Post Office Model Town Jalandhar vs Jaswalsons Investment And Finance P Ltd

THE postal authorities have come up in appeal against the order of the District Forum dated 11.10.2004 by which the complaint of the complainant was allowed in the following terms: ''10. In the present circumstances, they are bound to return the amount of Rs. 1,00,000 with interest @ 12% from the date of maturity till its realisation. Compliance of the order be made within one month from the receipt of the copy of this order. Copies of the order be sent to the parties free of cost under the rules. File be consigned to the record room.''

THE complainant M/s. Jaswalsons Investment and Finance (P) Ltd. Hoshiarpur through its Director Shri Sarabjit Singh had approached the District Forum by way of a complaint that the complainant had purchased 10 Kisan Vikas Patras (in short ''KVP'') from the appellant i.e. Post Office, Model Town, Jalandhar on 2.12.1997. THE face value of each KVP was Rs. 5,000 (total value Rs. 50,000). THE KVPs had been purchased in the name of the complainant mentioned above. THE maturity value of each KVP was Rs. 10,000 after five and a half years. In this case the maturity of the KVPs was on 2.6.2003. THE complainant approached the opposite parties in the complaint for the encashment of the KVPs on maturity but the opposite parties refused to encash the KVPs and make payment of the maturity value of Rs. 1,00,000. THE opposite parties only agreed to pay the face value of the KVPs i.e. Rs. 50,000 instead of Rs. 1,00,000. Alleging deficiency in service on the part of the opposite parties, the complaint was filed for directions to the opposite parties to pay Rs. 1,00,000 as maturity value of the KVPs with interest at the rate of 12% per annum and also to pay Rs. 20,000 as compensation and Rs. 10,000 as costs of litigation. THE complaint was filed on 18.12.2003.

OPPOSITE parties i.e. the postal authorities took the stand before the District Forum that M/s Jaswalsons Investment and Finance (P) Ltd. complainant could not have been issued the KVPs as per Rule 6 of KVPs Rules, 1988 read with DG Post, New Delhi letter No. 61 -11 -65 -SB dated 9.10.1995. No KVPs could be issued in the name of an institution. As such, when KVPs were issued to the complainant on 2.12.1997 these had been issued to unauthorised person and, therefore, no contract had come into being between the complainant and the postal authorities. Under these circumstances, only the original sum, which was invested by the complainant was payable on maturity and no interest thereon was payable. After appreciating the evidence and arguments of both sides the complaint was allowed as aforesaid. Hence the present appeal.

AT the outset, learned Counsel for the complainant (respondent in the appeal) cited recent judgment of the National Commission in Union of India & Others v. Vishav Nath Verma (HUF), I (2005) CPJ 88 (NC) in which the precise point as is involved in the present case has been answered. The only difference in the case before the National Commission and before us is that in that case the purchaser of the KVPs was a HUF through its Karta whereas in the present case it is a Finance Company. KVPs cannot be offered to HUF in the same way these cannot be offered to an institution like the complainant. The judgment of the National Commission reads as under: ''The grievance of the petitioners is that Kisan Vikas Patras could not have been issued to the complainant Vishwanath Verma -Karta (HUF). The complainant -Vishwanath as Karta of HUF purchased Kisan Vikas Patras of amounting Rs. 1,73,000 vide application dated 29.10.1997. Vide Registration No. 20472, Kisan Vikas Patras of value Rs. 46,700 were issued. They matured for payment and the payment was not made. The complaint was filed. 2. There may be some force in the submission of the learned Counsel for the petitioners that HUF could not have taken Kisan Vikas Patra. 3. Two questions arise for our consideration (i) What shall be the effect of acceptance of the amount and keeping in deposit? And (ii) Whether the petitioners acting through its employees could take advantage of its own wrong? 4. As regards the first point, if the employees have accepted the amount and issued Kisan Vikas Patra technically speaking in terms of the rules pointed out, there would not be a contract but it would resemble a contract covered by the provisions of second part of Section 73 of the Contract Act. It would be mentioned that the deposit was not gratuitous. It may be further mentioned that Section 72 of the Contract Act further provides that a person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it. It would be worthwhile to quote the second part of the consequences in such like matters: Compensation for failure to discharge obligation resembling those created by contract -When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract. Explanation -In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non -performance of the contract must be taken into account.''

If any stretch of imagination, it is not a contract at least, retaining amount issuing Kisan Vikas Patra would amount to a tort. In such circumstances, the complainant would be entitled to return the principle amount under Section 72 of the Contract Act and as regards the interest, the explanation to second part of Section 73 would cover it.

Supposing for the sake of argument, it is assumed that Section 73 also does not apply, could there be a wrong without a remedy. We cannot imagine any such situation and in such a matter, loss has to be estimated and should be estimated in terms of the explanation to the second part of Section 73. In this case, the District Forum has passed an order directing the petitioners to pay an amount of Rs. 3,46,000 which became due at the time of maturity along with the interest @ 9% per annum till the payment of this amount, within one month. This order was confirmed by the State Commission in Appeal No. 525 of 2004. For the aforesaid reasons, we do not feel that there is any substantial reason for us to interfere with the impugned order in exercise of power under Clause (b) of Section 21 of Consumer Protection.''

ACCORDING to us, the aforesaid judgment of the National Commission answers the question against the postal authorities. Incidentally, we may observe that the Advocate who had argued the aforesaid case before the National Commission had also argued the case before us on behalf of the appellants. Learned Counsel for the appellants cited a Single Bench judgment of the Gujarat High Court in Special Civil Application No. 2877 of 2003, Devang Cooperative Housing Society Ltd. v. Sub Post Master, decided on 14.7.2004 to contend that in case the KVP purchased by any person/institution, which is not authorised then as per Rule 13 of KVPs Rules 1988 no interest is payable to such a purchaser. According to us, apart from the fact that we feel ourselves bound by the judgment of the National Commission (supra), we are of the view that the judgment of the National Commission does substantial justice to the person/institution who has invested money in KVP without any misrepresentation or withholding any information from the postal authorities while buying the KVPs. No fraud was played by the complainant while purchasing the KVPs. Take for instance, HUF buys KVPs in a particular year and the Karta thinking that after five and a half years double the amount will be available, which will be spent for the benefit of a member of the HUF like marriage or higher education or the like, can, under such circumstances, after five and a half years the investor be left high and dry? After all, the money has been utilized by the postal authorities for all these years and the payment of interest is not gratuitous or by way of concession. The money of the investor on KVPs may have been spent on the development of the farmers by Government of India. We cannot countenance a situation where under such circumstances the investment would not carry any interest.

CONSEQUENTLY , following the judgment of the National Commission, supra, we uphold the order of the District Forum and dismiss the appeal; however, without making any order as to costs. Order was reserved on 19.7.2005. Be communicated to the parties. Appeal dismissed.