UNION OF INDIA & ORS vs NAVNIT N DESAI

This order shall decide the two revision petitions detailed above, which pertain to the same impugned order of the State Commission, dated 27.02.2015. The two revision petitions have been filed separately by both the parties.

The only question which swirls around the present controversy is, whether, the consumers under the "HUF- PPF Scheme" are entitled to receive interest after the Notification/Resolution of the Finance Department dated 13.05.2005.

The facts germane to these cases are as follows. Dr. Navnit N. Desai, the complainant, is the Administrator of ''HUF''. He opened an account with the Post Office, Amareli, in the year 1986. It was to come to an end in the year 2002. He moved an application for extension of time for the year 2007-2008. The complainant went on depositing the amount in the said account, till the year 2009. All the amounts were received by the employees of the Postal Department.

However, in the year 2010, when the applicant tried to deposit the amount in his PPF account, the Post Master, OP3, refused to accept the same. The complainant was not aware of the same. However, on 23.04.2010, the OP3 sent a letter for getting the verification of the Pass Book. OP3 contended that the said account was not extended after 12.05.2005, even though the complainant was paid interest up to the said amount after the period of 13.05.2005. On 11.01.2011, the amount of Rs.24,98,026/- was paid to the complainant and the amount of Rs.6,21,636/- was deducted from the said principal amount, illegally. The complainant has served notice and ultimately filed the complaint with the District Forum.

The case of the OPs is that during the audit inspection dated 13.04.2010, it was found that during the verification of the PPF account, the account of the complainant continued till 31.03.2007, illegally and irregularly. They admitted that the amount was received and the interest was credited in favour of the complainant. However, the account was closed and the interest was recovered for the period from 2007 to 2009 to 2009-10. It was also explained that the account was opened for five years after the year of 2002 and the same was closed on 31.03.2007. As per Notification of the Finance Department, vide No. F.2/8/2005-NS-II, dated 13.05.2005, the HUF''s PPF Account was opened prior to amendment dated 13.05.2005 and if such an account was not closed, the same will have to be continued till 31.03.2011. However, no interest amount could be paid even though the complainant continued the account illegally and irregularly for the period of five years from 31.03.2007. Consequently, the above said amount was recovered.

The District Forum allowed the complaint and ordered the OP to pay to the complainant, a sum of Rs.6,21,636/- with interest @ 6% p.a., from 11.01.2011, till its realisation. It also awarded a sum of Rs.500/- as costs of the case.

The State Commission passed the following order :- "[1] The present appeal of the appellants original opponents is hereby dismissed with costs.

[2] The order passed by the learned Consumer Forum in Complaint No. 23/12, dated 04-10-12 is hereby set aside and pass the order that the original opponents shall jointly and severally pay the interest at the rate of 6% p.a., on the amount deposited for the period from 01-04-07 to 31-03-10 to the applicant within three months from the date of this order and also the original opponents shall pay Rs.2000/- towards mental agony and harassment and costs of Rs.500/- to the applicant.

[3] In the present appeal, if any amount deposited by the opponent before the Commission then in that case calculating the mesne interest thereon and same will be paid by account payee cheque to the original applicant on due verification and it is hereby ordered that same cheque be handed over to the L.A. for the applicant".

We have heard the counsel for the petitioner. He has cited an authority Arulmighu Dhandayudhapaniswamy Thirukoil Vs. The Director General of Post Offices, 2011 AIR(SC) 2604, wherein at paras 8 and 17, it was held as under :- "8) The State Commission while rejecting the claim of the appellant relied on a decision of this Court R. In that case, the complainant therein issued six National Savings Certificates for Rs. 10,000/- each on 28.04.1987 from the Post Office. According to the Notification issued by the Government of India, the rate of interest payable with effect from 01.04.1987 was 11 per cent. But due to inadvertence on the part of the clerical staff of the Post Office, the old rate of interest and the maturity value which was printed on the certificates could not be corrected. The question that arose in that case was whether the higher rate of interest printed in the Certificate shall be paid or only the rate of interest mentioned in the Notification is applicable. This Court held that even though the Certificates contained the terms of contract between the Government of India and the holders of the National Savings Certificate, the terms in the contract were contrary to the Notification and therefore the terms of contract being unlawful and void were not binding on the Government of India and as such the Government refusing to pay interest at the rate mentioned in the Certificate is not a case of deficiency in service either in terms of law or in terms of contract as defined under Section 2(1)(g) of the Consumer Protection Act, 1986. The above said decision is squarely applicable to the case on hand.

Accounts opened in contravention of rules-Subject to the provisions of rule 16, where an account is found to have been opened in contravention of any relevant rule for the time being in force and applicable to the accounts kept in the Post Office Savings Bank, the relevant Head Savings Bank may, at any time, cause the account to be closed and the deposits made in the account refunded to the depositor without interest.

