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Log on to the Internet and type out the words :"Kisan Vikas Patra". You will see any number of sites, including those hosted by the small savings directorates of state governments, describing the Kisan Vikas Patra as the safest savings instrument. The state government websites also tell you that they have a network of agents to market small savings schemes such as these notified by the Government of India from time to time. In short, the impression that the websites give is that the Kisan Vikas Patra is backed by both the state and the Central governments and there are absolutely no risks associated with these schemes. However, when a problem did arise and an investor lost his hard-earned money put into the scheme, neither the state government nor the Central Government was willing to pay back the investor, forcing him to wage a long legal battle. The apex consumer court’s verdict in this case should make the government realise its responsibility towards the investor and help consumers placed in a similar predicament. It should also force state governments to be more careful as to whom they appoint as agents for collecting the consumers’ money. The case has its origin in Mr Arun Borse’s decision to invest his father’s savings in a Kisan Vikas Patra. He paid the agent duly appointed by the Madhya Pradesh state government under the small savings scheme Rs 25,000 towards the purchase of the savings instrument and got a proper receipt for it too. However, he never got the certificate. The postal authorities who issue the certificate told the District Consumer Disputes Redressal Forum that the agent had played fraud on a number of depositors and they had filed a police complaint and the matter was under investigation. Instead of asking the postal authorities to take responsibility for the agent’s action and pay up, the district forum held that the case did not come under the purview of the consumer court. The consumer court at the state level, however, disagreed and asked both the state and the Central governments to refund Mr Borse Rs 25,000 along with 18 per cent interest calculated from October 31, 1992. Instead of honourably accepting this verdict, the Central Government filed a revision petition before the apex consumer court. It’s contention was that the agents are appointed by the state government and if an agent commits a fraud, only the state government is responsible. The Central Government also quoted from the circular issued by it on the "Standardised Agency System-Issue of receipt books to agents"—-which said that "in the event of any misappropriation of investors’ money by an agent appointed by an appointing authority authorised by a state government, the state government will bear the loss". It, therefore, argued that only the state government was liable to pay for the agent’s fraud and not the Central Government. The National Consumer Disputes Redressal Commission, however, disagreed.Quoting from the receipt issued by the agent, it said the agent had received the money on behalf of the Government of India, National Savings Organisation. Even though the state government appoints the agent through the District Collector, it is done as per the directions of the Government of India and the agent is the agent of the Union of India and not that of the state government, the court said. Referring to the circular on the "Standardided Agency System", the apex consumer court said those were the internal arrangements between the state and the Central governments and the consumer had nothing to do with it. It, therefore, held that both the state and the Central governments were jointly and severally liable. However, while asking them to refund the consumer’s money, it reduced the rate of interest from 18 to 12 per cent. I must say that the Central Government comes out in poor light in this case. A consumer has paid all his savings to an agent appointed by the government to purchase a savings instrument considered most safe. If that money is misappropriated by the agent , it is the duty of the government to immediately ensure that the consumer is not affected and that he gets the certificate without any delay. Later, it can file a case for recovery of the money from the agent. Instead, it fails to give the consumer his money or the certificate and even files an appeal against the verdict of the consumer court, thereby prolonging the misery of the consumer. This was, in fact, an appropriate case for the consumer court to have awarded exemplary damages.
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