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1993 Supreme(Raj) 690

RAJASTHAN HIGH COURT
M.B.Sharma, J.
Kamal and Company and Others - Appellant
Versus
Kamla Devi and Another - Respondent
S.B. Civil Second Appeal No. 138 and 245 of 1981 and 78 of 1992.
Decided On : 16-09-1993

The post office authorities and the dealer are jointly and severally liable to the depositors for the amounts withdrawn due to the negligence of the dealer in keeping the passbooks in safe custody and the negligence of the postal authorities in comparing the signatures on the withdrawal slips with the specimen signatures.

Headnote:

POST OFFICE SAVINGS BANK - LIABILITY FOR FRAUDULENT WITHDRAWAL - NEGLIGENCE OF POSTAL AUTHORITIES - LIABILITY OF DEALER FOR LOSS OF PASSBOOK - JOINT AND SEVERAL LIABILITY.

Fact of the Case:

In three separate cases, depositors had opened security deposit accounts with the post office under a Motor Cars Distribution and Sale Control Order. The passbooks, which contained the dealer's authorization for withdrawal, were lost or stolen, and fictitious persons withdrew the funds. The depositors sued the post office and the dealer for the amounts withdrawn.

Finding of the Court:

The court found that the dealer was negligent in keeping the passbooks in safe custody, which facilitated the fraudulent withdrawals. The court also found that the postal authorities were negligent in comparing the signatures on the withdrawal slips with the specimen signatures, which allowed the fictitious persons to withdraw the funds.

Issues: 1. Whether the post office authorities are liable to make the payment to the depositor who has opened security deposit account under Clause 5(2) of the Order, in case the amount has been withdrawn by a fictitious person? 2. Whether for the act of the post-office because loss of the pass-book deposited/pledged with Kamal and Company is due to negligence of that Company and it facilitated the withdrawal of the amount to a fictitious person, whether the Company (Kama) and Company) is also jointly and severally liable to make the payment.

Ratio Decidendi: 1. The post office authorities are liable to make the payment to the depositor who has opened security deposit account under Clause 5(2) of the Order, in case the amount has been withdrawn by a fictitious person, if the postal authorities were negligent in comparing the signatures on the withdrawal slips with the specimen signatures. 2. If the loss of the passbook deposited/pledged with the dealer is due to the negligence of the dealer and it facilitated the withdrawal of the amount to a fictitious person, the dealer is also jointly and severally liable to make the payment.

Final Decision: The court dismissed all three appeals, holding that the dealer and the postal authorities were jointly and severally liable to the depositors for the amounts withdrawn.

JUDGMENT

1. - This judgment will dispose of all the above numbered three second appeals. The following substantial questions of law have been framed in S.B. Civil Second Appeal No. 138/1981 at the time of admission:

1. If the appellant company is liable to the plaintiff whether the responsibility of repayment was solely that of the G.P.C. ?

2. Whether the G.P.C. made the repayment to an unauthorised person, can the appellant company be made liable?

3. Whether the loss of the pass-book has been proved to have been occasioned by theft, if the appellant company is liable ?"

2. So far as S.B. Civil Second Appeal No. 245/1981 Union of India v. Kamla Devi and another is concerned, the learned Judge framed the following questions of law:

"1. Whether the initial burden to prove the plaintiff's case lies on the plaintiff himself or he can get the benefit of weakness of the defendant's case without proving its own case?

2. Whether in the facts and circumstances of the case, the signature on the withdrawal form can be said to be fictitious one in view of the fact that the oral testimony of the plaintiff was rebutted by the defendant's oral testimony and further no evidence of expert was produced by the plaintiff which was available and could be the best evidence to support the plaintiff's case?

3. Whether when the withdrawal form was admitted along with pass book as per rules and the signature of the drawer was verified by the official concerned bonafidely, there is presumption about the valid payment or not ?"

3. In S.B. Civil Second Appeal No. 78/1982, Union of India v. Dr. Narendra Kumar Narang and another, on 21st March, 1983 , the following substantial question of law was framed :

"Whether in the facts and circumstances of this case the concerned employees of the Union of India in the postal department acted with such negligence in allowing the withdrawal of the amount in deposit as to give rise to a civil liability of the master to reimburse the depositor for the loss suffered by it on account of the fraudulent withdrawal?"

4. It will be seen that so far as two appeal Nos. 138/1981 and 245/1981 are concerned, they arise out of the same Civil Suit No. 255/1976 Union of India v. Smt. Kamla Devi and Kamal and Company , which suit was filed for recovery of Rs. 4,000 / -.

5. So far as facts of the case are concerned, they are contained in the judgment of the learned trial court as well as of the learned Appellate Court and suffice to say that so far as civil suit No. 255/1976 is concerned, an application for purchase of a motor car (Fiat - 1100-G) was filed by Smt. Kamla Devi in accordance with clause-5 of the Motor Cars Distribution and Sale Control Order, 1959 (for short the Order) which order was made in exercise of the powers conferred on the central Government under section 18-G of the Industrial (Development and Regulation) Act, 1951 (65 of 1951), as required by sub-clause (2) of Clause 5 of the aforesaid Order Smt. Kamla Devi had opened a post-office saving bank account on 12th September 1973 and the account No. was 1021959. In fact it was a security deposit account with the post-office for a sum of Rs. 4,000/- and the pass-book was pledged with Kamal and Company, the dealer, as required in sub-clause (2) of Clause 5 of the Order.

6. Sub-clause (2A) of clause 5 of the Order provides that when the Motor Car is ready for delivery the dealer shall send intimation of that fact in writing to the pledger applicant along with the Post Office Saving Bank Pass Book and an authority authorising the pledger applicant to withdraw the money from the Post Office. It appears that a theft of the pass-book was committed in the office of Kamal and Co. and in the said pass-book the authority of Kamal and Company, the dealer, authorising the pledger i.e. Smt. Kamla Devi to withdraw a sum of Rs. 4,000/- along with interest from the post office was also there and on the strength of that authority and said amount of Rs. 4,000/- along with interest amount of Rs























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