Supreme Court of India
ARULMIGHU DHANDAYUDHAPANISWAMY THIRUKOIL, PALANI, TAMIL NADU, THR. ITS JOINT COMMISSIONERversusTHE DIRECTOR GENERAL OF POST OFFICES, DEPARTMENT OF POSTS & ORS.
- Citation
- 2011 INSC 489
- Decided
- 13 July 2011
- Disposal
- Dismissed
- Bench
- P SATHASIVAM
Holding
The Court held that non‑payment of interest under Rule 17 does not amount to a deficiency in service within the meaning of the Consumer Protection Act, 1986.
Summary
The ancient Arulmigu Dhandayuthapani Swamy Temple deposited Rs.1,40,64,300 under the Post Office Time Deposit Scheme in 1995, but the scheme had been discontinued for institutions effective 1 April 1995. The Post Master later refunded the amount without interest, prompting the temple to claim interest as a deficiency in service under the Consumer Protection Act. Both the State and National Consumer Disputes Redressal Commissions dismissed the claim, holding that the refund without interest was mandated by Rule 17 of the Post Office Savings Bank General Rules, 1981. The Supreme Court affirmed that failure to pay interest does not constitute a deficiency in service because the account was opened in contravention of the Rules, and the respondents cannot be held liable. Consequently, the appeal was dismissed with no order as to costs.
Issues considered
- Whether the refusal to pay interest on the refunded deposit amounts to a deficiency in service under Section 2(1)(g) of the Consumer Protection Act, 1986.
- Whether Rule 17 of the Post Office Savings Bank General Rules, 1981, precludes liability for interest when an account is opened in contravention of the Rules.
Legislation cited
Subjects
Consumer ProtectionDeficiency in ServicePost Office Time DepositInterest LiabilityRule 17Contractual ObligationGovernment Savings Banks Act
Judgment
[2011) 10 S.C.R. 43
ARULMIGHU DHANDAYUDHAPANISWAMY THIRUKOIL, A
PALANI, TAMIL NADU, THR. ITS JOINT COMMISSIONER
v.
THE DIRECTOR GENERAL OF POST OFFICES,
DEPARTMENT OF POSTS & ORS.
(Civil Appeal No. 4995 of 2006) 8
JULY 13, 2011
[P. SATHASIVAM AND A.K. PATNAIK, JJ.]
Consumer Protection Act, 1986 - s. 2(1)(g) - Deficiency C
in service - Deposit of huge amount by the appellant-temple
for five years under the Post Office Time Deposit Scheme -
Appellant informed by Post Master that the Scheme had been
discontinued for investment by institutions, thus amount
deposited by temple refunded without interest - Complaint D
filed by the appellant claiming interest on the ground of
deficiency in service on part of the Post Master - Dismissed
by the State Commission as also National Commission - On
appeal held: In the light of the communication dated
01. 12. 1995 and in view of r. 17, failure to pay interest cannot E
be construed as a case of deficiency in service in terms of s.
2(1)(g) - The factual finding arrived at by the State and the
National Commission that the Post Master was ignorant of any
Notification and as such the appellant did not get any interest
for the substantial amount are upheld and thus, the F
respondents cannot be fastened for deficiency in service in
terms of law or contract - Post Office Savings Bank General
Rules, 1981 - r. 17.
Appellant-Temple had deposited a huge sum of
money amounting to Rs.1,40,64,300/- with the Post Master G
from 05.05.1995 to 16.08.1995 for a period of five years
under the Post Office Time Deposit Scheme. The Post
Master, Post Office accepted the said amount under the
43 H
44 SUPREME COURT REPORTS [2011] 10 S.C.R.
A Scheme and issued the receipt for the same but later it
was found that the Scheme had been discontinued for
investment by institutions from 01.04.1995 and as such
the amount deposited by the Temple was refunded
without interest. The appellants filed complaint claiming
B interest on the ground of deficiency in service on the part
of the Post Master. The State Commission as also the
National Commission dismissed the same. Therefore, the
appellants filed the instant appeal.
