who will, lodge a first information report in police station, after the enquiry.

The national saving agents are appointed by the State Government through District Magistrate of the District concerned as District Saving officers, who is responsible for the act of an agent and the opposite party no.1 that is the post-office is not legally accountable for that. Moreover, the consumer court was not having jurisdiction to entertain such complaint, because the agent for the facility of work of the Post office is appointed by the District Magistrate of the District concerned and the acts of fraud and misdeeds committed by the agent are looked in to, by that authority.  As a result, the so called agent for the works of a Post Office is not in fact his agent. It is also asserted by the opposite party no.1 that the complainant has alleged fraud and forgery in their complaint, therefore, the question involved needs a detailed enquiry, for this reason the consumer commission with summary powers has no jurisdiction to hear and decide this complaint.

          Opposite party number 2 also submitted his written statement, in which he has stated that he deposited all the amount given by the complainant and never defrauded him. The complainant has submitted this false complaint to grab some money from the post office. The complainant is an educated person and cannot do such an act. He was competent enough enquired from the post office and to check the ledger, herself. There is no independent witness substantiate the version of the complainant in his complaint. He has submitted false and frivolous complaint which is liable to be rejected. The opposite party number two sought compensation of Rs. 10,000/- from the complainant for his harassment.

          After giving opportunity of hearing to the parties, the District

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 Consumer Commission(then forum) allowed the complaint and directed the opposing parties jointly and severally to pay to the complainant a sum of Rs. 3,06,000/- along with annual interest of 6% per annum from the date of filing the complaint till the date of payment within a period of 30 days from the date of judgment

          Being aggrieved of the judgment the opposite party number one preferred appeal being Appeal No.398/2022.

The complainant also being aggrieved of the judgment preferred appeal being Appeal No. 415/2022 for enhancement.

 It is submitted by the appellant/opposite party No.01 that the District Forum has failed to appreciate the provisions of paragraph 24A of Standardized Agencies is the system, which gives that in the misuse or misappropriation of investors money by an agent the appointing authority concerned should deal with the matter and takes suo-motu prompt action.

It is submitted by the learned Counsel for the appellant/complainant that the learned District Consumer Commission, Varanasi has committed error in not awarding the compensation to the complainant as prayed by the complainant in his complaint. The interest awarded by the learned District Consumer Commission is on the lower side.

          I have heard Sri Krishna Pathak, Advocate holding brief of Dr. Udai Veer Singh, learned Counsel for the appellant/opposite party No.01 and Shri Ajay Wahi, learned Counsel for the complainant and perused all the material on record.

          On hearing Counsels for both the parties and on perusal of the records I have considered the following points for disposal of this appeal.

01.Whether the agent Jagat Narayan Mishra was an agent of appellant post office in relation to the third party i.e. the complainant/ respondent for the impugned transactions?

          02.Whether the appellant post office is bound by the impugned acts committed by the agent Jagat Narayan Mishra in taking the deposits  on behalf of the post office?

          03.Whether the post office is liable for the compensation towards the complainant and the impugned judgment is correct ?

Point  no.1: In the present case, it is alleged by the complainant that

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the respondent no.2 Jagat Narayan Mishra received Rs.60000.00 cash from the complainant for opening of the said Public Provident Fund account No.10000521. It is further alleged that the agent committed fraud and misappropriated the money tendered to him for further deposits meant for the PPF account. The respondent no.2 also issued fake Kisan Vikas Patras for the complainant and thus, by committing fraud made the complainant lose money to the extent of approx. Rs.7,98,000/-. The appellant/opposite party No.01 in its written statement disputed the authority of the respondent No.2/opposite party  no.2 as their agent and have said that in paragraph 24 A of OM no.FI(53)NS/57 dated 31.12.1959 of Standardized Agency System issued by Ministry of Finance and special circular no.66 date 4.3.1960 of the Director General, Post, it is given that in case of misappropriation of investor's money by an agent, the appointing authority concerned would deal with the matter and take suo motu prompt action on it. It is also contended by the appellant that in the present case, the appointing authority of the respondent no.2 was the District Magistrate/Chief Development Officer, Varanasi. Therefore, the respondent no.2 cannot be assumed as an agent of the appellants and liability of misappropriation of payment made by the complainant cannot be fastened upon them. The Ld. Forum ought to have sought the agreement of appellant and respondent no.2 which might have shown the legal preposition that there is an agreement between the respondent no.2 and appointing authority and they are responsible for the consequences of any misdeed by the agent.

Regarding this argument submitted by the appellant, the provisions of Contract Act on the matter of appointment and authority of an agent should be taken in view because as per the pronouncement of the Hon’ble Apex court in Marine Container Services vs. Gogo Garments published in AIR 1999 SC page 80 (Para 4)  law of contract applies to all litigants in matter of all contractual obligations including the litigants under the Consumer Protection Act,1986.

