'Customer-Banker Relationship Is Of Mutual Trust' : Supreme Court Quashes Reinstatement Of Post Master Who Embezzled Deposits

The Supreme Court on Thursday (November 13) set aside the reinstatement of the Post Master who was removed from the service for embezzling the depositors amount for its personal use. The Court said mere deposit of the embezzled money will not absolve an employee of the misconduct.

“Relationship of a customer with a banker is of mutual trust. Any account holder will be satisfied once an entry is made in his passbook regarding deposit of any amount by him in the post office where he had maintained the account.”, observed a bench of Justices Rajesh Bindal and Manmohan while allowing the Union Government's appeal against the Rajasthan High Court's decision to reinstate the Respondent-employee who was removed from service in 2014 after a departmental inquiry found him guilty of embezzling depositors' funds.

During the June 2011 annual inspection, officials found that the Respondent had taken money from several account holders for their Recurring Deposit and Postal Life Insurance accounts, made entries and stamps in their passbooks to show valid deposits, but failed to record these in the post office's official ledgers. He misappropriated Rs. 5,266 for personal use, later depositing the amount after the fraud came to light.

A departmental inquiry conducted with full opportunity for defence found the charges proved, relying significantly on the Respondent's own statement dated April 28, 2012, admitting embezzlement.

The Central Administrative Tribunal had upheld the penalty, but the High Court set it aside and ordered his reinstatement. Following this Union moved to the Supreme Court.

Setting aside the High Court's decision, the judgment authored by Justice Bindal observed that the High Court misdirected itself by delving into the merits of the case, which is beyond the scope of judicial review in disciplinary proceedings, adding that since the Respondent admitted about the embezzlement then his excuse of ignorance of law about lack of entry in post office's ledger would not hold good.

“The respondent tried to explain the embezzlement by stating that on account of ignorance of the Rules, the passbooks of the account holders were stamped. Such an explanation cannot be accepted being farfetched. He had been in service for about 12 years. Ignorance of rules of the procedure with so much experience cannot be accepted. There was no defect or error pointed out in the course of inquiry. The High Court had travelled beyond its jurisdiction in trying to explain the admission of the respondent which was nothing else but an afterthought.”, the court observed.

Accordingly, the appeal was allowed.

Cause Title: UNION OF INDIA AND ORS. VERSUS INDRAJ

Citation : 2025 LiveLaw (SC) 1104

Click here to read/download the judgment

Appearance:

For Petitioner(s) :Mr. Brijender Chahar, A.S.G. Mr. Karan Chahar, Adv. Mr. Piyush Beriwal, Adv. Mr. Pallav Mongia, Adv. Mr. Dhruv Sharma, Adv. Mr. Amrish Kumar, AOR

For Respondent(s) :Mr. Rajesh Kumar, AOR Mr. Dhiraj Kumar Sammi, Adv. Mr. Krishan Kant Kumar, Adv.