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WHEN agents appointed by the government to mobilise deposits for various saving schemes misappropriate the money collected from consumers, the government has to take responsibility for the actions of the agents and ensure that the clients do not suffer. This was the clear message sent out by the highest court in the country last year in the case of Union of India vs Arun Borse. Obviously, the message has not percolated down to state governments because in a more or less similar case, the affected clients had to wage a long legal battle to get back their money. Expressing its displeasure at this, the national consumer disputes redressal commission has once again reiterated that governments are accountable for any fraud committed by agents appointed by them, and they cannot wriggle out of their liability in so far as the investors are concerned. In fact they have to make good the loss suffered by consumers in such cases without any delay. This case dates back to 2003 and 2004 when Amardeep Kaur handed over a total of Rs 2,30,000 to an authorised agent of the Punjab Government. The amount had to be deposited in six different savings accounts under a national small savings scheme, floated by the Central Government and executed by the state government. As confirmation of his having deposited the amount, the agent, Akhil Gupta, even handed over the passbooks issued by the post office, New Grain Market, Sangrur, to Ms Kaur with the signature of the Sub Post Master, confirming the deposit. He also gave her the coupons for the lucky draw that she was entitled to as a depositor. The coupons were to be issued by the district savings officer, Sangrur, after verification of the deposits. Subsequently, when the fraud committed by the agent with the depositor’s money came to light, Amardeep Kaur learnt that each of her accounts had only Rs 5,000. However, neither the state government nor the post office (or the Central Government) bothered to return her money, forcing her to finally seek the help of the court. Even here, the attitude of the state government and the Central Government towards the depositor was deplorable, to say the least.
Dismissing such contentions and holding both the state and the Central Governments accountable, the court, at the district level, ordered that the amount be refunded along with 9 per cent interest. However, the state consumer commission held that since Akhil Gupta was the agent of the state government, only the state was liable to pay. This was challenged by the state government before the national commission. In a common order disposing of three similar petitions, the national commission, too, held that the state government was squarely liable for the misappropriation of the depositor’s money (The State of Punjab vs Amardeep Kaur, RP NO 3551 of 2008, decided on may 14, 2009). In the case of Arun Borse, the agent had swindled Rs 25,000 paid towards the purchase of Kisan Vikas Patra. The agent had been appointed by the Madhya Pradesh Government under the small savings scheme, and here, too, the postal authorities and the MP Government had put forward similar arguments to escape their liability. In this case, the national consumer disputes redressal commission had held that both the state government and the Central Government were jointly and severally liable (Union of India through the Post Master General, Postal Department, and others vs Arun Borse and others, revision petition number 200 of 2001). What comes out of cases
such as these is that governments that appoint agents do not do a
proper background check. Nor do they have foolproof systems in place
to prevent such frauds. Even when such frauds come to notice, they do
not immediately refund the deposits of consumers. The two orders of
the apex court should wake up the state governments to their
responsibilities towards depositors. Or else, cases such as these will
completely undermine consumer confidence in such schemes.
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Instead
of paying back the money, they argued that a police complaint had been
lodged against the agent for misappropriating the money of the
depositor and, therefore, the issue was sub judice, and the court
could not deliberate on it.