MANJEERA AKSHARA PRABHA vs POST MASTER, HEAD OFFICE

THE complainant deposited a sum of Rs. 80,00,000/- through demand draft bearing No. 699725 dated 19.12.1995 with the Post Master, Sangareddy, the first opposite party and opened a Time Deposit Account for one year in the name of Collector and Chairman, Manjeera Akshara Prabha pursuant to the pamphlet issued by Commissioner, Small Savings, Tilak Road, Abids, Hyderabad. THE first opposite party Post Office received the said money and issued savings bank pass book Account 5777 dated 21.12.1995. After expiry of the one year, the complainant through its letter dated 21.12.1996 requested the first opposite party to pay back the amount of Rs. 80,00,000/- with interest at 10.5 per cent per annum by way of demand draft. Though a cheque bearing No. 535065 dated 24.12.1996 was issued for Rs. 88,73,657.60 ps. but the said cheque was returned when presented for collection with an endorsement "Payment stopped by drawer". THEreupon the complainant by his letter dated 28.12.1996 requested the first opposite party to inform the reasons for stopping payment, whereupon the latter informed him that the time deposit account was opened in contravention of the rules and, therefore, the account was directed to be closed without interest. Hence payment of the cheque amount was stopped. Copy of the Accounts Officer''s letter was enclosed for reference. This complaint is, therefore, filed questioning the action of the first opposite party and seeking payment of Rs. 8,73,657.60 ps. with interest and damages of Rs. 10,000/- and costs.

THE first opposite party in its written version while admitting deposit of Rs. 80,00,000/- through a demand draft dated 19.12.1995 and opening of one year Time Deposit Account in the name of Manjeera Akshara Prabha, Sangareddy stated that during inspection of Sangareddy Head Office by A.O. ICO (SB), Hyderabad Division it was pointed out that opening of account by Institutions has been discontinued from 1.4.1995 vide DG (P) No. 61-11/95/SB dated 9.3.1995 and ordered that the account be closed without allowing any interest. It is further stated that according to Ministry of Finance Notification No. GSR 118-E dated 8.3.1995 communicated in DG (P) Lr. No. 61-11/95-SB dated 9.3.1995 withdrawing the facility of opening of TD Accounts by Associations, Institutions, etc., with effect from 1.4.1995 and the accounts opened in contravention of rules are to be closed without interest, according to SB Rules by Central Government in PO SB Manual Vol. I, but according to DG P&T Lr. No. 48-54/77-SB dated 31.12.1979 and 29.8.1979 interest at the rate of 3 per cent per annum was allowed to be paid on TD Accounts opened by Companies, Societies, etc., in contravention of rules as a special case. Hence on noticing the irregularity in opening of T.D. Account No. 5177 in question, the payment of cheque issued in full payment of principal and interest at 10.5 per cent was stopped and another cheque for the principal amount of Rs. 80,00,000/- was issued by the Post Master on 31.12.1996 in order to avoid inconvenience to the depositors pending receipt of a decision from R.O. Finally instructions were received from R.O. vide PMG (H)/SB-4/SGD/96 dated 6.1.1997 that interest at the rate of 3 per cent per annum should be allowed as a special case, since the first year T.D. Account No. 5177 was opened in contravention of rules. Accordingly the Post Master, Sangareddy vide his letter TD/1YR/5177 dated 10.1.1997 communicated the decision for payment of 3 per cent interest on Rs. 80,00,000/- and requested the complainant to take payment. Therefore, there is no deficiency in service on the part of the first opposite party. The complainant filed his affidavit evidence and also marked Exs. A-1 to A-22. The first opposite party filed counter affidavit.