Dismissing the appeal, the Court
c
HELD: 1.1 Since the deposits in the case on hand
relate to Post Office Time Deposit Account, Rule 17 of the
Post Office Savings Bank General Rules, 1981 is squarely
applicable. The reading of Rule 17 makes it clear that if
D 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 [Para 6) [50-F-G]
E
1.2 It is clear from the communication dated
.01.12.1995 of the Post Master 3rd respondent 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
F from that date. 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
G 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. The deposit
accounts have been caused to be closed and the
H
ARULMIGHU DHANDAYUDHAPANISWAMYTHIRUKOIL, PALANI, 45
TAMIL NADU, THR. ITS JOINT COMM. v. DIR. GEN. OF POST
OFFICES, DEPT. OF POST·
amounts deposited have been returned to the depositors A
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 B
permissible. In the light of Rule 17 of the Rules, it cannot
be held that there was deficiency in service on the part
of the respondents, 3rd respondent in particular. [Para 7]
[52-C-G]
Postmaster Dargamitta, H.P. 0., Ne/lore vs. Raja
c
Prameeelamma (Ms.) (1.998) ·9 SCC 706 - held applicable.
· 1.3 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, D
it was but prop~r 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, E
was not eligible to avail the Scheme and advised them
properly. The l~equest to 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 F
Scheme in terms of Rule 17, cannot be accepted. 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 G
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
H
46 SUPREME COURT REPORTS [2011] .10 S.C.R.
A ignorance the appellant did not get any interest for the
su6stantial amount. The factual finding arrived at by the
State and the National Commission are concurred with
and in view of the circumstances, the respondents cannot
be fastened for deficiency in service in terms of law or
B contract. [Para 9] [53-F-H; 54-A-C]
1.4 The following suggestions are made to the Post
Offices dealing with various accounts of deposits:
(i) Whether it is metropolita" or rural area, persons
c 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.
D
(ii) It is desirable to exhibit all these details in
vernacular language in a consph:uous place to
f facilitate the persons who intend to invest/deposit
•
money.
E (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
F 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
G 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.
H
ARULMIGHU DHANDAYUDHAPANISWAMY THIRUKOIL, PALANI, 47
TAMIL NADU, THR. ITS JOINT COMM. v. DIR. GEN. OF POST
· OFFICES, DEPT. OF POSTS
The said observations are made since in the case on A
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 Jost a
substantial amount towards interest. [Paras 10.and 11]
[54-0-H; 55-A-C] B
Case Law Reference:
(1998) 9 sec 10s Held applicable. Para 8
CIVIL APPELLATE JURISDICTION: Civil Appeal No. C
4995 of 2006.
From the Judgment & Order dated 31.05.2006 of the
National Consumer °Disputes Redressal Commission at New
Delhi in First Appeal No. 411 of 1997.
D
S. Aravindh, Rakesh K. Sharma for the Appellant.
AS. Chandhiok, ASG, Sonia Mathur, Bhagat Singh,
Snigdha Sharma, V.K. Verma for the Respondents.
The Judgment of the Court was delivered by E
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 F
Commission") at New Delhi in First Appeal No. 411 of 1997
whereby the Commission dismissed their appeal.
2. Brief facts:
(a) The appellant is a temple situated in the State of Tamil G
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 H
48 SUPREME COURT REPORTS [2011) 10 S.C.R.
A 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
B 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
C 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
D deposited by the Temple was refunded only on 03.01.1996
without interest.
(c) Aggrieved by the decision cf the Postal Authorities, the
appellant, on 10.01.1996, sent a legal notice to the respondents
E 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
F 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.
G (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.
H
ARULMIGHU DHANDAYUDHAPANISWAMYTHIRUKOIL, PALANI, 49
TAMIL NADU, THR. ITS JOINT COMM. v. DIR. GEN. OF POST
OFFICES, DEPT. OF POSTS [P. SATHASIVAM, J.]
