Negotiable Instruments Act, 1881: ss. 4, 78, 82 – Kisan Vikas Patra Rules, 1988 – rr. 14, 15, 19 Government Savings Certificate Act, 1959 s. 12 – Kisan Vikas Patras – Discharge of certificate – Appellants during the years 1995 and 1996 purchased Kisan Vikas Patras-‘KVPs’ in joint names from various post offices, of combined face value on maturity Rs. 32.60 lacs – However, the KVPs were encashed by one service agent allegedly acting on behalf of appellants at a different post offices before the maturity date at a lower value after the stipulated/lock-in period of holding – Sum of Rs. 25,54,000/- paid by the sub post master, Post Office-respondent no. 4 in cash to the service agent, who cheated the appellants and pocketed the entire amount – Consumer complaint by the appellants – NCDRC, while accepting some negligence on part of respondents in making the payment, dismissed the complaint against the respondents holding that they had acted in accordance with rr. 14 and 15 of the 1988 Rules, since there was no rule at the time of encashment that the KVPs had to be paid by cheque and could not be encashed in cash – However, the service agent, was held liable to pay Rs. 25,54,000/– with interest @ 9% pa – On appeal, held: Post office/bank can be held liable for the fraud or wrongs committed by its employees – Respondents will be held liable for the acts of Sub Post Master during the course of his employment – Payment was made in violation of the statutory mandate of s. 10 and, thus, there is no valid discharge under clause (c) to s. 82 – Furthermore, the service agent not being a ‘holder’, payment to her is not a valid discharge u/s. 78 rw s. 8 – Respondents would have avoided the liability and claimed valid discharge if they had accepted the KVPs with the identity slip or if they had made payment by cross cheque, in which case, they would have satisfied the condition that they had made payment in good faith and there was no negligence, a requirement of clause (c) to s. 82 rw s. 10 – Respondent Nos. 1 to 4 would be jointly and severally liable to pay the maturity value of the KVPs as on the date the KVPs were presented to the post office for encashment – Also appellants entitled to compensation of Rs. 1,00,000/-, as also costs.