The District Consumer Disputes Redressal Commission in Mathura has held the Department of Posts liable for serious deficiency in service, negligence and unfair trade practice in a case involving the fraudulent closure of a customer’s postal savings account, forged signatures and unauthorised transfer of money at the Chaukham Sub Post Office in Arunachal Pradesh.
In its judgment dated May 23, 2026, the Commission partly allowed the complaint filed by Dr. Rajendra Kumar Varshney and directed the postal authorities to pay him the maturity amount of his affected recurring deposit account, refund an illegally deducted sum, pay interest, compensation for mental harassment and litigation costs. The order also directed corrections to the official records of the affected accounts.
According to the latest update provided in the case material, the Department of Posts has so far failed to comply with the judgment and decree order.
Forged Signatures Led to Fraudulent Account Closure
According to the judgment, Dr. Varshney had maintained a postal savings account at Chaukham Sub Post Office in Namsai district. He had also opened a Monthly Income Scheme account in April 2013 by depositing Rs 4,00,500. Interest generated from the MIS account was linked to a recurring deposit account through automatic monthly credits.
The dispute arose after the complainant handed over his passbooks for necessary entries and later became suspicious when their return was repeatedly delayed. A departmental inquiry subsequently found that his signatures had allegedly been forged and the MIS account prematurely closed without his authorisation.
The judgment records that Rs 4,00,500 from the MIS account was transferred to another account. Since the recurring deposit depended on automatic credits from the MIS account, the unauthorised closure also disrupted the linked RD account.
A criminal case was registered in connection with the alleged fraud under provisions relating to criminal breach of trust, cheating, forgery and corruption, and was later transferred to the CBI.
Commission Rejects Postal Department’s Defence
The Commission observed that the Postal Department could not escape responsibility merely by treating the transaction as a premature closure and returning part of the money after making deductions.
It found that the MIS account could not legitimately be regarded as voluntarily closed when the closure itself had resulted from forged signatures and an unauthorised transfer. The Commission said the MIS account should therefore be treated as having continued until its actual maturity date of April 8, 2018.
The linked RD account was similarly directed to be treated as having operated regularly and matured as scheduled. The Commission held the 2 per cent deduction made from the MIS proceeds to be illegal and unjustified.
The judgment said employees of a public institution entrusted with citizens’ savings carry a high degree of responsibility for caution, transparency and honesty. It found that the conduct in the case amounted to serious deficiency in service, negligence, unfair trade practice and breach of consumer trust.
Payment Ordered Within 45 Days, Compliance Still Awaited
The Commission directed the opposite parties, jointly and severally, to pay Dr. Varshney Rs 2,08,467 as the maturity amount of the RD account and Rs 8,010 as the residual principal amount deducted from the MIS account.
It further ordered simple interest at 5 per cent per annum on the total Rs 2,16,477 from April 8, 2018 until actual payment. The complainant was also awarded Rs 50,000 as compensation for mental agony, harassment, negligence and deficiency in service, along with Rs 25,000 towards litigation expenses.
The order required payment within 45 days from receipt of the certified copy. In case of default, simple interest at 7 per cent per annum would become payable on the entire amount due from the date of judgment until actual realisation.
The postal authorities were also directed to record the MIS account as an “Unauthorized/Fraudulent Premature Closure”, treat the RD account as regularly matured and correct all related account records within 60 days. The judgment expressly allowed the complainant to initiate execution proceedings under Sections 71 and 72 of the Consumer Protection Act if the order was not complied with.
Click Here to Read the Judgment
Despite the detailed directions and specified compliance period, the latest update states that the Department of Posts has not yet complied with the judgment decree, leaving the complainant still awaiting execution of the relief granted by the consumer commission.
