Post Office Employees Impersonate Authorized Staff in Rs 36.4 Lakh Fraud Involving Fake NSCs and Term Deposits

In a significant ruling, the Madhya Pradesh High Court has ordered the India Post Office to compensate depositors who were victims of a fraud at the Bina branch. The scam involved employees issuing counterfeit National Savings Certificates (NSCs) and term deposit advice slips, resulting in losses amounting to approximately Rs 36.4 lakh. The court’s decision comes after depositors discovered that the documents they received were forged and that no accounts had been opened in their names.

Details of the Fraud

The case unfolded when depositors visited the Bina post office to invest in term deposit accounts and NSCs. Instead of approaching the official counter, they were approached by employees who misrepresented their authority. These employees collected money and provided fabricated account statements and passbooks. The fraud was uncovered when depositors realized that their accounts did not exist. Despite the losses, the Department of Posts refused to reimburse the victims, arguing that the transactions were conducted with an employee who had been transferred and was not officially posted at the branch.

The postal authorities maintained that customers should have verified the employees’ authority before proceeding with their transactions. However, the depositors contended that the fraud was perpetrated by individuals who were indeed employees of the postal department, and thus the department should bear responsibility for the losses incurred.

Court’s Findings

The Madhya Pradesh High Court ruled in favor of the depositors on October 15, 2026. The court found that the depositors acted in good faith, engaging with individuals who were employees of the postal department. The court noted that ordinary depositors could not be expected to know the internal posting arrangements of the department, especially when the employees were present at the post office.

The court emphasized that the depositors had been approached by individuals who were recognized as employees of the Department of Posts. It stated that since the victims acted innocently and opened accounts based on the guidance of these employees, they were entitled to compensation for their losses. The court also referenced a departmental circular from May 27, 2021, which outlines procedures for handling cases where accounts were not legitimately opened or fraudulent passbooks were issued.

Compensation Process

The High Court directed the postal department to process the claims of the victims. The depositors are required to submit the necessary forms to the competent authority within 30 working days. The authority must then examine and process these claims within 90 days. Additionally, the court ruled that the victims would be entitled to interest on their fixed deposits as per applicable laws.