Arulmighu Dhandayupaniswamy ... vs Dir. General Of Post Offices & Ors

Its Joint Commissioner .... Appellant (s)

Versus

The Director General of Post Offices,

Department of Posts & Ors. .... Respondent(s)

J U D G M E N T

P. Sathasivam, J.

1) This appeal is filed by the appellant-Temple through

its Joint Commissioner against the final order dated

31.05.2006 passed by the National Consumer Disputes

Redressal Commission (in short "the National

Commission") at New Delhi in First Appeal No. 411 of

1997 whereby the Commission dismissed their appeal.

1 2) Brief facts:

(a) The appellant is a temple situated in the State of

Tamil Nadu. It is one of the ancient temples of Lord

Kartikeya and is considered prime among the six holiest

shrines of the Lord. Every year, lakhs of devotees throng

the temple which is situated on a hill to receive the

blessings of the Lord. The temple is being administered by

the Hindu Religious and Charitable Endowments

Department of the Government of Tamil Nadu. The

devotees make offering in cash and kind to the deity. The

cash offerings are collected and invested in various forms.

The income derived from such investments is utilized for

charitable purposes such as prasadams, hospitals,

schools and orphanages.

(b) According to the appellant, it had deposited a huge

sum of money totaling to Rs.1,40,64,300/- with the Post

Master, Post Office, Palani from 05.05.1995 to 16.08.1995

for a period of five years under the `Post Office Time

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Deposit Scheme' (in short `the Scheme'). On 01.12.1995,

the Temple received a letter from the Post Master, Post

Office, Palani-3rd Respondent herein informing that the

Scheme had been discontinued for investment by

institutions from 01.04.1995, and therefore, all such

accounts should be closed without interest. The amount

deposited by the Temple was refunded only on 03.01.1996

without interest.

(c) Aggrieved by the decision of the Postal Authorities,

the appellant, on 10.01.1996, sent a legal notice to the

respondents calling upon them to pay a sum of

Rs.9,13,951/- within a period of seven days, being the

interest @ 12% p.a. on the sum of Rs.1,40,64,300/- from

the dates of deposit till the dates of withdrawal. As

nothing was forthcoming from the respondents, the

appellant preferred a complaint before the State

Consumer Disputes Redressal Commission (in short "the

State Commission"). Vide order dated 08.08.1997, the

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State Commission was divided over its opinion in the ratio

of 2:1. The majority opinion comprising of the Chairman

and Member II dismissed the complaint filed by the

appellant.

(d) Aggrieved by the dismissal of the complaint by the

State Commission, the appellant preferred an appeal to

the National Commission which was also dismissed on

31.05.2006. Challenging the said order, the appellant has

preferred this appeal by way of special leave before this

Court.

3) Heard Mr. S. Aravindh, learned counsel for the

appellant and Mr. A.S. Chandhiok, learned Additional

Solicitor General for the respondents.

4) Points for consideration in this appeal are whether

there was any deficiency in service on the part of the Post

Master, Post Office, Palani-3rd Respondent herein and

whether the appellant-complainant is entitled to any relief

by way of interest?

4 Discussion

5) We have already adverted to the factual details. It is

the case of the respondents that the Central Government

had issued a Notification being No. G & SR 118(E) 119(E)

120(E) as per which no Time Deposit shall be made or

accepted on behalf of any institution with effect from

01.04.1995. It is not in dispute that the appellant-Temple

had deposited a huge sum of money amounting to

Rs.1,40,64,300/- with the Post Master from 05.05.1995 to

16.08.1995. The said deposit was for a period of five years

under the Scheme. Though the 3rd Respondent had

accepted the amount under the said Scheme and issued a

receipt for the same, later it was found that the deposits

made on and from 01.04.1995 were against the said

Notification which amounted to contravention of the Post

Office Savings Bank General Rules, 1981 (in short `the

Rules').

5 6) In exercise of the powers conferred by Section 15 of

the Government Savings Banks Act, 1873, the Central

Government framed the above mentioned Rules. The

Rules are applicable to the following accounts in the Post

Office Savings Bank, namely, a) Savings Account b)

Cumulative Time Deposit Account c) Recurring Deposit

Account d) Time Deposit Account and it came into force

with effect from 01.04.1982. Among various Rules, we are

concerned with Rules 16 & 17 which read as under:-

"16. Accounts opened incorrectly.--(1) Where an account

is found to have been 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 he was

eligible to open such account on the date of his application

and if he was not so eligible, the account may, if he so

desires, be converted into an account of another category ab

initio, if he was eligible to open an account of such category

on the date of his application.

(2) In cases where the account cannot be so converted, the

relevant Head Savings Bank may, at any time, cause the

account to be closed and the deposits made in the accounts

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.

17. 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

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savings account of the type for which the depositor is

eligible.

7) Before considering Rule 17, it is useful to refer the

communication dated 01.12.1995 of the Post Master-3rd

Respondent herein which reads as under:

"DEPARTMENT OF POSTS, INDIA

From

Post Master

Palani 624 601

To

The Joint Commissioner/

Executive Officer

A/M. Dhandayuthapani Swamy

Thirukoil, Palani

No. DPM/SB/Dlg. Dated at Palani 01.12.1995

Sub: Investment by Institution in the Post Office Time Deposits, K.V.

Patras, NSC VIII Issue-reg.

