JUDGMENT
Rajendra Babu, J.
1. A demand draft was sent in a letter by registered post. An 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 as 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 1st 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 Section 80, C.P.C. was issued on the Union of India, the suit was not maintainable too. It was further contended that in view of Section 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 article 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 standing counsel for the Union of India and the learned counsel for the respondent. Adv, Sri O. Ramachandran Nambiar was appointed as amicus curlae for assisting the Court and he also was heard. For the sake of convenience, parties are referred to as plaintiff and defendants as arrayed in the plaint.
6. The only question for consideration before the Division Bench was whether Section 6 of the Post Office Act conferred total immunity on the Government for the loss sustained by the owner as a result of the fraudulent action on the part of the employee and whether the Union of India could not be made liable for the plaint claim. The evidence In the case was that the 2nd defendant, who was an employee of the postal department, committed fraud by removing the registered letter and the demand draft and encashing the draft through one Mrs. Saroja P. Nair, a financier and advocate. The moot question was whether the Union of India was not liable to compensate for the fraudulent act of the employee by which the addressee, the plaintiff, lost the postal article and whether the employee who committed the mischief alone was liable to compensate. Section 6 of the Post Office Act, 1898 reads :
“Exemption from liability for loss, mis delivery, delay or damage.– The Government shall not Incur any liability by reason of the loss, mis delivery or delay of, or damage to, any postal article in course of transmission by post, except Insofar as such liability may in express terms be undertaken by the Central Government as hereinafter provided; and no officer of the Post Office shall Incur any liability by reason of any such loss, misdelivery, delay or damage, unless he has caused the same fraudulently or by his willful act or default.”
The learned Standing Counsel for the Union of India submitted that the Central Government has got absolute immunity in respect of the loss, misdelivery or delay of or damage to any postal article in the course of the transmission by post in view of Section 6 of the Post Office Act and as such the Government is not at all liable to compensate the loss sustained by the plaintiff. It was further submitted that the loss contemplated under Section 6 of the above Act would Include loss to the Government as well as loss to the owner and as the postal article was lost so far as the plaintiff was concerned, there was total immunity in view of Section 6 of the Act and thereby the Government was not liable to compensate. Advocate Sri O.A. Ramachandran Nambiar argued that the loss contemplated under Section 6 was only loss by the Government or to the Department and it did not take in the loss sustained to the owner. He placed reliance on the decision of the Division Bench of the Calcutta High Court in Union of India v. Sri Narayan Agarwalla, AIR 1955 Cal 371. The question came up for consideration in the above case was whether the Government of India can escape from the liability to pay compensation for the loss caused by the non-delivery of an article it received for carriage and delivery when the article had not been lost by the Government. The Government set up a defence that the particular parcel was taken away by thieves along with other things from the post office. But the State could not establish that the articles were stolen by thieves and that story or contention was not accepted by the Court and it was held that the Government of India cannot escape from the liability to pay compensation for the loss caused by non-delivery of the article it received for carriage and delivery where the article has not been proved to be lost by the Government. There it was held (Para 8) :
“In my Judgment a similar interpretation should be put on the word “loss” in Section 6, Post Office Act and it should be held that “loss” in their section does not mean pecuniary or other loss by the owner of the goods through being wrongfully deprived of the possession or enjoyment there of, but means loss by the postal department of the Government and such loss occurs whenever the department involuntarily or through Inadvertence loses possession of the goods and for the time being is unable to trace them.”
In holding such a view the learned Judge was placing reliance on an earlier decision of the same High Court in East Indian Railway Co. v. Jagpal Singh, AIR 1924 Cal 725, wherein the Court considered the word “loss” under Section 72 of the Railways Act. There it was held that the ‘loss’ contemplated under Section 72 of the Railways Act did not mean pecuniary or other loss to the owner of the goods. Sri O. Ramachandran Nambiar had further argued that the legislature intended to grant exemption only in respect of loss to the Government and it did not contemplate any loss to the owner and the Intention of the legislature is explicit from the very language of the statute. It was further submitted that the deliberate fraudulent acts resulting in the loss, misdelivery or delay or damage due to the fraudulent or willful acts of default from the employees was not at all intended to be exempted from the purview of the tortious liability of the Government, Sri O. Ramacandran Nambiar further submitted that if the legislature wanted to exonerate the liability of the State in respect of loss sustained by the owner of the article, there was no necessity for making specific provision regarding exemption in respect of misdelivery, delay or damage in addition to loss as the misdelivery, delay or damage to the article would be, in fact, a loss to the owner of the article. Cases of misdelivery or delay or damage will necessarily cause loss to the owner. Therefore, if loss meant “loss to the owner”, whether it had been loss to the Government or not, the words “misdelivery or delay of or damage to the article” in Section 6 was redundant.
