HIGH COURT OF JAMMU AND KASHMIR AT JAMMU. LPAOW No. 90 OF 2002 Union of India and ors Petitioners Vishnu Dutt Sharma & ors Respondent !Mr. Gagan Basotra, Advocate ^Mr. D. C. Raina, Sr. Advocate with Mr. Anil Verma, Advocate. Honble Mr. Justice Virender Singh, Judge Honble Mr. Justice Mohammad Yaqoob Mir, Judge Date: 19.08.2010 :J U D G M E N T:
Per: Virender Singh-J
The respondents (for short to be referred to as petitioners),
in furtherance of a scheme called as Monthly Income Scheme
(MIS) announced by the appellants (respondents in the main
writ petition), opened four accounts with the Post Office Saving
Bank at Mubarak Mandi, Jammu. All these accounts were joint
accounts. As per the Scheme, interest at the rate of 13% per
annum, which was prevalent at the relevant time, started
accruing. For reference, the details of the interest accrued from
the date of opening of the accounts till their closure is as under:-
S.No. Account No. Date up to which interest
paid
Amount interest already
paid
1. 602052 28.02.2000 Rs.47,385.00
2. 602378 26.04.2000 Rs.46,410.00
3. 602379 26.04.2000 Rs.46,410.00
4. 602436 27.04.2000 Rs.22,100.00
Total : Rs.1,62,305.00/-
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In fact, after the span of 2/3 years, vide communication
No.ICO-SB/1-7/2000-2001 dated 24.10.2000, the writ
petitioners were forced to close all the four accounts and a sum
of Rs.1,62,305/- which amount was already paid to the writ
petitioners by way of interest, was ordered to be deducted. In
addition to that, a sum of Rs.25,350/- as interest further
accrued on all the four accounts was also withheld. This gave a
cause of action to the writ petitioners to file the writ petition
(OWP No. 971/2000) seeking quashment of the communication
No.ICO-SB/1-7/2000-2001 dated 24.10.2000 with a further
prayer to refund Rs.1,62,305/- alongwith amount withheld to
the tune of Rs.25,350/-.
The stand taken by the appellants before the Writ Court
was that in an individual account the maximum amount, which
could be deposited was to the extent of Rs.2.04 lacs and in a
joint account, it was to the extent of Rs.4.08 lacs. Since the
petitioners had deposited Rs.10,80,000/-, which was in excess
of the permissible limit, they were not entitled to the interest
under the Scheme beyond the amount of Rs.4.08 lacs and, as
such, the aforesaid amount of Rs.1,62,305/- accrued as interest
was rightly ordered to be deducted while refunding the excess
amount. Since the petitioners were also not entitled to any
interest with regard to these four accounts, Rs.25,350/- was
also withheld. In fact, commission paid to the agent was also
deducted in this case.
The learned Single Judge did not agree with the stand
taken by the respondents and ultimately found it to be a case of
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no fault from petitioners side as they had not concealed any fact
at the time of opening of the accounts. It was further observed
that if the agent of the Post Office had committed any fault, the
department was at liberty to recover the amount from the agent,
but action of deducting the aforesaid amount of Rs.1,62,305/-
from the principal amount of the petitioners was unjustified. On
the same analogy withholding of Rs.25,350/- was also held to be
bad. Even deduction of amount on the basis of commission paid
to the agent from the petitioners amount was also considered to
be wrong. Ultimately the petitioners were held entitled to the
entire amount alongwith interest @ 15 % P.A. Aggrieved of the
said order/judgment, the appellants are before us through the
instant Letters Patent Appeal.
Record reveals that the instant appeal is not formally
admitted as yet. We, thus, admit it and dispose of.
Heard Mr. Gagan Basotra, learned counsel appearing for
the appellants and Mr. D. C. Raina, learned Sr. Advocate
assisted by Mr. Anil Verma, Advocate appearing for the
respondents. Writ Court record also perused.
Admittedly, the total deposit of the petitioners under the
MIS is to the tune of Rs.10.80 lacs. But the main thrust of
argument of Mr. Basotra is that it is in contravention of
statutory rules known as Post Office (Monthly Income Account)
Rules, 1987 as there was a limit of the amount to be deposited
in single account as well as joint account. Since the accounts
opened by the petitioners had exceeded the prescribed limit of
deposit, therefore, they were treated as irregular accounts and
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got closed in terms of Rule 14 of 1987 Rules. The petitioners,
thus, were not entitled to any interest accrued on the excess
amount. As it was already paid to them, therefore, deducted at
the time of refund of the actual amount exceeding the prescribed
limit of Rs.4.08 lacs. Mr. Basotra then submits that the
petitioners had, in fact, suppressed all the material facts at the
time of opening the accounts and the moment it came to the
notice of the Postal authorities, it swung into action. On the
same analogy, the amount of Rs.25,350/- ( amount of interest)
withheld was also justifiable action on behalf of the appellants
and even the agent commission has also been rightly deducted.
