Holding

A lost Indira Vikas Patra cannot be replaced under Rule 7(2), and therefore the holder is not entitled to a maturity payment in place of a duplicate certificate.

Summary

The respondents had purchased Indira Vikas Patras (IVPs) from post offices and subsequently lost the certificates. The post offices refused to issue duplicate certificates, relying on Rule 7(2) of the Indira Vikas Patra Rules, 1986, which bars replacement of lost, stolen, mutilated, defaced or destroyed certificates. The respondents first approached the District Consumer Disputes Redressal Forum, which dismissed their claim, and then filed civil suits that were decreed in their favour, directing payment of the maturity value. The Central Government appealed to the Supreme Court, contending that the lower courts erred in ordering payment despite the statutory prohibition on replacement. The Court held that an IVP is a bearer instrument akin to a currency note; therefore, a lost IVP cannot be replaced and the statutory rule must be followed. Consequently, the orders directing payment were set aside, but the Court directed that no refund be required where payment had already been made, and that no payment be required where it had not been made. The appeals were allowed without any order as to costs.

Issues considered

Whether a holder of a lost Indira Vikas Patra is entitled to receive the maturity value in lieu of a replacement certificate.
Whether Rule 7(2) of the Indira Vikas Patra Rules, 1986, which bars replacement of lost certificates, is valid and applicable.
Whether the directions of the lower courts ordering payment of the maturity value are sustainable in law.

Subjects

Indira Vikas PatraGovernment securitiesBearer instrumentLost certificateRule 7(2)Maturity valueConsumer forumCivil suit

Judgment

CENTRAL GOVERNMENT OF INDIA AND ORS. A
v.
KRISHNAn PARVETESH KULKARNI

APRIL 5, 2006

[ARIJITPASAYAT ANDR.V.RA VEENDRAN,JJ.] B

Government Securities:

Indira Vikas Patra Rules, 1986-Rule 7(2)-Respondent misplaced!
lost Indira Vikas Patras (IVPs) purchased from Post Office-Duplicate not C
issued by Post Office-Entitlement of Respondent to receive maturity value
in respect of the misplaced I lost IVPs-Held, not entitled-An !VP is akin
to an ordinary currency note which bears no name of the holder-Just as a
lost currency note cannot be replaced, similarly the question of replacing a
lost !VP does not arise-Besides, Rule 7(2) makes it clear that the Post Office D
cannot replace a !VP certificate which has been lost-(Jovernment Savings
Certificates Act, 1959.

Respondent had purchased Indira Vikas Patras (IVPs) from the Post
Office. But he misplaced I lost the IVPs. Post Office turned down the claim of
Respondent for duplicate IVPs on ground that there was no provision for E
replacement of a lost IVP. Against the action of Post Office, Respondent filed
petition before the District Consumer Forum, but the petition was dismissed.
Thereafter, Respondent filed suit before the Civil Court which decreed in its
favour. Revision petition thereagainst was dismissed by High Court.

In appeals to this Court the question which arose for consideration is F
whether Respondent was entitled to receive payment of maturity value in
respect of the misplaced I lost IVPs.

Allowing the appeals, the Court

HELD: I. An IVP is akin to an ordinary currency note. It bears no name
of the holder. Just as a lost currency note cannot be replaced, similarly the G
question of replacing a lost IVP does not arise. Rule 7(2) of the Indira Vikas
Patra Rules, 1986 makes it clear that a certificate lost, stolen, mutilated,
defaced or destroyed beyond recognition will not be replaced by any Post Office.
Similar is the position as regards the certificate which is either lost or stolen.
927 H
928 SUPREME COURT REPORTS [2006] 3 S.C.R.