7. The High Court of Gujarat also has taken the view that ‘loss’ contemplated under Section 6 was loss by the State and it did not take in loss to the owner in Union of India v. M/s. New Vijay Weaving Works, (1974) 15 Guj LR 322. There the learned single Judge of the Gujarat High Court held that by the provisions of the Indian Post Office Act, the department assumes the liability of a carrier and can be described as a statutory carrier and even as per Section 6 of the Indian Post Office Act, fraud and willful act of an officer of the post office does not earn exception contemplated by the section. It was further observed that if fraud and willful act or default cannot save an officer from liability arising from loss etc.. It is difficult to comprehend how such fraud or willful act or default can save the Government from a similar liability and Section 6 was intended to save the Government from the liability of a common carrier and nothing more can be read in the provisions of that section. A postal article is entrusted to the postal authorities for its safe carriage and delivery to the addressee, and not for its willful damage or destruction or removal. When a postal official willfully does anything which results in its loss or damage, he commits breach of statutory duty in discharge of his functions on behalf of the State and the State, being his employer, cannot avoid its responsibility for the willful wrong done by him to the members of the public. The loss, misdelivery, delay or damage cannot therefore be considered as those resulting from fraud or willful act or default of the postal officials dealing with a postal article. The immunity as per Section 6 of the Act is subject to the exception that it is not applicable in cases where such liability is undertaken in express terms by the Central Government as provided in the Act. So also no officers of the post office shall Incur any liability by reason of the loss, misdelivery, delay or damage unless it was a case Involving the result caused by the fraud or willful act or default. That means the liability of the Central Government is confined to statutory liability expressly undertaken under the provisions of the liability of the postal employees so confined to cases where the loss, delay, misdelivery or damage was the result caused fraudulently or by willful act or default. The postal department in fact is liable for the tortious acts of its officials committed during the course of their duty with regard to the postal articles entrusted to their care.
8. In Union of India v. Firm Ram Gopal Hukam Chand, AIR 1960 All 672 the learned single Judge of the Allahabad High Court had considered the scope of Section 6 of the Post Office Act and held that Section 6 of the Post Office Act providing that Government shall not be liable for the loss, damage, non delivery or misdelivery of postal articles entrusted to its charge was intended by the legislature to serve as shield for the protection of the post office and its officials in the legitimate discharge of their functions, but the shield cannot be converted into a weapon of Inequity in the hands of a Government Department enjoying a monopoly of an essential service Section 6 does not empower the post office or its officials to do what they like with the articles entrusted to their care or commit wrongful acts against the owners of those articles. There it was held that the post office was liable to the sender for the value of the article which was entrusted to its care and in respect of which it cannot claim exemption under Section 6. In a subsequent decision another learned Judge of the Allahabad High Court took a contrary view in Union of India v. Ramji Lal. AIR 1965 All 184.
9. By virtue of the provisions of the Indian Post Office Act the Department has the liability of a statutory carrier and it was not exercising any sovereign functions as it was enjoined In England. The jural relationship between the sender and the post office in respect of the carriage of goods sent by the sender under VPP system was held by the Supreme Court to be that of an agent of the sender for the recovery of the price and if it fails to recover the price and deliver the goods, it is liable for damages to the sender. Commr. of Income-tax, Delhi v. P. M. Rathod and Co., AIR 1959 SC 1394. A similar aparoach was taken by the Supreme Court in Union of India v. Amar Singh. (1960) 2 SCR 75 : (AIR 1960 SC 233). But a different view was taken by the Supreme Court In Union of India v. Mohd. Nazim, AIR 1980 SC 431. Anyway we are not concerned with the above question in the present case. By Section 6 of the Act the Government is saved of the liability of a common carrier and it did not confer or empower the postal authorities to deal with the article entrusted in any manner they like. When a postal official willfully or fraudulently does anything which results in the loss or damage, he commits breach of a statutory duty in the discharge of his unction on behalf of the State, The State, being the employer, cannot avoid its responsibility for the willful wrong done by the employee to the members of the public. Hence it cannot be said that the legislature Intended an outright exoneration of the liability of the State when loss is occasioned to the owner of the vehicle and the loss contemplated under Section 6 can only be in respect of the loss by the Government. In the present case the employee of the postal department had fraudulently and willfully removed the postal article and took away the demand draft and utilised for his own benefit. So far as the department is concerned. It cannot be said that the postal article was lost in the course of transmission. In fact, the postal article was with its employee and he utilised it for his own benefit and as such there is no loss by the Government, though there is a loss suffered by the owner. We respectfully adopt the view taken by the High Courts of Calcutta and Gujarat that the loss contemplated under Section 6 is loss to the Government and not loss to the owner of the postal articles. The approach taken by the Courts below in decreeing the suit as against the Government and the department has to be Justified and we find no reasons to Interfere with the above decree. The Government is liable to compensate for the loss sustained to the plaintiff as a result of the willful act committed by its employee, the 2nd defendant. The question of law referred to us is answered accordingly. We place on record our appreciation for the co-operation and the laborious work done by Sri O. Ramachandran Namblar.