NOVA INDUSTRIES PRIVATE LIMITED vs GENERAL POST OFFICE

THIS is an appeal filed against order dated 3.11.2003 passed by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter referred to as the District Forum) in Complaint Case No. 1207 of 2001. The District Forum partly allowed the complaint and awarded a sum of Rs. 5,000/- as compensation along with Rs. 1,000/- as costs of litigation.

THE appellant invested a sum of Rs. 5,000/- in National Saving Certificates (for short hereinafter referred to as NSCs) and obtained six NSCs from the General Post Office, Sector 17, Chandigarh. THE NSCs are dated 26.10.1995. Certificates bearing Sr. No. 07EE261754 to 07EE261758 are of the value of Rs. 10,000/- each while Certificate bearing No. 07DD511219 is for a sum of Rs. 5,000/-. THE maturity value of the NSCs of Rs. 10,000/- was Rs. 20,150/- whereas the maturity value of the NSCs of Rs. 5,000/- was Rs. 10,075/-. THEse certificates were to mature on 26.10.2001 i.e. after a lapse of six years from the date of issue, which is 26.10.1995. THE appellant presented these NSCs on their being matured at the General Post Office, Sector 17, Chandigarh and prayed for the payment of the amount of maturity. THE Post Office, however, found that the NSCs were issued regularly in contravention of rules and as such, no interest was admissible on the NSCs. THE appellant was entitled to simple interest on the face value of the certificates at the same rate as admissible for the time being in force of the type of saving Bank account which such holder was entitled to open under the provisions of the Post Office Saving Account Rules or interest as applicable to the Saving Bank Account. Reference was made to the relevant rule in Para 4 of the reply wherein the NSCs 8th Issue could be issued in favour of individuals and trusts only w.e.f. 1.4.1995. It had been decided to discontinue the issue of these NSCs to institutions w.e.f. the said cut-off date i.e., 1.4.1995. Reference was also made to the Director General, Posts letter No. 61-11-95-SP dated 9.3.1995 which prescribed the procedure for regularization of irregular issue of NSCs, which provided, inter alia that as soon as irregular issue of NSCs (IV or V) & (VI or VII, Issue) is detected, the holder should at once be made aware of the consequence in terms of Rule 10 of National Savings Certificates (IV-Issue) Rules, 1970, National Savings Certificates (VI Issue) Rules, 1978 and National Savings Certificates (VII-Issue) Rules, 1981. The holder should also be apprised of the alternative of encashment of irregularly issued NSCs with face value of the certificates at the same rate as admissible for the time being under the provisions of the Post Office Savings Account Rules, 1981.

Such a letter was directed to be issued by the Post Master concerned, in the prescribed proforma, which was also annexed as Annexure I. It was provided further that if the holder of the certificate exercises option to accept appropriate SB rate of interest, he will be referred by the concerned PMG/DPS to Department of Posts for obtaining approval of Department of Economic Affairs to such payment of interest and this reference was to be made in the prescribed proforma Annexure II. If the holder of certificate did not exercise option and the holder did not accept appropriate Savings Bank rate, the Post Office will refer the case to Directorate through concerned PMG/DPS for decision if certificates issued irregularly may be discharged without interest as per rules or irregular issue regularized with approval of the Department of Economic Affairs. Reference was to be made in proforma (Annexure II).

IT was admitted that when the appellant/complainant presented the NSCs at the counter, he was intimated that only the face value along with interest as applicable will be paid to the complainant who refused to accept the same. The applicant was informed vide letter dated 16.3.2002 to take the principal amount along with interest applicable but he had not responded to the same. The respondents-O.Ps., on the other hand, initiated the regularization of NSCs to the higher authority. The allegations of deficiency in service were denied. The District Forum held that the NSCs 8th Issue have been issued in the name of the complainant/institution were contrary to the rules and this irregularity in issuance of NSCs came to the notice of the concerned Post Office only when the NSCs were presented for payment of maturity value i.e., after six years of the date of issue. The District Forum recorded a finding that irregular issue of the certificates to the complainant amounted to deficiency in service. The District Forum, however, took a view that it could not set aside a statutory rule nor it could direct the O.Ps. to act in contravention to the statutory rules and relied on the judgment of Hon''ble National Consumer Disputes Redressal Commission, New Delhi (for short hereinafter referred to as the National Commission) in the case of Punjab and Sind Bank v. Smt. Sukhraj Bajwa & Anr., 2003 CTJ 897 (CP) (NCDRC) and allowed the complaint partly.

