APPEARED AT THE TIME OF ARGUMENTS

PRONOUNCED ON :  24^th JULY 2018

O R D E R

PER MR. C. VISWANATH, MEMBER

          This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 26.10.2016, passed by the Rajasthan State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in First Appeal No. 1015/2016, “Union of India & Ors. versus Lakshmi Chand Gupta”.

2.       Briefly stated, the facts of the case are that the Respondent/Complainant purchased 33 National Savings Certificates (hereinafter called as NSCs) for 6 years for Rs.3,25,000/- in the name of Laxmi Chand Gupta ‘HUF’ from the office of the Postmaster, Head Post Office, Bharatpur, i.e., Petitioner No. 4.  The maturity date of these NSCs was 26.10.2012 and maturity value was Rs.5,25,000/-.  The Respondent for his personal and domestic requirement, requested Petitioner No. 4 to mortgage the aforesaid 33 NSCs and the same were mortgaged.  The Respondent submitted the NSCs on maturity for encashment before Petitioner No. 4 on 30.10.2012. Payment was, however, not made and no reasons were given for withholding the same.  It was further stated that the Respondent wrote many letters to the Petitioners, but in vain.

3.       The Respondent being aggrieved, filed a complaint before the District Consumer Disputes Redressal Forum, Bharatpur (for short ‘District Forum’) vide Complaint No. 6/2014 under section 12 of the Consumer Protection Act, 1986.  It was stated that non-payment of the aforesaid NSCs by the Petitioners is a deficiency in service and prayed that the Petitioners may be directed to pay Rs.5,25,000/- maturity value with 18% interest per annum thereon, Rs.50,000/- towards mental agony, Rs.30,000/- towards  financial loss and Rs.1,10,000/- towards cost of complaint be awarded.

4.       The petitioner/OP filed their written version and resisted the complaint.  It was stated that Respondent purchased 33 NSCs for 6 years for Rs.3,25,000/- in the name of Laxmi Chand Gupta ‘HUF’. These NSCs, however, were purchased irregularly, as these were purchased in the name of Laxmi Chand Gupta ‘HUF’ which was contrary to DG Post letter No. 113-10/2004 SB dated 16.05.2005 and 26.05.2005.  According to the above mentioned letter of DG Post, NSCs cannot be purchased under ‘HUF’ category.  It was further pleaded that no agent is being appointed by the Petitioners No. 2 to 4 and NSCs submitted through agent is not tenable.  The Respondent did not submit the NSCs as per procedure, therefore, there is no deficiency in service.  These NSCs, however, were returned.  It was further pleaded that since these NSCs were purchased contrary to Rules, the Respondent is not entitled for any interest and maturity amount.  He is entitled to the deposited amount, after following due procedure.  It was further stated that the Respondent purchased these NSCs under ‘HUF’, to get Income Tax rebate while it was his own income which was taxable.  As he did not mention the names of members of ‘HUF’, it means it was his personal income.  Ultimately it was prayed that the complaint filed by the Respondent may be dismissed.  

5.       The District Forum after hearing the counsel for the parties, allowed the complaint filed by the Respondent vide its Order in Complaint No. 6/2014 and directed the Petitioners to pay Rs.5,25,000/- alongwith simple interest @9% per annum from the date of filing of the complaint, i.e., 02.01.2014 and Rs.1,100/- towards litigation charges.  Aggrieved by the order dated 18.07.2016 of the District Forum, the Petitioners have filed an Appeal before the State Commission Rajasthan, Jaipur, along with application for stay of the impugned order and application for condonation of delay in filing the appeal.  The State Commission dismissed the First Appeal No. 1015/2016, vide its order dated 26.10.2016, observing that there is no need to interfere with the order dated 18.07.2016 of the District Forum in Complaint No. 6/2014. 

6.       The Petitioner filed the present Revision Petition, against the impugned order dated 26.10.2016 passed by the State Commission, on the ground that the State Commission has committed serious illegality in not appreciating that the complainant purchased the NSCs in the name of Laxmi Chand Gupta ‘HUF’ on 26.10.2006 under ‘HUF’ category, which was already discontinued by the Postal Department vide DG Post letter dated 16.05.2005 and 26.05.2005 and, therefore, these NSCs were irregular and purchased contrary to Rules for which complainant is not entitled for any interest. 

7.       The State Commission held that there was no dispute that the appellants have issued HUF Saving Certificates, whereas as per circular, it was not competent to issue Saving Certificate to HUF.  The Saving Certificates have been issued on 26.10.2016 and payment has not been made on maturity.  In such circumstances, the District Forum has properly accepted their deficiency in service. 

