Dhandayudhapaniswamy Thirukoil, Palani, Tamil Nadu, thr. Its Joint Commissioner
Vs. The Director General of Post Offices, Department of Posts & Ors
J U D G M E N T
P. Sathasivam, J.
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.
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 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 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
Mr. S. Aravindh, learned counsel for the appellant and Mr. A.S. Chandhiok, learned
Additional Solicitor General for the respondents.
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
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').
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 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.
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:
OF POSTS, INDIA
Palani 624 601
To The Joint
Commissioner/ Executive Officer
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.
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
The following TD accounts
have been opened at Palani H.O. after 01.04.1995. Please close the accounts
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.
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 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.
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 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.
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 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.
parting with this appeal, we intend to make the following suggestions to the Post
Offices dealing with various accounts of deposits:
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.
is desirable to exhibit all these details in vernacular language in a conspicuous
place to facilitate the persons who intend to invest/deposit money.
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.
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
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.
the above observations, we dismiss the appeal with no order as to costs.