R. Rajendra Babu, J.

A demand draft was sent in a letter by registered post. A employee of the postal department. instead of delivering the letter to the addressee. fraudulently removed the letter and the demand draft and encashed the draft. The question for consideration is whether the Union of India and the postal department are liable to compensate the loss sustained by the owner due to the non-delivery of the demand draft by the fraudulent act of their employee. When the matter came up before the learned Single Judge. considering the importance of the question and as there was no uniformity in the decisions of the courts. the matter was referred to the Division Bench.

2. The Posts and Telegraphs Department and the Union of India (defendants 1 and 3 in O.S.473/81 before the Sub Court. Trivandrum) filed the second appeal challenging the decree passed in the above suit which was confirmed in appeal -A.S.96/86 - by the District Court. Trivandrum. The plaintiffs husband one Sreedharan sent a registered letter dt.11.4.75 containing a demand draft for Rs. 4000/- drawn on the Indian Overseas Bank. Varkala Branch. The letter was received in the Railway Mail Service Office at Trivandrum on 15.4.1975. but it was not delivered to the addressee. the plaintiff. The 2nd defendant one Sukumaran Nair. who was employed as a sorter in the R.M.S. Office. fraudulently removed the registered letter and handed over the demand draft to one Mrs. Saroja P. Nair. a financier and advocate. for encashment and got the draft encashed on 21.4.75. The plaintiff lodged a complaint to the police and the postal authorities regarding the mischief committed by the 2nd defendant. Later. the 2nd defendant was convicted in the criminal case that was registered against him and others. As the plaintiff filed an objection before the Syndicate Bank through which Mrs. Saroja P. Nair presented the draft for collection; the bank withheld the amount and kept it with them without making payment to Mrs. Saroja P. Nair. The postal authorities disclaimed the liability for the value of the draft and damages and accordingly the plaintiff filed the suit for recovery of Rs. 4000/-being the amount of the draft and the interest thereon and also Rs. 2000/- by way of damages for the loss and injury sustained by her. The suit was originally instituted against the Post and Telegraphs Department. represented by the Postmaster General at Trivandrum. and the 2nd defendant who removed the draft. Due to the objection that the suit was not

properly instituted. the Union of India was impleaded in 1983 as the 3rd defendant.

3. The main contentions put forward by the 1 st defendant in the written statement was that the suit was barred by limitation as the Union of India was not made a party before the expiry of the period of limitation and as no notice under S.80 CPC was issued on the Union of India. the suit was not maintainable to. It was further contended that in view of S.6 of the Post Office Act. there was total immunity to the postal authorities and to the Union of India from all the liabilities for the loss of any postal articles in the course of transmission by post. As fraud had been committed by the 2nd defendant. he alone was responsible for the loss. It was further contended that as the amount was still available with the Syndicate Bank. the plaintiff could get the same from the Bank.

4. The 3rd defendant did not file any separate written statement. The trial court. after considering the evidence. repelled all the contentions put forward by the defendant and decreed the suit as against all the defendants. Defendants 1 and 3 viz.. the Postal Department and the Union of India challenged the decree and judgment in appeal by preferring A.S.96/86 before the District Court. Trivandrum. The appeal was dismissed upholding the decree and judgment of the trial court. Aggrieved by the above judgment and decree. the defendants 1 and 3 have filed this second appeal.

5. Heard the learned