8.       We have heard the learned counsel for the parties.  There was a delay of 22 days in filing the revision petition.  For the reasons stated in the application for condonation of delay, the delay in filing the present revision petition is condoned.  On merits, the learned counsel for petitioners quoted Rule 17 of Post Office Savings Bank General Rules of 1981, which mentions “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 Saving Bank may, at any time cause the account to be closed and the deposits made in the account refunded to the depositor, without interest.”  It is stated that the Respondent opened the accounts in Savings Bank, i.e., under category (d) of rule 16 Time Deposit Account under "HUF category on 26.10.2006 and these type of HUF Category accounts were already discontinued vide DG Post letter dated 16.5.2005 and 26.5.2005.  These deposits were, therefore, in contravention of Rules and as per Rule 17 of the Rules of 1981 the Respondent/Complainant is not entitled for any interest thereon.

9.       Hon'ble Gujarat High Court in the case of “Devang Cooperative Housing Society Vs. Sub Post Master, [AIR 2005 Gujarat 76]” has held that it is always a matter of policy for the Union of India to decide the beneficiaries of the Scheme. There is no legal right vested in the Petitioner to purchase Kisan Vikas Patra and to earn interest thereon.

10.     The State Commission did not consider law laid down by the Hon’ble Supreme Court of India in the case of “Arulmighu Dhandayudhapaniswamy Palani vs. Director General of Post Offices & Ors., (2011) 13 SCC 220 wherein it has been held that in the light of letter dated 1.12.1995 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.

11.     Hon’ble Supreme Court in Post Master, Dargamitta EPO, Nelore Vs. Raja Prameeelamma, [(1998) 9 SCC 706], had held as under:-

“As regards the contract no doubt the sale of National Savings with the terms and conditions embellied thereon constitutes contract between the Government of India as seller and 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, 1986”

12.     This Commission in RP No. 12/2010 in the matter of “Superintendent of Post Offices, East Division, Vadodara vs. Helpline Grahak Mandal, held that the NSCs were issued in contravention of Rule 4 of the National Savings Certificate (VIII^th Issues) Rules, 1989 and Savings Bank interest has already been paid to the complainant on the NSCs.”

13.     The State Commission ought to have appreciated that even if, it is assumed that the Officer of the Postal Department who had at relevant time inadvertently and erroneously accepted subsequent deposits in contravention of the provisions of the aforesaid statutory Rules, the said contract which is inadvertently executed by the Officer of the Postal Department, in violation of statutory rules, is not a binding contract to the Central government.

14.     The State Commission ought to have appreciated that the Government cannot be held liable to pay interest under the unauthorized contract and further it does not become a contract binding to the Government of India, being unlawful and void.

15.     The State Commission ought to have appreciated that the Complainant has given a declaration in writing that he agreed to abide by such rules framed by the Central Government as may be applicable to his aforesaid account, from time to time. It is therefore submitted that the Complainant is not justified in pleading ignorance of the Rules and Regulations governing the said account. Moreover, it is submitted that ignorance of statutory rules, notification governing the scheme cannot be pleaded as legal defence.  The undertaking / declaration given by the Complainant in his application for opening the account are reproduced as under:

“I/We agree to abide by such rules framed by the Central Government as may be applicable to the account from time to time”

16.     The Ld. Counsel for the Respondent argued that the contention of the Petitioners that the concerned 6 yearly saving certificates have not been submitted for getting payment in the Post office, is not true and only with the purpose of contesting the complaint, such type of arguments are being given.  He submitted that the concerned Saving certificates having seal and signatures of Assistant Post Master, Saving Bank, Head Post Office, Bharatpur, were presented in original for payment to the Head Post Master, Bharatpur to make payment.  The Ld. Counsel for the Respondent argued that the Assistant Post Master after getting the concerned saving certificates for initiating the proceedings of payment, without adopting any formal process, returned them to the Respondent.  The original certificates, are thus there with the Complainant. 

17.     We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.  We have perused the letter/notification issued by the DG Post, has been issued under the Rules and is having mandatory force of Rules, therefore, in our view, the observation of the District Forum is incorrect. It is clear, in such circumstances, that only sale of HUF has been discontinued with the letter of DG (Post) and the Respondent has not violated any Act or Rule of the Post Office.  Once the Petitioners have issued the NSCs, in HUF category, the petitioners cannot raise the issue of irregularity after expiry of the maturity period of 6 years.  The Saving Certificates have been mortgaged for a loan after purchasing the NSCs.  The petitioners did not raise any objection at that time. 

