JUDGMENT - H. SURESH, J.:---The plaintiffs are the trustees of a Public Charitable Trust known as Mrs. Kasturbai Walchand Trust, which is a public trust, registered under the Bombay Public Trusts Act, 1950. In order to promote savings, the defendants the Union of India issued from time to time National Savings Certificates carrying interest as may be specified and encashable after a period as may be specified in the conditions of the said National Savings Certificates. The defendants have inter alia issued 7 Year National Savings Certificates (II Issue), maturing on the expiry of seven years from the date of its purchase. In respect of the said certificates, on the expiry of the maturity period the defendants pay to the holder of the said Certificates at Rs. 141/- for the certificate of the face value of Rs. 100/-. Each certificate bears on the face of it a promise by the defendants to pay the amount stated therein on the expiry of the maturity period. The said certificates are sold to the public through the agents as also through the Post Offices all over the Country. The plaintiffs were desirous of purchasing 7-Year National Savings Certificates (II Issue) in the name of the said Trust of the value of Rs. 1,00,000/-. They passed a suitable resolution in this behalf on 22nd February, 1972. Accordingly, they purchased the certificates after applying for the same to the General Post Office, Bombay, on a prescribed application form. The Certificates were of the face value of Rs. 5,000/- each and in all they purchased 20 such certificates. The Certificates matured for payment in 1979 on the expiry of the period of seven years from the date of their purchase. When they approached the Presidency Post Master G.P.O. Bombay, for encashment of those Certificates the Supervisor in the office of the Presidency Post Master made the following endorsement: "Rejected Certificates are issued in contravention of S.C. Rules as the Charitable Trust whose donations are free from Income tax cannot purchase certificates. Hence the same will have to be discharged with face value". The Presidency Post Master thus gave to be plaintiff's only a sum of Rs. 1.00,000/- and refused to pay the interest amount amounting to Rs. 41,000/-. The plaintiffs pointed out that was contrary to law end contrary to the certified dues and, therefore, demanded the full amount. The defendants would not pay. The Presidency Post Master thus gave to be plaintiff's only a sum of Rs. 1.00,000/- and refused to pay the interest amount amounting to Rs. 41,000/-. The plaintiffs pointed out that was contrary to law end contrary to the certified dues and, therefore, demanded the full amount. The defendants would not pay. hence the plaintiffs had to file the present suit for the recovery of the said sum of Rs. 41,000/- together with interest, thereon at the rate of 15 per cent per annum. 2. It appears that these certificates are issued under the powers conferred on the defendants by the Government Saving Certificates Act, 1989 (46 of 1959) (hereinafter referred to as the said Act) and in exercise of the powers conferred by section 12 of the said Act, the defendants have framed rules called. The Post Office Savings Certificates Rules, 1960 (hereinafter referred to as the said Rules). The defendants have sought to construe these Rules and on the basis of these rules they have denied the payment of the said sum of Rs. 41,000/- to the plaintiffs. The plaintiffs have submitted that they had applied for these Certificates as per the application form prescribed by the defendants and the defendants accepted the said form and issued the certificates and, therefore, as a result of the acceptance of the said application form and issuance of the said certificates, a contract was entered into between the said Trust and the defendants whereby the defendants agreed to pay to the said Trust the amounts mentioned in each of the said certificates stated to be payable on expiry of seven years from the date of the issue of the said certificates. They further submit that retention of the moneys of the plaintiffs without payment of interest is contrary to the very object of the said Act. They also submit that there could be no rule prescribing payment of interest and if there is any such rule that should be considered as ultra virus the Act. They have also taken up various contentions challenging the said Rules. 3. The defendants have filed their written statement. There is no dispute about the application form submitted by the plaintiffs and the issuance of the certificates. They have also taken up various contentions challenging the said Rules. 3. The defendants have filed their written statement. There is no dispute about the application form submitted by the plaintiffs and the issuance of the certificates. Their only contention is that if one has regard for the said Rules, as framed under the said Act, the plaintiffs are not entitled to invest this amount and consequently they are not entitled to receive any amount by way of interest. They, therefore, submit that the suit is liable to be dismissed with costs. 4. On the basis of the above pleadings, the following issues have been framed: ISSUES 1. Whether the plaintiffs are entitled to claim interest in respect of the 7-Year National Savings Certificates (II Issue)? 2. Whether Rule 13 of said Rules is ultra vires as stated in paragraph 6A to 6E of the plaint? 3. Whether the plaintiffs are entitled to a reasonable compensation as stated in para 6G of the plaint? 4. What relief? 5. The plaintiffs have tendered a compilation of all the relevant documents and they have been exhibited as Exhibit 'A' (Collectively). There is an application made by the plaintiffs and signed by all the then trustees of the Trust. The application expressly says that they were buying these certificates in the name of the plaintiffs Trust. They accordingly purchased these certificates of the denomination of Rs. 5000/- each, all in the name of the said Trust. When the certificates matured, they forwarded the certificates together with the letter dated 7th May, 1979 addressed to the Presidency Postmaster, G.P.O., Bombay, and requested him to issue a cheque for the principle amount of Rs. 1,00,000/- together with interest thereon for seven years. The plaintiff were told that the said certificates were issued in contravention of the said Rules. Therefore, the question is whether a public charitable trust is entitled to purchase the 7-Year National Savings Certificates (II Issue) or not ? 6. The said Rules have been framed by virtue of the powers conferred under section 12 of the said Act. The object of the said Act is to enable the Government to prescribe suitable authorities for the sale and for discharge of the National Saving Certificates. 