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High Court Of Orissa
ARIJIT PASAYAT, B. P. DAS
RAJAT KUMAR RATH - Appellant
Versus
GOVT.OF INDIA - Respondent
O. J. C. 15013 Of 1997
Decided On : 09/15/1999
GOVERNMENT SAVINGS BANKS ACT, 1873 - SECTION 15 - POST OFFICE MONTHLY INCOME ACCOUNT RULES, 1987 - RULES 17, 18 - INDIAN CONTRACT ACT, 1872 - SECTION 23 - TRANSFER OF PROPERTY ACT - SALE OF GOODS ACT - SECTIONS 4, 19, 20 - INTERPRETATION OF STATUTES - WAIVER OF STATUTORY PROVISIONS - PUBLIC POLICY - INTEREST ON DEPOSITS - RECOVERY OF EXCESS INTEREST - LEGALITY OF TRANSACTIONS.
Fact of the Case:
Petitioners opened accounts in the General Post Office, Bhubaneswar captioned 'monthly Income Scheme' (MIS). The deposits are hereinafter referred to as MIS deposits. On different dates nine accounts were opened by the petitioners jointly. Additionally one account was opened by petitioner No. 1. The first account, i. e. , MIS No. 1292 was opened on 3-6-1994 for a sum of Rs. 1,20,000/- and on the same day Savings Account No. 575272 was opened in the name of petitioners. The arrangement was that the monthly interest accrued shall be credited automatically to the Savings Bank Account. When subsequent Monthly Income Scheme deposits were opened there was an endorsement for automatic credit of interest every month in the Savings Account. Subsequently another Savings Account was opened jointly in the names of petitioners bearing No. 575659. That was done on the date four MIS accounts were opened on 28-12-1994. Endorsements were made in the MIS deposit books as well as the Savings Account Book for automatic credit of interest every month. In respect of 8 of the MIS deposits, automatic credit of interest monthly was to be done in the Savings Account No. 575272, while in other two MIS deposits automatic credit of interest was to be done every month in Joint Savings Account No. 575659. On the basis of objections raised by the opposite parties-postal authorities to the effect that no interest would be payable in excess of the maximum balance of Rs. 4,08,000/-, petitioners were directed to refund a sum of Rs. 90,415/-, which according to the postal authority, the petitioners had earned as interest by making excess deposit in MIS accounts.
Finding of the Court:
The court held that the direction for recovery of excess interest from the petitioners was not sustainable as the transactions were not covered by Section 23 of the Indian Contract Act, 1872. The court further held that the petitioners could have been permitted to make deposits under other Schemes and that the postal authorities were aware of the total extent of the deposit made by the petitioners. The court also held that the Central Government has the power to relax the rules and that the petitioners' prayer for relaxation should have been considered.
Issues: 1. Whether the transactions between the petitioners and the postal authorities were covered by Section 23 of the Indian Contract Act, 1872? 2. Whether the petitioners could have been permitted to make deposits under other Schemes? 3. Whether the postal authorities were aware of the total extent of the deposit made by the petitioners? 4. Whether the Central Government has the power to relax the rules? 5. Whether the petitioners' prayer for relaxation should have been considered?
Ratio Decidendi: 1. The court held that the transactions between the petitioners and the postal authorities were not covered by Section 23 of the Indian Contract Act, 1872, as the petitioners were not seeking enforcement of an illegal contract but rather the withdrawal of interest that had already accrued. 2. The court held that the petitioners could have been permitted to make deposits under other Schemes, as it was evident from the records that the petitioners were at no point of time asked to withdraw the amount in excess of the prescribed limit. 3. The court held that the postal authorities were aware of the total extent of the deposit made by the petitioners, as the Savings Bank Pass Books themselves reflect the total amount of deposit received from the various deposits and were being duly credited. 4. The court held that the Central Government has the power to relax the rules, as Rule 18 of the Post Office Monthly Income Account Rules, 1987 provides that the Central Government may, by notification in the Official Gazette, relax any of the provisions of these rules in respect of any class of depositors or deposits, subject to such conditions, if any, as may be specified in the notification. 5. The court held that the petitioners' prayer for relaxation should have been considered, as the Central Government can deal with a particular situation in a just and equitable manner while considering a case of relaxation.
Final Decision: The writ application was allowed, but without any order as to costs.
A. PASAYAT, A. C. J.
( 1 ) PETITIONERS call in question legality of directions as contained in the orders dated 6-6-1997 and 26-9-1997 (vide Annexures 13 and 16 respectively to the writ application) passed by opposite party Nos. 1 to 4. By the aforesaid directions the petitioners have been called upon to refund certain amounts received then as interest.
( 2 ) FACTUAL position is almost undisputed and is essentially as follows :petitioners opened accounts in the General Post Office, Bhubaneswar captioned 'monthly Income Scheme' (in short, the 'scheme' ). The deposits are hereinafter referred to as MIS deposits. On different dates nine accounts were opened by the petitioners jointly. Additionally one account was opened by petitioner No. 1. The first account, i. e. , MIS No. 1292 was opened on 3-6-1994 for a sum of Rs. 1,20,000/- and on the same day Savings Account No. 575272 was opened in the name of petitioners. The arrangement was that the monthly interest accrued shall be credited automatically to the Savings Bank Account. When subsequent Monthly Income Scheme deposits were opened there was an endorsement for automatic credit of interest every month in the Savings Account. Subsequently another Savings Account was opened jointly in the names of petitioners bearing No. 575659. That was done on the date four MIS accounts were opened on 28-12-1994. Endorsements were made in the MIS deposit books as well as the Savings Account Book for automatic credit of interest every month. In respect of 8 of the MIS deposits, automatic credit of interest monthly was to be done in the Savings Account No. 575272, while in other two MIS deposits automatic credit of interest was to be done every month in Joint Savings Account No. 575659. On the basis of objections raised by the opposite parties-postal authorities to the effect that no interest would be payable in excess of the maximum balance of Rs. 4,08,000/-, petitioners were directed to refund a sum of Rs. 90,415/-, which according to the postal authority, the petitioners had earned as interest by making excess deposit in MIS accounts. Information given to the petitioners by the postal authority reveals that under the Post Office Monthly Income Account Rules, 1987 (in short, the 'rules') framed under Section 15 of the Government Savings Banks Act, 1873 (in short, the 'act') a limit was fixed up to which the deposits can be accepted by the post office. It is the case of opposite parties that the deposit having exceeded the amounts specified in the Rules, the petitioners were not entitled to get interest. Petitioners took the stand that no such objection was ever raised by the postal authorities when they opened the accounts. They were fully aware and conscious of the amount being deposited in various accounts and in fact they had given an impression to the petitioners that the rule is not being insisted upon, and rigidly followed.
( 3 ) PETITIONERS' stand in essence is that on 28-12-1994 when the deposits exceeded the limit prescribed, there was no objection raised by the postal authorities and they accepted the deposits and the petitioners went on getting monthly interest in the Savings Bank Account. If the authorities have committed any mistake, the petitioners should not be made to suffer. They could have deposited the amounts elsewhere and with the very same postal department, and invested the amounts in other Schemes like Indira Vikas Patra, Kisan Vikas Patra, National Savings Certificates etc. In all these deposits interest that would have accrued to the petitioners would have been much more than which was granted to their accounts under MIS deposits. The audit authorities made objection after three years and that cannot be a ground to cause financial loss to the petitioners. Had the objection been pointed out immediately, the question of petitioners being required to refund interest received would not have arisen. Additionally it is submitted that under the Rules, the Government of Ind
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