6 Since the deposits in the case on hand relate to Post Office Time Deposit Account, Rule 17 of the Rules is squarely applicable. The reading of Rule 17 makes it clear that if any Account is found to have been opened in contravention of any Rule, the relevant Head Savings Bank may, at any time, cause the account to be closed and the deposits made be refunded to the depositor without interest. Rule 16 speaks that where an account is opened incorrectly under a category other than the one applied for by the depositor, it shall be deemed to be an account of the category applied for if a person is eligible to open such account and if he is not so eligible, the account may be converted into an account of another category ab initio, if the person so desires and if he is found to be eligible. For any reason, where the account cannot be so converted, the account is to be closed and the deposits made in the accounts be refunded to the depositor with interest at the rate applicable from time to time to a savings account of the type for which the depositor is eligible".

He has also referred to authorities reported in (1) Central Government of India & Ors. Vs. Krishnaji Parvetesh Kulkarni, Civil Appeal Nos.4819/2000 & 1934/2006, decided on 05.04.2006 (2) Post Master, Dargamitta HPO, Nellore Vs. Raja Prameelamma, 1998 9 SCC 706.

All these cases do not deal with PPF. However, these authorities clearly, specifically and unequivocally lay down that the petitioner/ complainant in such like cases, is entitled to interest at the rate applicable, from time to time to a saving account of the type, for which the depositor is eligible.

On the other hand, counsel for the petitioner/UOI has invited our attention towards the letter dated 20.05.2005, written by Ministry of Finance, F.No. 2/8/2005-NS-II, Department of Economic Affairs (Budget Division), the relevant portions of which are reproduced here, as under: "2. As a result of the amendments dated 13th May, 2005, the investments under all small savings including Kisan Vikas Patra, have been restricted to individuals only. Copies of signed notifications in respect of six schemes were sent to the Department of Posts vide this Department''s letter of even no. dated 13.05.2005. A copy of the notification in respect of Kisan Vikas Patra has again been sent vide letter dated 19.05.2005.

It may, however, be noted that the above amendments shall not be applicable to the existing accounts/certificates opened/issued in accordance with the rules in operation prior to the amendments dated 13th May, 2005. These shall continue till maturity and deposits/ withdrawals in/from these accounts shall be allowed to be made in accordance with the said rules. However, any extension of existing accounts shall be subject to the amendments dated 13th May, 2005".

The revision petitions filed by the complainant and OPs are barred by 189 and 77 days, respectively. Both the parties have moved applications for condonation of delay. For the reasons detailed in their application, both the applications are allowed and delay is condoned.

It appears to be a case of contributory negligence. Both the parties were ignorant of the Notification. It was the bounden duty of the Post Master, OP3, to bring that account to an end. During the year 2009-2010, when he came to know about the above said Notification, it was his bounden duty to send back the money to the complainant, along with interest accrued, thereon. The bizarre conduct of the Reserve Bank of India is difficult to fathom. If they are to make such like Notifications, they must advertise the same before-hand, in Newspapers, TVs and other means of communications. It is always seen that the Notifications are made abruptly without the knowledge of the subject. Ours is a Welfare State. The people should not be taken by surprise. There should be sufficient time to ponder over such like Notifications. Such like abrupt Notifications rather go to show that the State gets unlawful enrichment. This is unfair trade practice conducted by the State itself. It must be avoided to benefit the people. It is, but clear that the amount must have been utilized by the Post Office officials. This is a well-known fact that they advance loans at a higher rate. Although, in view of the above said Supreme Court''s authorities, it appears that the complainant is not entitled to the same rate as permitted in the case of PPF, yet, there lies no rub in granting the complainant Saving Bank rate of interest at 4% p.a. The State Commission has almost, arrived at the correct point. The State Commission came to the following conclusion :- "At this juncture, L.A. Mr. Pancholi for the applicant has drawn my attention towards the judgment delivered in , in the case of Kisan Sahkari Chini Mill Ltd. V/s. Post Master General, Bareli,2011 CTJ 601 in which the principle laid down that on maturity of the deposit, the PF Trust denied to give the interest because the said account was opened against the rules and regulations of the Post Offices. In that case, the Hon''ble National Commission has kept in mind the equitable consideration and awarded 6% interest. Same way, in Writ Petition No. 12/2010, judgment dated 16-04-10, in which it was held that the NSC transaction was against the rule 98, sub-rule 4 of Post Offices in that case, 6% interest be paid. While in the present case on hand, the applicant should be paid the interest at the rate of 6% p.a., for the period from 01-04-07 to 31-03-10 on the deposited amount of the account of the applicant. As per my opinion, there is some substance in the arguments advanced by the L.A. Mr.Pancholi for the applicant and also in support of his argument, he has relied upon the aforesaid principles are quite helpful to the case of the applicant and, therefore, it is admitted at this state and, therefore, it is required to make some amendment in the order portion of the learned Consumer Forum and hence, following order is passed accordingly".

We, therefore, modify the orders passed by the fora below and direct the OPs to pay interest at the rate of 4% p.a., on the amount deposited from 01.04.2007 to 31.03.2010, to the applicant, within a period of 90 days'' from the date of receipt of this order; plus Pay interest at the rate of 4% p.a., on the total amount of that interest accrued thereon, from 01.04.2010, till its realisation; plus Pay the costs of litigation in the sum of Rs.15,000/- in favour of the complainant, within the above said 90 days'', or else, it will carry interest at the rate of 9% p.a., till its realisation. Both the revision petitions stand disposed of.