Per contra, Mr. Raina, learned Sr. Advocate, submits that
once the petitioners had not made any misrepresentation at the
time of opening the accounts, they cannot be put to any
disadvantageous position. According to him, the act done by the
agent of the Post Office would be deemed to be the act of
principal and once the respondents had allowed the petitioners
to continue with the deposit and used their money, they are
supposed to pay interest @ 13% P.A. upto the date of refund
atleast. According to Mr. Raina, even if the present case is
tested on the touchstone of equity, the petitioners are entitled to
the interest on their deposit. Mr. Raina then submits that it is
not only 13% P.A. interest to which the petitioners are entitled,
they are also entitled to interest upto date as the amount due to
them is lying with the appellants, may be on account of the stay
of the operation of the impugned judgment.
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We are not at all convinced with the submissions
advanced by Mr. Basotra for a very simple reason that
admittedly the amount remained deposited with the Post Office
till the accounts were closed, may be beyond the prescribed limit
of Rs.4.08 lacs. The plea taken by Mr. Basotra about the fault of
the agent does not stand the test of reasoning as the agent was
engaged by the Postal authorities only and, therefore, all his
actions would be deemed to be an act of the principal. The
Postal authorities just cannot get out of it. In such a situation,
it is not understandable, how the agent commission is deducted
from the petitioners. This action, on the face of it, is not
sustainable.
In view of the aforesaid factual backdrop, we do not find
any difficulty in holding that the petitioners are entitled to the
interest accrued upon their deposit with the Post Office, may be
over and above the limit prescribed under the rules. So
deduction of entire interest amount at the rate of 13% per
annum from the principal amount, in our considered view, is
absolutely an unfair action, which can not stand the test of
reasoning.
What will then be the rate of interest, in fact, is the next
issue for consideration before us. It goes without saying that the
petitioners are entitled to 13% interest per annum on the
amount deposited by them within the limit prescribed by the
rules. This is even fairly admitted by Mr. Basotra before us.
However, in our view, they are not entitled to the same rate of
interest on the excess amount remained deposited with the Post
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Office for about two years and more. The exact period is subject
to verification of record, which, admittedly, is in possession of
the appellants and, therefore, this exercise has to be carried out
by the appellants only. For determining the entitlement of the
rate of interest, we asked Mr. Basotra to apprise us about the
interest rate on saving bank account of post office in the year
when the petitioners had operated their accounts. He has
placed on record the photo-stat copy of the interest rate of
saving bank account for our perusal. For the year starting from
January, 1999 and ending 28.02.2001, the interest rate on
saving account is shown as 4.5% per annum and w.e.f.
01.03.2001 it is slashed down to 3.5% per annum. Mr. Raina
has also not controverted this fact. Keeping in view the interest
rate and the year in which the accounts of the petitioners were
closed, the appellants cannot just deny the entitlement of the
petitioners to the interest @ 4.5% per annum atleast, on the
excess amount remained deposited with them till all the four
accounts were finally closed. Therefore, the appellants can not
escape their liability from refunding the amount to the
petitioners as shall be due to them at the rate of 4.5% per
annum on the excess (limit) amount. We have arrived at this
conclusion presuming that the amount deposited by the
petitioners over and above the prescribed limit was an amount
deposited in saving bank account of post office fetching 4.5%
interest per annum, the interest rate prevalent at that point of
time. This approach of ours will keep the equitable balance
between the appellants and the depositors. The same rate of
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interest is to be calculated with regard to Rs.25,350/-, the
amount of interest withheld by the appellants vis-`-vis all the
four accounts. Ordered accordingly.
The argument advanced by Mr. Raina asking for interest
over interest on the excess deposit right from the passing of the
impugned judgment, apparently did not attract us, but when
appreciated in its right perspective, we find substance in it. May
be the operation of the impugned judgment has been ordered to
be stayed by this Court vide order dated 10.04.2002 observing
that payment of interest on the excess payment shall remain
stayed, the fact remains that the amount is still lying with the
Postal authorities and generating interest. After all, it is
petitioners money only, on which, they are entitled to the
interest may be at the rate of saving bank account of Post Office.
From 01.03.2001 and onward, rate of interest on saving bank
account is 3.5 % per annum. This is the position even till date
as stated by Mr. Basotra and also admitted by Mr. Raina,
learned Senior Advocate. Therefore, in our considered view, the
petitioners are entitled to 3.5% interest Per Annum from
06.02.2002 on the amount actually falls due after calculating it
at the rate of 4.5% per annum till it is refunded within the
stipulated period to be mentioned hereinafter. Ordered
accordingly.
At the cost of repetition, we may observe here that the
petitioners are also entitled to refund of commission of the agent
deducted by the appellants.
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The entire exercise of calculation and payment thereof to
the petitioners shall be completed within a period of four weeks
from the date, copy of the judgment/order is made available to
the concerned, in default thereof, the petitioners shall be entitled
to the interest at the rate of 7% per annum from the date of
lapse till payment is made.
As a sequel to the aforesaid discussion, the net result now
surfaces is that the appeal at hand is partly allowed in the
aforesaid terms by modifying the impugned judgment vis-`-vis
interest part only.
Connected CMP(s) also stands disposed of.
( Mohammad Yaqoob Mir ) ( Virender Singh )
Judge Judge
JAMMU
19.08.2010
Narinder