A Undisputedly there was no challenge to the legality of Rule 7(2). In the absence ·
of a challenge to the provision, any direction should not really have been given.
It is fundamental that no direction which is contrary to law can be given.
(931-C-D)

2.1. It is, however, evident from the record that Respondent in the first
B appeal has been paid the amount pursuant to the direction given in the suit as
affirmed by the High Court. In the peculiar circumstances, the Respondent
shall not be liable to refund the amount in the peculiar circumstances of the
case. (931-E)

2.2. So far as the second appeal is concerned, if the appellants have not
C made the payment, they shall not be liable to make payment. But ifthe payment
has already been made as in the case of the first appeal then no recovery
shall be made. (931-F]

2.3. This direction is being given in view of the statement made by the
appellants that considering the small amount involved the appellant will not
D claim refund, but the position in law has to be set at rest as large number of
such claims are being made. (931-G)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4819 of2000.

From the Judgment and Order dated 12.8.1998 of the High Court of
E Karnataka at Bangalore in C.R.P. No. 2192/1996.
WITH
C.A. No. 1934/20006.

B.B. Singh, Ravinder Agarwal, V.K. Verma, Kumar Rajesh Singh and
. ~
P. Parmeswaran for the Appellant.
F
The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. Leave granted in SLP (C) No.11387 of2003.

These two appeals involve identical questions and are, therefore, taken
up for disposal together.
G
Challenge is to the direction given in the suit as affirmed in the order
passed in the Civil Revision directing payment of maturity value in respect
of Indira Vikas Patras (for short 'IVPs').

Undisputed position is that the respondent in each case had purchased
H IVPs from post offices. Respondent in each case was entitled to receive
CENTRAL GOVERNMENT OF INDIA 1•. KRISHNAJI PARVETESH KULKARNI [PASAYAT, J.J929

maturity value on presentation of the certificate. In each case respondent lost A
IVPs. In Civil Appeal No. 4819 of2000 the respondent claimed to have lodged
a complaint at the police station about the loss of IVPs. He also informed
about the loss of IVPs to the Postal Superintendent with the request to look
into the matter. The Pc:;tal Superintendent informed the respondent that there
is no provision for replacement of any IVP lost, stolen, mutilated, defaced or
destroyed. Therefore, the claim for duplicate IVPs was turned down. The B
respondent filed petition before the District Consumer Disputes Redressal
Forum taking the stand that post office was not justified in its action. Since
the IVPs are transferable from one person to another like currency notes
without involving the postal agency duplicated should be issued. The
Consumer Forum dismissed the application. Thereafter the respondent filed C
a suit before the Civil Court which decreed the suit in favour of the respondent.
Revision petition was filed before the High Court which was dismissed. The
High Court held that since the loss of the IVPs is bona fide and there is no
attempt to defeat the interest of the postal authorities and as none else had
made a claim on the basis of the said IVPs., the original holder of the IVPs
was entitled to payment of the IVPs on the maturity value. D
In the other appeal position is somewhat similar except that the
respondent had not approached the Consumer Forum. The respondent filed
a suit for declaration that he was owner of the IVPs which were lost and was
entitled to get payment of the maturity value. The suit was decreed .. Civil
revision petition was also dismissed on the ground that if the loss of the IVP E
is genuine and bona fide, the Central Government has a commitment to refund
the amount of security.

Learned counsel for the appellant submitted that the approach of the
Trial Court and the High Court is clearly contrary to law. He submitted that F
High Court had failed to notice its earlier decision in J. Kemparayappa v.
Union of India (W.P. No. 43361/1995 decided on 18.7.1996) that IVPs are
bearer bonds which are freely transferable and payment will have to be made
to the person producing them and therefore question of issuing duplicates
does not arise in the event of loss.
G
The transactions relating to IVPs are governed by the Indira Vikas Patra
Rules, 1986 (in short the 'Rules'). The Rules have been framed in exercise of
power conferred under the Government Savings Certificates Act, 1959 (in
short 'the Act'). The relevant Rule 7(2) reads as follows:

"7(2): A certificate lost, stolen, mutilated, defaced or destroyed beyond H
930 SUPREME COURT REPORTS (2006] 3 S.C.R.