18.     Learned counsel for the Petitioners cited the judgment “Devang Cooperative Housing Society Ltd. Vs. Sub Post Master” (supra), in which dispute was regarding Kisan Patra and explaining Rules 6 and 13 of that time, has passed the order, whereas in the present case, there is no disputes of those Rules. He has also cited the judgment “Arulmighu Dhandayudhapaniswamy Palani vs. Director General of Post Offices & Ors.,” (supra), in which the amount was returned after four months but in the present case, the Petitioners did not initiate any action to cancel the NSCs.  They waited for the Respondent to approach them upon maturity of Saving Certificates and have not returned the amount of Maturity.  In “Post Master, Dargamitta EPO, Nelore Vs. Raja Prameeelamma” (supra), it was held that inadvertent omission on the part of clerical staff of Post Office to correct the old rate of interest and maturity value on the NSCs did not amount to deficiency in service.  Present case is not an inadvertent omission on the part of a clerical staff.  The saving certificates had the seal and signatures of Assistant Post Master, Saving Bank, Head Post Office, Bharatpur, which is against the policy change made by the Department.  This Commission in “Superintendent of Post offices Vs. Helpline Grahak Mandal, [Revision Petition No. 12/2010] vide order dated 16.04.2010, has awarded savings bank interest to the complainant on the Saving Certificates, whereas in the present case, the Saving Certificates have been received for payment of maturity amount, and interest was totally denied. 

19.     Further, when the complaint desired mortgaging the above said Saving Certificates on 24.7.07, the needful was done.  Even at that time, no doubt whatsoever was raised by the Petitioners about the certificates being issued in violation of the Rules. The complainant had to visit the Opposite parties so many times without any result.  Neither the Petitioners paid the maturity value nor gave any reply in respect of payment.  Consequently the complainant has suffered financial loss. Thus the Petitioners have committed deficiency in service. 

20.     The Petitioners contended that the savings certificates have been purchased by the Respondent under HUF category, to save income tax.  This contention is not just and fair.  It was for the Petitioners to have not issued NSCs certificates under HUF category and on the contrary, for their own fault, putting blame on the Respondent is unacceptable.  The Petitioners could have sent notice to the Income Tax Department and on which action could have been taken by them if there was any discrepancy.

21.     In view of the above, we are of the view that denying payment of maturity value to the Respondent, is not just and proper and suffers from deficiency in service.  Therefore, it is just and proper to make the payment of maturity amount to the complainant.  Also for the harassment suffered by the complainant, to award interest as compensation on the above said maturity amount also appears reasonable.  As a result the Revision Petition is liable to be dismissed. 

22.     It is an undisputed fact that the Respondent had purchased 33 NSCs under the HUF category in the name of Laxmi Chand Gupta ‘HUF’ on 26.10.2006 issued in Head Post Office, Bharatpur.  The Respondent again approached the Post Office for mortgaging the said NSCs to obtain a loan.  The same was pledged to the Manager, SBI, Sanganer, Jaipur on 24.04.2007 under the seal and signatures of the Assistant Post Master, Savings Bank Head Post Office, Bharatpur.  At this stage also it was not brought to the notice of the Respondent that the NSCs were issued irregularly and contrary to Rules.  At the time of encashment of NSCs, it was pointed out that the NSCs were issued, under HUF category against Rules and Respondent was denied payment of any interest whatsoever.  This is a clear case of ignorance of Rules and utter indifference and callousness on the part of the Postal Authorities.  The Respondent bought the NSCs in the Post Office and the money remained with the Postal Authorities for 6 long years without raising the issue of any irregularity or illegality in the intervening period.  If there was any clerical mistake there was an opportunity for them to have it corrected, even while mortgaging the said NSCs.  Having kept the funds with them all the while, without ever bringing the ineligibility to hold NSCs under HUF category to the notice of the Respondent, the Petitioners cannot raise the issue of irregularity after expiry of the maturity period of 6 years.  Not to make payment of the maturity amount to the respondent and making him approach them several times and not even bothering to reply is unjust and clearly a deficiency in service on the part of the Petitioners.  Had the Respondent been told about the irregular issue of NSCs early, at least he would have better utilised his funds and earned a decent interest on the same.  He is now being denied the entire interest amount, having kept the funds with them so long.   If ignorance of Rules and Laws by the Respondent is no excuse, the same should also apply to the Postal Authorities.  They are expected to know their own Departmental Rules, much better than the Respondent and responsibility squarely rests on them first, to implement their Rules.  If the contention of the Petitioners is accepted, Government, which is to work for the social and economic well-being of the people, would be encouraged to function otherwise.

23.       In view of the above, the revision petition is dismissed and the order passed by the State Commission, confirming the order of the District Forum, is upheld, with no order as to costs.