SUPERINTENDENT OF POST OFFICES vs N.NAGA RANGAIAH

THE short question that arises for consideration in this appeal is whether the District Forum was right in holding that the appellants herein, who were the opposite parties in O.P. No. 44/1995, were bound to pay the maturity value mentioned on the National Savings Certificates purchased by the respondent herein, who was the complainant in O.P. No. 44/1995. THE maturity value after six years mentioned in the National Savings Certificates of Rs. 5,000/- denomination is Rs. 10,075/- arrived at on the basis of 12% interest per annum. But in issuing these certificates purchased by the respondent in the year 1988, the issuing Authority failed to take note of the fact that under Government of India Gazette Notification No. 364(E) and G.S.R. No. 365(E) dated 1.4.1987, Rule 19 of the National Savings Scheme was amended with retrospect effect from 1.4.1987 reducing the rate of interest from 12% to 11% per annum. If this rate of interest had been noticed, the maturity value should have been corrected to Rs. 9,505/-. THE respondent was paid the corrected maturity value of Rs. 9,505/-.

THE respondent approached the Ananthapur District Forum for payment of the balance amount together with interest @ 12% per annum from the date of maturity i.e. from 11.10.1994 on ward still the date of payment. THE District Forum allowed the complaint by its order dated 3.1.1998 and held that despite the reduction of the rate of interest with retrospect effect from 1.4.1987 the respondent would be entitled to the entire sum of Rs. 10,075/- mentioned on the certificates on the ground that the appellants are bound to pay what was mentioned in the certificate. THE appellants question the said order of the District Forum before us. The question is no longer res-integra. The Supreme Court by its order dated 1.5.1995 in C.A. No. 11028/95 arising out of Special Leave Petition (Civil) No. 38 of 1995 The Post Master, Dargamitta H.P.O., Nellore v. Ms. Raja Prameelamma, held that the maturity value should be calculated only on the basis of reduced rate of interest of 11%, in view of the restrospective amendment of the rule. The Supreme Court referred with approval to the dissenting opinion expressed by Mr. Y. Krishna, learned Member of the National Commission which is as follows: "It is evident from the definition of the term "deficiency" that it must be a fault, imperfection, short-coming or inadequacy in the quality, nature and manner of performance which is required to be maintained under a law or has been undertaken to be performed in pursuance of a contract. In fact of the notification issued by the Ministry of Finance, Government of India on 1.4.1987 i.e. prior to the date of issue of the certificates, the erroneous indication of a higher rate of interest and a higher maturity value cannot be deemed to be a deficiency in service with reference to the law governing the sale of National Savings Certificates. As regards the contract, no doubt the sale of National Savings Certificates with the terms and conditions embodied thereon constitutes a contract between the Government of India as seller and the holders of the National Savings Certificates. But as this contract was contrary to the terms notified by the Government of India and this was due to inadvertence of the staff. In my opinion, it does not become a contract binding the Government of India being unlawful and void. As such this is not a case of deficiency in service either in terms of the law or in terms of the contract as defined in Section 2(1)(g) of the Consumer Protection Act."

In view of the decision of the Supreme Court, the order of the District Forum dated 3.1.1998 in O.P. No. 44/1995 has to be set aside and accordingly it is set aside. O.P. No. 44/1995 is dismissed and the appeal is accordingly allowed. No costs. Appeal allowed. ______________