Narayandas Mundra vs POST MASTER

THE short question requiring decision in this Revision Petition, preferred by the Complainant, is whether he is entitled to receive interest on the subscriptions, made by him in his Provident Fund Account (PPF), opened under the Public Provident Fund Scheme, 1968, framed in terms of Section 3 of the Public Provident Fund Act, 1968, after the expiry of maturity period of 15 years, from the end of the year in which the initial subscription was made. On 30.3.1991, the Complainant opened a PPF Account in Head Post Office, Dewas and continued making regular subscription in the Account. The maturity period for the account ended on 31.3.2006. The Complainant claims that on 10.1.2007, he exercised option to maintain the account and continue to subscribe for a further block period of 5 years, by submitting, requisite "Form H" and deposited Rs. 70,000 each on 3.8.2006 and 5.9.2007, which amounts were duly credited to his account along with interest for the years 2006 -07 and 2007 -08. According to the Complainant, when he visited the Post Office on 15.7.2008, for withdrawal of some amount from the said account, there was exchange of unpleasant words between him and the Post Master who, in retaliation, declared the account as irregular on the ground that "Form H", a mandatory requirement for continuation of PPF account for a further block of five years, had not been filed. Entries for the interest relating to the years 2005 -06 to 2007 -08, credited in the said account, were reversed. Having failed to elicit a positive response to his plea that "Form H" had in fact been filed, the Petitioner filed a complaint in the District Consumer Disputes Redressal Forum, Dewas seeking a direction to the Post Office for payment of interest on the amounts deposited after 31.3.2006, amounting to Rs. 31,035, along with interest on the said amount @ 12% p.a. with effect from 1.9.2008.

THE District Forum came to the conclusion that in the absence of any document evidencing filing of "Form H" and in light of clarification (MOF (DEA) letter No. F/8/88 -NS -II dated 11.8.1992 on Rule 9(3A) of the Scheme, it could not be held that there was any deficiency in service on the part of the Post Office in not paying interest to the Petitioner after the expiry of initial period of 15 years. The complaint was dismissed accordingly. Being unsuccessful before the State Commission, the Petitioner has preferred this Revision Petition. We have heard the Petitioner and learned Counsel for the Postal Authorities.

THE main thrust of the arguments of the Petitioner is that even if it was assumed that "Form H" had not been submitted by the Petitioner, even then having accepted subscription for three years after the expiry of initial period of 15 years, i.e. on 31.3.2006, the account was deemed to have been extended for a further block of five years and, therefore, the Petitioner was entitled to receive interest at the applicable rate on all the amounts deposited in the account in question. To buttress the submission, strong reliance was placed on para 7 of the clarifications issued by the Ministry of Finance from time -to -time, which stipulates that the Accounts Offices should not accept further subscriptions from the Account holder, whose accounts have matured unless they give option in "Form H" to continue the account. The circular mandates that for this purpose, a list of such accounts, shall be prepared and kept with the Counter Assistant so that it may be referred to when deposits in such accounts are received. The list is required to be updated on 1st April each year.

IN order to appreciate the stand of the Petitioner in the right perspective, it would be apposite to take note of the two relevant clarifications, which read as follows: "5. According to Rule 9(3A) and (3B) the subscriber can continue to make deposits after the maturity of an account for one or more further blocks of 5 years without any loss or benefit. For this purpose, he will give his option in writing to the Accounts Office in Form H within one year from the date of maturity of the account. If the subscriber fails to give his option to continue the account within one year but continues to make deposits in the account, these deposits will be treated as irregular deposits and will not carry interest. Further, these deposits will not earn rebate under Section 88 of the Income Tax Act unless the account is regularized by the Ministry of Finance (DEA). For this purpose, the subscriber will have to write to the MOF (DEA). NS Branch through the Accounts Office for regularizing the account which was continued by him without giving the option.

"(7) The accounts offices should not accept further subscriptions from the account holders whose accounts have matured unless they give option in Form H to continue the account. For this purpose they should prepare a list of such accounts which should be kept with the counter Assistant so that it may be referred to when deposits in such accounts are received. The list should be updated on 1st April each year."

Clarification (5) is unambiguous. It clearly postulates exercise of option, in writing to the Accounts Office, in the prescribed "Form H" for continuation of the matured account for one or more blocks of five years. If the account holder fails to give option, any further deposit(s) in the matured account is to be treated as irregular deposit(s) in the account, and it will neither carry interest nor earn rebate under Section 88 of the Income Tax Act, 1961. Nevertheless, the question for consideration is whether acceptance of these subscriptions by the Post Office after the account had matured, in violation of clarification (7) tantamount to automatic continuation of such an account?

IN our opinion, in the light of clarification (5), which clearly envisages exercise of option in writing, acceptance of further subscriptions cannot be construed as deficiency in rendering service on the part of the Post Office, as alleged, entitling the Petitioner to receive normal interest at a rate applicable to regular PPF accounts.

HAVING arrived at the said conclusion, the next question is whether on facts at hand, particularly when after the maturity of the account, three yearly subscriptions were accepted in violation of clarification (7), the Petitioner is entitled to any interest on the amount which became due for payment on maturity on 31.3.2006 but remained with the Post Office for three years and on further three subscriptions paid thereafter.? In our view, insofar as the question of payment of interest on the amount due on maturity is concerned, Clarification (4) contemplates such a situation. It provides, that if a subscriber retains his account after maturity without making any further deposits, it is not necessary to give any option, as envisaged in clarification (5) and the balance amount in the account will continue to earn interest at the normal rate. Hence, we are of the opinion that the Petitioner would be entitled to interest at the normal rate applicable to a PPF Account, on the amount standing to his credit from the date of maturity till its actual release. However, as regards, payment of interest on the amounts deposited after the date of maturity of the account on 31.3.2006, since these amounts also remained in the coffers of the Post Office, the Petitioner will be entitled to interest at the rate admissible on a Savings Account at the time of each deposit, from the date of deposit till the date of refund of the said subscriptions. Accordingly, we direct the Respondent to re -compute the interest payable to the Petitioner in terms of this order and pay the same to him, within eight weeks from today, failing which the Respondent shall be liable to pay interest @ 9% p.a. on the amounts deposited after 31.3.2006. However, having regard to the circumstances of the case, we do not find any justification for award of compensation to the Petitioner. The Revision Petition stands disposed of, with no order as to costs.