3. Heard Mr. S. Aravindh, learned counsel for the appellant A
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, B
Post Office; Palani-3rd Respondent herein and. whether the
appellant-complainant is entitled to any relief by way of interest?
Discussion
5. We have already adverted to the factual details. It is the C
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 D
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.
E
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'). ·
6. In exercise of the powers conferred by Section 15 of
the Government Savings Banks Act, 1873, the Central F
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 if came into force with effect from 01.04.1982. G
Among various Rules, we are concerned with Rules 16 & 17
which read as under:-
"16. Accounts opened lncorrectly.-(1) Where an
account is found to have been opened incorrectly under a
H
50 SUPREME COURT. REPORTS [2011] 10 S.C.R.
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
B 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
c 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 contraverition of rules.-Subject
D 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
E closed and the deposits made in the account refunded to
the depositor without interest."
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
F 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
G 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
H reason, where the account cannot be so converted, the account
ARULMIGHU DHANDAYUDHAPANISWAMY THIRUKOIL, PALANI, 51
TAMIL NADU, THR. ITS JOINT COMM. v. DIR. GEN. OF POST
OFFICES, DEPT. OF POSTS [P. SATHASIVAM, J.]
is to be closed and the deposits made in the accounts be A
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.
7. Before considering Rule 17, it is useful to refer the
8
communication dated 01.12.1995 of the Post Master-3rd
Respondent herein which reads as under:
"DEPARTMENT OF POSTS, INDIA
From
Post Master C
Palani 62A 601
To
The Joint Commissioner/
Executive Officer
AIM. Dhandayuthapani Swamy D
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.
E
. Sir,
I am to inform you that with effect from 01.04.1995
investments by Institution inlhe P.O. T:o. V.P.+N.S.C. VIII
issue is discontinued. As Devasthanam is also an F
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 O1. 04.1995.
The following TD accounts have been opened at Palani G
H.O. after 01.04.1995. Please close the accounts
irnmediately.
1) 5 year TD 2010417 dt. 05.05.1995, (2) 2010418 dt.
20.05.1995, (3) 2010419 dt. 31.05.1995, (4) 2010421 dt. H
52 SUPREME COURT REPORTS [2011) 10 S.C.R.
A 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)
B 2010435 dt. 16.08.1995.
Yours faithfully
(Sd/-) ........... .
Post Master
Palani 624 601"
C 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 Sc~eme
was not permissible and in fact discontinued from that date. It
is not in dispute that the appellant- Temple is also an institution
D 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
E 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 depositf:1d have been returned to the depositors
without interest. Though the appellant claimed interest and
F 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
G 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
H
ARULMIGHU DHANDAYUDHAPANISWAMYTHIRUKOIL, PALANI, 53
TAMIL NADU, THR. ITS JOINT COMM. v. DIR. GEN. OF POST .
OFFICES, DEPT. OF POSTS [P. SATHASIVAM, J.]
Postmaster Dargamitta, H.P. 0., Ne/lore vs. Raja A
Prameeefamma (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 B
per cent. But"~e 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 c
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
0
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 E
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 F
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 G
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 H
54 SUPREME COURT REPORTS [2011] 10 S.C.R.
A 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
B 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
c 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.
0
10. Before parting with this apreal, we intend to make the
following suggestions to the Post Offices dealing with various
accounts of deposits:
E (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
F benefits under different schemes.
(ii) It is desirable to exhibit all these details in
vernacular language in a c.onspicuous place to
facilitate the persons who intend to invest/deposit
money.
G
(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
H all the authorities concerned by using latest
ARULMIGHU DHANDAYUDHAPANISWAMYTHIRUKOIL, PALANI, 55
TAMIL NADU, THR. ITS JOINT COMM. v. DIR. GEN. OF POST
OFFICES, DEPT. OF POSTS [P. SATHASIVAM, J.]
technology methods i.e. by fax, e-mail or any other A
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 8
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 C
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.
12. With the above observations, we dismiss the appeal D
with no order as to costs.
N.J. Appeal dimissed.
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