The provisions of Indian Contract Act, 1872 relating to appointment of agent, it is given in section 182 –

182. “Agent” and “principal” defined.—An “agent” is a person

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employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal”

Thus, an agent is a person employed to do an act for another or to represent any in dealing with third persons which makes clear that any person who is representing the other person in a business dealing can be assumed an agent for the third persons. In this regard, Section 184, it is given that whoever assumed an agent becomes responsible to his principal according to its provisions of the Act. It is further given in Section 185 that any consideration is not necessary to create an agency most importantly Section 186 of the Contract Act gives that the authority of an agent may be expressed or implied. Defining expressed and implied authority, Section 187 of the Act says that -

187. Definitions of express and implied authority.—An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case.

As per Section 187, implied authority can be inferred from the circumstances of the case and from the ordinary course of dealing between the parties. In this particular case though the agent respondent no.2 was appointed by the District Magistrate, Varanasi as Chief Saving Officer, Varanasi but said agent was doing all the work and handling all the transaction for the Post-Office. He opened PPF account for and on behalf of the complainant and also purchased Kisan Vikas Partra of the appellant for him and for his family members. Therefore, impliedly he was working for and as an agent of the Post Office in relation to the complainant, i.e. the third party. In this regard, the judgment of Hon’ble High Court in Dev Narayan Rao vs. Kukur Bind reported in 1902 ILR 24 Alld. Page 319 is relevant, wherein the Hon’ble High Court pronounced that the authority to an agent may be given by words written or spoken  or by conduct of the authority.

Hon’ble Supreme Court in judgment Chairman, LIC vs. Rajiv Kumar Bhaskar reported in (2005) 6 SCC page 188 has pronounced that for third party a person can be assumed as an agent of his principal, if the third party

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has reasons to believe that the person is acting as an agent of that principal. In this particular case before the Hon'ble Court, the employer collected premium of LIC from their  employees, the Hon’ble Apex Court found that the employees has reason to believe that their employer is collecting the premium of insurance as an agent of LIC. The aforesaid pronouncement of Hon’ble Apex Court is applicable to this particular case also. In this matter though the respondent no.2 was appointed by the District Magistrate as per version of the appellant yet he was doing all the transactions and act on behalf of the post office, therefore, for the third party i.e. the complainant, they/he can be characterized as an agent of post office as far as the transactions with the third party i.e. the complainant are concerned. 

On this point, the judgment of Hon’ble NCDRC in Union of India and ors. vs. Arun Borse and ors. reported in 2007 (2) CPJ 165 (NC) can be cited which gives that no doubt the agent might have been appointed by the District Collector who was receiving transactions for purchasing Kisan Vikas Patra and as well as doing transaction of Post Office under small savings scheme. The Hon’ble NCDRC in Para 8 of the judgment said that no doubt the agent might have been appointed by the District Collector, at the same time this is internal arrangement of  appointing agents for collecting money under the small savings scheme between the Union of India and the State Government. It is also true that as per the circular of Standardized Agency System, in case of misappropriation of investor’s money, by an agent, the State Government would bear the loss but this is also an internal arrangement between the Government of India and the State Government but the consumer/complainant is not concerned with the said arrangement and hence, he is entitled to recover the amount from both or any of them as their responsibility is joint and several.

In this particular case, upon guidelines of the aforesaid judgments of the Hon’ble Supreme Court and Hon’ble NCDRC, it can be inferred that though the agent respondent no.2 was appointed by the District Magistrate yet in matter of alleged misappropriation of the amount deposited in PPF account and in issuing fake Kisan Vikas Patra, the liability can be fixed upon on the State Government, the appointing authority, as well as in

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particular his principal i.e. the post office the appellants Union of India through post office, who are also liable for the loss and compensation to the complainant.

Point No.2:

It is given in Section 226 of the Contract Act that contracts entered into through an agent and obligation arising from the act done by an agent may be enforced and will have the some legal consequences, as if the contract had been entered into by the principal in person. In case of agent exceeding his authority of agent, it is given in section 226 of the Contract Act that when an agent does more than he is authorized to do which is within his authority can be separated from the part which beyond his authority so much only what he does as within his authority is binding between him and his principal. In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acing in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

227. Principal how far bound, when agent exceeds authority.—When an agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.

In case of fraud and misappropriation by an agent, the principal has been made liable for the transaction as per section 238 of the Contract Act which gives that the fraud committed by an agent acting in the course of business for their principal have the same effect as if such misrepresentation of fraud had been committed by the principal but fraud committed by agent in matter which do not fall within the authority of the agent do not effect their principal.

238. Effect, on agreement, of misrepresentation of fraud, by agent.—Misrepresentation made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements

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made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.