THE sole point which arises for our decision is whether the irregular issue of NSCs in favour of the institution- M/s. Nova Industries after 1.4.1995, contrary to the relevant rules in force w.e.f. the said cut-off date of 1.4.1995 and not detecting the irregularity for the long period of maturity of six years amounted to deficiency on the part of the respondents. THE District Forum has already considered this aspect of the case and recorded a categorical finding about the O.Ps. being deficient in rendering service. This is to be found in Paras 8 and 9 of the impugned order, where the irregular issue of the certificates to the complainant was held to be amounting to deficiency in service. Ms. Deepali Puri, Advocate appearing for the respondents i.e., General Post Office and Post Master, General Post Office could not show to us any material from the file of the complaint case from which it could reasonably be inferred that the respondents-Department was vigilant in detecting the irregular issue of the NSCs after 1.4.1995 and in apprising the complainant about the irregular issue of the NSCs and acting in accordance with the procedure as laid down by the rules referred to above. The Hon''ble National Commission in the case of Punjab and Sind Bank v. Smt. Sukhraj Bajwa & Anr. (supra) held, inter alia, as under : "........In our view they have not cared to go into the question that if contrary ab-initio is against the authority on the subject then the contract loses its value to that extent and cannot be enforced......."

In Para 4, the Hon''ble National Commission further held as under : "4. The deficiency albeit on account of inadvertence of giving interest @ 13% has been admitted by the Bank causing loss and agony-both mental and physical to the complainant. We consider it equitable if the opposite party Bank is directed to pay Rs. 50,000/- as compensation for the deficiency on their part and we order accordingly, which shall be payable by the Bank to the complainant along with interest @ 10% from 8.6.1996."

IT is well settled principle of law that the Consumer Disputes Redressal Agencies cannot enforce the terms of the NSCs issued contrary to the rules and direct the O.Ps. to pay the maturity value of the NSCs after the period of maturity i.e., six years w.e.f. 26.10.1995 because that would tantamount to either ordering contrary to the rules issued by the Department or treating such rules as nullity. However, it cannot also be ignored that due to the deficiency in service on the part of the respondents, the complainant was put to loss both financial as well as mental agony caused to the functionaries of the appellant/complainant as the appellant/complainant was deprived of the use of the sum of Rs. 55,000/- invested way back on 26.10.1995 for a period of six years up to 26.10.2001. The appellant/complainant is thus entitled to be compensated by awarding an adequate compensation for the loss suffered and for mental agony and physical harassment resulting from the deficiency in service on the part of the respondents.

THE District Forum has, however, awarded a paltry sum of Rs. 5,000/- as compensation, which as contended by the learned Counsel for the appellant/complainant, Mr. Pankaj Chandgothia, Advocate was grossly inadequate. Mr. Pankaj Chandgothia, Advocate submitted that in the instant case, the loss which actually caused to the appellant was to the tune of Rs. 55,625/- and the District Forum should have awarded that amount of Rs. 55,625/- as compensation. We find considerable merit in the submission of Mr. Pankaj Chandgothia, Advocate. Resultantly, the appeal is allowed and the impugned order of the District Forum is modified to the extent that the respondents are directed to pay a sum of Rs. 55,625/- as compensation with interest @ 6% per annum from the date of maturity till its payment, besides refunding the principal amount of Rs. 55,000/-, if not already refunded together with costs of litigation of Rs. 1,000/-. The appellant shall get a further sum of Rs. 500/- as costs of litigation in appeal. The O.Ps. are directed to pay the aforesaid amounts within a period of two months from the date of receipt of certified copy of this order. Copies of this order be sent to the parties free of charges. Appeal allowed.