The point for consideration is whether there is any deficiency in service on the part of the opposite parties ? There is no dispute about the deposit of Rs. 80,00,000/- through demand draft bearing No. 699725 dated 19.12.1995 by the complainant with the first opposite party with a request in his letter bearing No. Adm/48/Accts. dated 19.12.1995 to open a Time Deposit Account for one year in the name of Collector and Chairman, Manjeera Akshara Prabha. Accordingly the first opposite party received the amount and opened one year time deposit account with S.B. pass book account No. 5177. After the due date the complainant through its letter R.C. No. Adm/48/Accounts/MAP/92 dated 21.12.1996 requested the first opposite party to pay back the said amount with interest at 10.5 per cent per annum by way of draft. The first opposite party initially issued a cheque bearing No. 535065 dated 24.12.1996 for Rs. 88,73,657.60 Ps. but later issued instructions to the Bank to stop payment. The contention of the first opposite party is that the account was opened in contravention of the rules and as such it has to be closed without interest. Accordingly another cheque for Rs. 80,00,000/- towards the principal amount was issued by the Post Master on 31.12.1996. It is also the case of the first opposite party that as a special case instructions were received from R.O. vide PMG(H)/SB-4/SGD/96 dated 6.1.1997 to allow 3 per cent on the first year TD Account No. 5177. Accordingly the first opposite party vide his letter TD/1 yr/5177 dated 10.1.1997 communicated the decision for payment of 3 per cent interest on Rs. 80,00,000/- and requested the complainant to take the payment. It is informed us whether the interest at 3 per cent per annum was actually paid or not. Be that as it may.

THE learned Counsel for the first opposite party brought to our notice, copy of Directorate''s letter No. F. No. 61/11/95-SB dated 9.3.1995 circulated in Co. Lr. No. SB/1-4/95 dated 13.3.1995 to the effect that "Ministry of Finance has decided to discontinue investment by Institutions in the Post Office Time Deposit, Kisan Vikas Patra and National Savings Certificate (VIII issue). However, investment by Trusts in these instruments and investment in POTD under Charitable Endowment Account and by Regimental Funds will continue. THEse changes will come into effect from 1.4.1995". Basing on this letter, the learned Counsel for the first opposite party submits that Institution deposits are prohibited with effect from 1.4.1995. This deposit by the complainant Institution was made on 19.12.1995. The learned Counsel for the first opposite party also brought to our notice, the Ministry of Finance of Notification No. 118-E dated 8.3.1995 communicated in DG(P) Lr. No. 61-11/95-SB dated 9.3.1995 withdrawing the facility of opening of TD A/cs by Associations, Institutions, etc., with effect from 1.4.1995. During the inspection of Sangareddy Head Office by A.O. ICO (SB), Hyderabad Region it was pointed out that opening of account by institutions has been discontinued from 1.4.1995 vide DG(P) No. 61-11/95/SB dated 9.3.1995 and ordered that the above account may, therefore, be closed without allowing any interest. Therefore, the question is having allowed to open an account whether the first opposite party can decline to pay interest.

THE first opposite party states in his counter that the counter clerk on duty on 22.12.1995 APM and ledger clerk pleaded ignorance of withdrawal of this facility to the institutions. We are of the opinion that merely because account was opened by the Post Office it cannot be said that it bound to pay interest though such payment contravenes the rules. Reliance is placed on a decision in Special Leave Petition (Civil) No. 38/1995, The Post Master, Dargamitta, H.P.O., Nellore v. Ms. Raja Prameelamma, wherein the Supreme Court accepted the theory that when the contract was contrary to the terms notified by the Government of India, the same would not be binding on the Government being unlawful. In such a situation deficiency in service either in terms of law or in terms of contract as defined under Section 2(1)(g) of the C.P. Act does not arise. As such we are of the view that merely by permitting to open an account contrary to the rules, there is no implied authority to pay interest again contrary to rules which would amount to perpetrating the mistake already committed. Hence in our view there is no deficiency in service on the part of the first opposite party in refusing to pay interest. As already seen the first opposite party has addressed a letter to the complainant agreeing to pay interest at 3 per cent per annum as a special case. If the amount is not paid, the same shall be paid to the complainant within a period of six weeks from today. In other respects, the complaint fails and is accordingly dismissed, but in the circumstances without costs. Complaint dismissed.