In combined reading of Section 227 and 238 of the Contract Act, it can be visualized that if the third party can make out that the agent is making

transactions beyond the authority of agent i.e. for which he has been authorized by the principal then liability of principal towards the third party does not arise but when from the simple transaction, it cannot be made out that the agent is not authorized to do for the transaction, he is making then the principal will liable for any action or misrepresentation committed by the agent.

In this particular case, it is clear from the record that the agent Jagat Narayan Mishra has colluded with the employees of the post office department. FIR for misappropriation, cheating and fraud has been registered against Jagat Narayan Mishra by Ganesh Baranwal vide his letter dated 3.10.2010, a copy of the same is on record as annexure ‘E” of the written statement of the respondent. FIR was also lodged against one Triloki Nath Ram working as Ledger Assistant in the said post office whose bail application was disposed of on 4.1.2012 wherein it was held that there was a collusion between the agent and employees of the post office. Copy of the said order dated 4.1.2012 is on record annexure ‘F’. A copy of FIR annexure ‘G’ of the written statement against Subhash Chandra Chaurasia, Counter Assistant in GPO, Vishesherganj, Varanasi was registered. The bail application of the said employee was also disposed on 4.1.2012, copy of the said order is on record as annexure ‘H’. Similarly, other FIRs were lodged by the complainant and his family members against the agent Jagat Narayan Mishra and employees of the post office which shows that the agent colluded with the employees of the post office so that he was successful in misappropriating the sum deposited in PPF accounts and also issuing fake Kisan Vikas Partras by which heavy loss was incurred to the complainant and his family members for which agent respondent no.2 and appellant as his principal both are jointly and severally liable.

In this regard, I rely on  the judgment of the Hon’ble NCDRC

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in Rajendra Singh Mullik vs. Sr. Branch Manager, LIC reported in 2018(2) CPR 305 (NC). In this case, the complainant alleged that he had deposited a sum of money per year from 11.1.2005 for 8 years till 11.1.2012 and he deposited total Rs.81176.00. It is further submitted by him that the OP LIC refused to pay the deposited amount by saying that the complainant has deposited the amount in Jeevan Nidhi Pension Plan policy. Thus, it was alleged that agent of the OP played a fraud by depositing the amount in wrong policy. The Hon’ble NCDRC giving verdict that there was deficiency on the part of the LIC  and their agent. The complainant has suffered unnecessarily. Therefore, he deserves to receive the entire amount along with interest.

It is also held in Haryana Gramin Bank and ors. vs. Jasvinder and ors. reported in IV (2010) CPJ 210 (NC). In the judgment it was pronounced that an employee is vicariously liable for action of employees. It is clear that the postal authorities are liable to provide adequate compensation of the depositors who suffered due to misdeed of its own employees.

On conclusion of the said discussions, it may summarize that in this particular case, the agent of the appellant the post office allegedly misappropriated the amount deposited by the complainant and her family members into PPF accounts and also the agent issued fake Kisan Vikas Partras by utilizing hard earned money of the complainant. Therefore, as principal of their agent, the appellants are liable to make good the loss incurred by the complainant.

Coming to the third point in this particular case, the ld. District Consumer Commission, Varanasi has decreed the complaint of the complainant and issued a direction to the appellant for payment of Rs.3,06,000/- along with 6% simple interest per annum from the date of institution of complaint till the date of payment. The order for direction of recovery of Rs.3,06,000/- with 6% simple interest appears to be sound in my view.

Having gone through the material and evidence available on record

and after perusal of the impugned judgment and order and particularly the

findings recorded by the learned District Consumer Commission, I am of the opinion that the order passed by the learned District Consumer

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Commission is fully justified and is correct, as such need no interference and as such is liable to be upheld. The learned District Consumer Commission has taken all care in mentioning the issues in detail and in deciding the same. The appeals are therefore liable to be dismissed.

For reasons recorded above I am of the view that both these appeals have no force and are liable to be dismissed. In this way, the appeal No. 398/2022 filed by the Union of India is liable to be dismissed. Also the appeal No. 415/2022 filed by the complainant is liable to be dismissed. The judgment and order of the learned District Consumer Forum is liable to be confirmed.  

ORDER

       The Appeal No.398/2022 filed by the Union of India is dismissed.

                 The appeal No. 415/2022 filed by the complainant is dismissed.

       The judgment and order of the learned District Consumer Commission, Varanasi is confirmed. Both parties shall bear their own costs.

Rs.25,000/- deposited by appellant in Appeal No. 398/2022 under Section-15 of the Consumer Protection Act 1986 shall be remitted to the District Consumer Commission, Varanasi alongwith interest if any accrued for disposal in accordance with law.

Let copy of this order be made available to the parties within 15 days positively as per rules.

This judgment shall be placed on the record of Appeal No. 398/2022 with its copy to be laid on the record of other Appeal No. 415/2022.  

                    ( JUSTICE ASHOK KUMAR )

                                PRESIDENT

          Pnt.