Sir,

I am to inform you that with effect from 01.04.1995 investments by

Institution in the P.O. T.D. V.P.+N.S.C. VIII issue is discontinued. As

Devasthanam is also an Institution, I request you to close all the TD

accounts immediately without interest and also if any kind of above said

patras and certificates purchased by the Devasthanam after 01.04.1995.

The following TD accounts have been opened at Palani H.O. after

01.04.1995. Please close the accounts immediately.

1) 5 year TD 2010417 dt. 05.05.1995, (2) 2010418 dt. 20.05.1995, (3)

2010419 dt. 31.05.1995, (4) 2010421 dt. 14.06.1995, (5) 2010422 dt.

21.06.1995, (6) 2010423 dt. 03.07.1995, (7) 2010424 dt. 03.07.1995, (8)

2010425 dt. 11.07.1995 (9) 2010426 dt. 13.07.1995, (10) 2010428 dt.

29.07.1995, (11) 2010429 dt. 01.08.1995, (12) 2010430 dt. 07.08.1995,

(13) 2010431 dt. 07.08.1985 and (14) 2010435 dt. 16.08.1995.

8 Yours faithfully

(Sd/-)............

Post Master

Palani 624 601"

It is clear from the above communication that with effect

from 01.04.1995 i.e. even prior to the deposits made by

the appellant-Temple, investment by institutions under

the Scheme was not permissible and in fact discontinued

from that date. It is not in dispute that the appellant-

Temple is also an institution administered and under the

control of the Hindu Religious and Charitable

Endowments Department of the State. Vide the above

said communication, the Post Master, Palani informed the

appellant to close all those accounts since the same was

not permissible. The communication dated 01.12.1995

also shows that all such accounts should be closed and

the amounts so deposited are to be refunded without

interest. In our case, the deposit accounts have been

caused to be closed and the amounts deposited have been

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returned to the depositors without interest. Though the

appellant claimed interest and insisted for the same on

the ground of deficiency in service on the part of the Post

Master, Palani, in view of Rule 17, the respondents are

justified in declining to pay interest for the deposited

amount since the same was not permissible. In the light

of Rule 17 of the Rules, as rightly concluded by the State

and the National Commission, it cannot be held that there

was deficiency in service on the part of the respondents,

3rd respondent in particular.

8) The State Commission while rejecting the claim of the

appellant relied on a decision of this Court reported in

Postmaster Dargamitta, H.P.O., Nellore vs. Raja

Prameeelamma (Ms.) (1998) 9 SCC 706. 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

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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

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Act, 1986. The above said decision is squarely applicable

to the case on hand.

9) It is true that when the appellant deposited a huge

amount with the 3rd Respondent from 05.05.1995 to

16.08.1995 under the Scheme for a period of five years, it

was but proper on the part of the Post Master to have

taken a note of the correct Scheme applicable to the

deposit. It was also possible for the Post Master to have

ascertained from the records, could have applied the

correct Scheme and if the appellant, being an institution,

was not eligible to avail the Scheme and advised them

properly. Though Mr. S. Aravindh, learned counsel for the

appellant requested this Court to direct the 3rd

Respondent to pay some reasonable amount for his lapse,

inasmuch as such direction would go contrary to the

Rules and payment of interest is prohibited for such

Scheme in terms of Rule 17, we are not inclined to accept

the same. We are conscious of the fact that a substantial

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amount had been kept with the 3rd Respondent till

03.01.1996 when the said amount was refunded without

interest. In the light of the letter dated 01.12.1995 and in

view of Rule 17 of the Rules, failure to pay interest cannot

be construed as a case of deficiency in service in terms of

Section 2(1)(g) of the Consumer Protection Act, 1986.

Both the State and the National Commission have

concluded that the 3rd Respondent was ignorant of any

Notification and because of this ignorance the appellant

did not get any interest for the substantial amount. We

agree with the factual finding arrived at by the State and

the National Commission and in view of the circumstances

discussed above, the respondents cannot be fastened for

deficiency in service in terms of law or contract and the

present appeal is liable to be dismissed.

13 10) Before parting with this appeal, we intend to make the

following suggestions to the Post Offices dealing with

various accounts of deposits:

i) Whether it is metropolitan or rural area, persons

dealing with public money or those who are in-charge

of accepting deposits to be conversant with all the

details relating to types of deposits, period, rate of

interest, eligibility criteria etc. for availing benefits

under different schemes.

ii) It is desirable to exhibit all these details in

vernacular language in a conspicuous place to

facilitate the persons who intend to invest/deposit

money.

14 iii) That if the Central Govt. issues any

notification/instructions regarding change in the

interest rate or any other aspect with regard to

deposits, the decision taken shall be immediately

passed on to all the authorities concerned by using

latest technology methods i.e. by fax, e-mail or any

other form of communication so that they are kept

updated of the latest developments.

iv) If there is any change in different types of schemes, it

must be brought to the notice of the sub-ordinate

staff of the post offices dealing with deposits in order

to ensure that correct procedures are followed and

correct information is given to the public.

11) We are constrained to make these observations since

in the case on hand because of the lack of knowledge on

the part of the Post Master who accepted the deposit and

the appellant, one of the ancient temples in Tamil Nadu

lost a substantial amount towards interest.

15 12) With the above observations, we dismiss the appeal

with no order as to costs.

..........................................J.

(P. SATHASIVAM)

..........................................J.

(A.K. PATNAIK)

NEW DELHI;

JULY 13, 2011.

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