A recognition, will not be replaced by any Post Office."

Some of the other provisions which are relevant are Rules 6, 8 and 9.
They read as follows:

"6. Issue of Certificate:-

B (I) On payment being made by cash, a certificate shall be issued
immediately and date of such certificate shall be the date of payment.

(2) Where payment for purchase of a certificate is made by locally
executed cheque, pay order or demand draft, the certificate shall not
be issued before the proceeds of the cheque, pay order or demand
c draft, as the case may be, are realized and the date of such certificates
shall be date of encashment of the cheque, pay order or demand draft,
as the case may be.

8. Encashment of Certificate:-

D (I) A certificate of any denomination may be encashed any time after
the expiry of a period offive years from the date of issue by presenting
it before the Post Office of issue.

(2) Where a certificate of any denomination has been purchased on

E
or after the I st April, 1987, it may be en cashed at any time after the
expiry of a period of five and half years from the date of issue by
presenting it before the Post Office of issue.
--
F
(2.A) Where a Certificate of any denomination has been purchased on
or after the Ist March, 1988 it may be encashed at any time after the
expiry of a period of five years from the date of issue by presenting
it before the Post Office of issue.
-
Provided that a certificate may be encashed at any other Post
Office if the office-in-charge of that Post Office is satisfied on
verification from the Post Office of issue that such certificate was
issued by the said Post Office.
G
9. Discharge of Certificate:- '
The person presenting a certificate for encashment shall sign in
the space provided on the back thereof in token of having received
payment and indicate thereon."
H
CENTRAL GOVERNMENT OF INDIA v.KRISHNAJI PARVETESH KULKARNI [PASAYAT, J.J93 l
"-
According to learned counsel for appellants sub-rule (2) of Rule 7 has A
clear application to the facts of the case. Reliance was placed on a decision
of the Delhi High Court where an identical issue was adjudicated in Civil Writ
Petition No.1848of1992. In that case reliance was placed on Rule 57(10) of
the Post Office Savings Bank Manual Volume - IL It was held that lost, stolen,
mutilated, defaced or destroyed IVPs cannot be replaced. It was pointed out
that Rule 7(2) of the Rules was not taken note of, yet the decision is an
B
authority for the proposition that the lost, stolen, mutilated, defaced or
destroyed IVPs cannot be replaced.
There is no appearance on behalf of the respondents in either of the
appeals.
... - c
An IVP is akin to an ordinary currency note. It bears no name of the
holder. Just as a lost currency note cannot be replaced, similarly the question
of replacing a lost IVP does not arise. Rule 7(2) makes the position clear that
a certificate lost, stolen, mutilated, defaced or destroyed beyond recognition
will not be replaced by any post office. Similar is the position as regards the
certificate which is either lost or stolen. Undisputedly there was no challenge D
to the legality of the Rule 7(2). In the absence of a challenge to the provision,
any direction should not really have been given. It is fundamental that no
direction which ·is contrary to law can be given.
,.-- Therefore, the impugned order in each appeal cannot be sustained. It
is, however, evident from the record in Civil Appeal No.4819 of 2000 the E
respondent has been paid the amount pursuant to the direction given in the
suit as affirmed by the High Court. In the peculiar circumstances, the
respondent shall not be liable to refund the amount in the peculiar
circumstances of the case. So far as other appeal is concerned, if the appellants
have not made the payment, they shall not be liable to make payment. But F
if the payment bas already been made as in the case of Civil Appeal No. 4819
of 2000 then no recovery shall be made.
This direction is being given in view of the statement made by leaned
counsel for the appellants that considering the small amount involved the
appellant will not claim refund, but the position in law has to be set at rest
G
as large number of such claims are being made.
~

The appeals are allowed to the aforesaid extent but without any order
as to costs.

B.B.B. Appeals allowed.
H