BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

AT HYDERABAD.



F.A. 1511/2006 against C.C. 199/2005, Dist. Forum, Vijayawada





Between:



The Post Master

Buckinghampet

Head Post Office

Rep. by its Post Master

Governerpet, Vijayawada. *** Appellant/

Opposite Party

And

M/s. Krishna Mandala

Vedavidwat Pravardhaka Sabah

Rep. by its President

Maganti Subramanyam

S/o. Venkateswarlu

R/o. Brundavan Colony

Vijayawada. *** Respondent/

Complainant



Counsel for the Appellant: Mr. V. Vinod Kumar

Counsel for the Resp: Served.







HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT

SMT. M. SHREESHA, MEMBER

&

SRI K. SATYANAND, MEMBER





WEDNESDAY, THIS THE TWENTY SEVENTH DAY OF MAY TWO THOUSAND NINE



Oral Order: (Per Hon’ble Justice D. Appa Rao, President)



*****







1) This is an appeal preferred by opposite party, postal department against the order of the Dist. Forum in directing it to pay the amount covered under deposit scheme together with interest from the date of complaint and costs.















2) The case of the complainant in brief is that it is a Trust established to develop vedic vidya to the students to propagate Vedas. On 7.6.2004 it deposited Rs. 12 lakhs with the appellant for a period of five years which in turn had agreed to pay interest @ 7.5% p.a., besides paying Rs. 92,520/- towards interest every year. When it demanded interest after completion of first year, it replied stating that the deposit was accepted contrary to the rules, and it was irregular, and it would not be liable to pay any interest. It would pay back the principal amount without payment of interest. The deposit was taken by oversight. After issuing legal notice under Ex. A3, it filed the complaint for refund of the amount together with interest and costs.



3) The appellant resisted the case. It alleged that the five year term deposit account was opened in contravention of the rules. This fact was informed by the Director General of Posts by his letter Dt. 9.3.1995. Since the complainant was registered under Society Registration Act, as per the rules, it had to close the account and refund the deposit, however without any interest. The complainant has no right to claim interest. Mere opening of an account by oversight, does not give any right to claim interest. Therefore, it prayed for dismissal of the complaint.



4) The complainant in proof of its case filed affidavit evidence of its President and got Exs. A1 to A4 marked, while the appellant postal department filed the affidavit evidence of the Post Master, Buckinghampet and got Exs. B1 to B6 marked.













5) The Dist. Forum after considering the evidence placed on record opined that the appellant having accepted the deposit could not deny payment. Since the appellant had benefited itself by taking the deposit liable to pay interest as agreed upon and accordingly directed it to pay deposit amount together with interest that is agreed upon with costs of Rs. 5,000/-.



6) Aggrieved by the said decision, the postal department preferred this appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective. It ought to have taken cognizance of statutory rules wherein deposit by an institution a body registered as society is irregular. The complainant having agreed that it would abide by rules framed by the government from time to time, the notification issued by the government of India is binding on the complainant. Rule 17 of Post Office Savings Bank General Rules imposes bar on payment of interest on deposit in contravention of relevant rules. It ought to have followed the decision of Supreme Court in Postmaster, Dargamitta, HPO, Nellore Vs. Ms. Raja Prameelamma in SLP (Civil) No. 38/1995 wherein it was held that it was not a case of deficiency in service either in terms of law or contract as defined in section 2(1)(g) of the Consumer Protection Act. Therefore a direction to pay interest is bad under law.



7) The point that arises for consideration is whether the appellant is liable to pay interest as agreed upon?

















8) It is an undisputed fact that the complainant deposited an amount of Rs. 12 lakhs on 7.6.2004 under Time Deposit with the appellant wherein it was agreed to pay interest @ 7.5% p.a., besides Rs. 92,520/- towards interest every year. When the claimant claimed the interest, curiously, the appellant resisted the claim stating that the very deposit was against the circular issued by the department of post offices wherein investment by an institution was barred. Since it was contrary to the notification issued by the Government of India it was not liable to pay interest.



9) Learned counsel for the appellants relying a decision of Supreme Court in The Post Master, Dargamitta, HPO, Nellore Vs. Ms. Raja Prameelamma contended that if NSCs were given contrary to the rules, it does not become a contract binding the Government of India, being unlawful and void. Therefore, it cannot be said that there was deficiency of service either in terms of law or in terms of contract as defined in section 2(1)(g) of the Consumer Protection Act.



10) A perusal of the above judgment would show that NSCs for Rs. 10,000/- were issued on 28.4.1987 agreeing to pay interest @ 11% p.a., from 1.4.1987. However due to inadvertence of the staff, the old rate of interest and the maturity value which was printed on the certificate, could not be corrected. In that context it was held that the party was only entitled to the interest as notified by the Government of India and any mistake committed by the employee of the department would not bind it as a contract thereby.













11) The notification which the appellant relies reads as follows :

Published in the Gazette of India Extraordinary

Part-II Sec (i) Sub-section (i) Dt. 8.3.1995.

Government of India, Ministry of Finance

Dept. of Economic Affairs, New Delhi, 8th March, 1995.



N O T I F I C A T I O N



G.S.R 119(E) – in exercise of powers conferred by sec. 12 of

the Govt. Savings Certificates 1959 (46 of 1959) the Central Govt. hereby makes the following rules further to amend the Kisan Vikas Patra Rules, 1988 namely :



1. (1) These rules may be called the Kisan Vikas Patra

(Amendment) Rules, 1995.





(2). They shall come into force on the 1st day of April, 1995.



In the Kisan Vikas Patra Rules, 1988



In Rule 6, under the heading “ Types of certificates and issue

therefore” for clause (a) of sub-rule (2) the following shall

be substituted, namely:-



(a) A single holder type certificate may be issued to :



(i) an adult for himself or on behalf of a minor or to a

minor.



(ii) a ‘Trust’





12) Coming to the facts, we may state that the complainant described itself as a ‘trust’. Except controverting the same in general terms, the appellant did not try to establish that it was not a ‘’trust’. Having taken the deposit after satisfying about the eligibility of the institution, when it was described it as a ‘trust’ it has issued deposit receipt evidenced under Ex. A1. For the first time, when the claimant had claimed the interest which it was entitled to under the terms of Ex. A1, the appellant, instead of paying the amount, turn round, and came up with this untenable contention.













In fact, a perusal of the notification would undoubtedly disclose that the appellant is entitled to take investment from the complainant institution in the nature of ‘Time Deposit’, The circular is applicable only to the investment by institutions which are not ‘trusts’. Trusts are positively excluded from the operation of the circular. In other words ‘trusts’ are exempted from the bar. In view of the fact that the complainant is a trust it was entitled to the amount claimed. It is unfortunate that the government institutions which have taken upon itself to honour its obligation shirking its responsibility by taking untenable, unjust and immoral defences. It is pertinent to note that the post office had enriched itself by the deposit made by the complainant by investing the same as provided under the rules. Refusal of payment of interest would amount to unlawful or unjust enrichment. Much more so, when the investment made by the trust was held by the post office for a long time. Obviously, the intentions are very clear. It intends to appropriate the benefits, and at the same time deny lawful amount due to the complainant. The Dist. Forum was correct when it directed the appellant to pay interest as agreed upon. We do not see any merits in the appeal.



12) In the result the appeal is dismissed with costs computed at Rs. 10,000/-. Time for compliance four weeks.





1) _______________________________

PRESIDENT





2) ________________________________

MEMBER





3) _________________________________

MEMBER

Dt. . 27. 05. 2009.