In Brief
Pradeep Kumar and Raj Rani purchased Kisan Vikas Patras (KVPs) from post offices and, seeking to transfer them, entrusted them to Rukhsana, an agent. Rukhsana fraudulently encashed the KVPs for Rs.25,54,000 without authorization. The National Consumer Disputes Redressal Commission dismissed the complaint against the post office, holding it had acted in accordance with rules. The Supreme Court reversed this decision, holding that the post office violated statutory procedures and rules for encashing KVPs (lacking identity slip, proper application, and verification), failed to comply with the requirement to pay by cheque for amounts exceeding Rs.20,000, and acted negligently in both good faith and diligence. The Court held the post office vicariously liable for the fraud committed by M.K. Singh, the Sub-Postmaster, during his employment. The appellants' alleged delay in inquiring did not absolve the post office of its statutory duty to exercise due diligence.
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