6. The said Rules have been framed by virtue of the powers conferred under section 12 of the said Act. The object of the said Act is to enable the Government to prescribe suitable authorities for the sale and for discharge of the National Saving Certificates. Prior to the said Act, the issuance of the National Saving Certificates was governed by the Post Office National Saving Certificates Ordinance, 1944, issued under section 72 of the Ninth Schedule to the Government of India Act 1935. There is no provision in the said Act either prescribing class of persons who are entitled to invest in such National Savings Certificates or prohibiting any class who cannot invest in such National Savings Certificates. Under section 12 of the said Act, the Central Government has been empowered to make rules to carry out the purpose of the said Act and, inter alia, it provides that every rule made under this section shall be laid before each House of Parliament. Thus it is clear that even if rules are to be made as provided herein, they cannot be made to defeat the very object of the Act. Needless to say that the object of such a legislation is to promote savings. Therefore, if a particular class of investors has to be excluded under the rules, there has to be a proper classification in that behalf and there must be a valid reason for such classification, having nexus to the object of the Act. 7. The defendants rely on the following Rules : "4. Types of certificates and issue thereof - (1) The certificates shall be of the following types, namely --- (a) Single Holder Type Certificate; (b) Joint 'A' Type Certificate; and (c) Joint 'B' Type Certificate. 2. (a) Single Holder Type Certificates may be issued to; (i) an individual person (whether an adult or minor); (ii) a banking company and a co-operative land mortgage bank; (iii) a company; (iv) a corporation; (v) a co-operative society including a co-operative bank; (vi) an association, institution or body registered as a society under any law for the time being in force; (vii) a firm registered under the Indian Partnership Act, 1932 (9 of 1992); (viii) a local authority; and (ix) a provident fund, (b) Joint 'A' Type Certificates may be issued jointly to two adults payable to both holders jointly or to survivor. (c) Joint 'B' Type Certificates may be issued jointly to two adults payable to either of the holders or the survivor. 5. The limits upto which certificates may be purchased - The maximum permissible holding of a certificate or certificates shall be, as shown below for each class of Investor, namely : ----------------------------------------------------------------------------------------------------- Class of Investor Limit Rs. ----------------------------------------------------------------------------------------------------- (i) an adult or a minor 75,000/- (ii) two adults joints 1,50,000/- (iii) any trust which is registered as a Society under any law for the time being in force (other than a Charitable trust donations to which qualify for income tax relief), any gratuity fund constituted as an irrevocable trust, a banking company, a company, a corporation, a firm registered under the Indian Partnership Act, 1932 (9 of 1932), an association, institution or body registered as society under any law for the time being in force other than association, Institution or body referred to in Clause (iv) ............ Rs. 50,000/- (iv) a co-operative society including a co-operative bank and co-operative land mortgage bank, a local authority, an association, institution or body registered as a society under any law for the time being in force and the donations to which association, institution or body are exempt from the payment of income-tax ..... Rs. 1,00,000/- (iv-a) an approved gratuity fund as defined in Clause (5) of section 2 of the Income-Tax Act, 1961 (43 of 1961), the income from which is exempt from payment of income-tax by virtue of sub- clause (iv) of Clause 25 of section 10 of the said Act ..... Rs. 1,00,000/- (v) a provident fund ................ Without limit." Rule 13 says that any certificate purchased or acquired in excess of the limits prescribed in these rules or in contravention of these rules, shall be encashed by the holder at the face value of such certificate and no interest shall be paid either on the excess holding or any holding in contravention of these rules. However, under the same rule, there is a proviso, which enables the Central Government to authorise payment of simple interest on the face value of the certificate, if it is satisfied that the purchase or acquisition is due to a bona fide mistake on the part of the holder thereof. Mr. However, under the same rule, there is a proviso, which enables the Central Government to authorise payment of simple interest on the face value of the certificate, if it is satisfied that the purchase or acquisition is due to a bona fide mistake on the part of the holder thereof. Mr. Jaisinghani submitted that if one reads Rule 4, sub-rule (2) together with Rule 5, sub-rule (iii) and (iv), it becomes clear that a charitable trust donations to which qualify for income-tax relief, is not entitled to invest at all. He submitted that donations to a charitable trust are already exempt from payment of income-tax by virtue of the provisions of section 80-G of the Income-Tax Act, 1961. He further submitted that interest under these Saving Certificates are also income-tax fee. He submitted that, therefore, a charitable trust is not entitled to invest any amount in the National Saving Certificates, as this would amount to giving them a double benefit, as far as payment of income-tax is concerned. 8. I have not been able to appreciate this contention at all. As far as section 80-G of the Income-Tax Act, 1961 is concerned, the benefit with regard to payment of income-tax goes to the donor and not to the Charitable Trust as such. As far as a Public Charitable Trust is concerned, under section 11 of the Income-Tax Act, they get exemption from payment of income-tax, because it is a charity under section 11 of the Income-Tax Act. Therefore, there can be no rule which can deny them the right to save in any Saving Scheme just because they are exempted from payment of income-tax under the provisions of the Income-Tax Act. 9. Even otherwise, if one considers the said rules properly, I find no justification for the interpretation, which the defendants sought to advance on these rules. Mr. Jaisinghani relies on Rule 5, sub-rule (iii) and submits that under that rule a trust which is registered as a Society under any law for the time being in force can invest upto a limit of Rs. 50,000/-. In that Rule "a charitable trust, donations to which qualify for income-tax relief" has been excluded. He, therefore, submits that by virtue of this exclusion, such a charitable trust is not entitled to invest at all. In my view, if one construes the rule as a whole, that rule relating to investment upto Rs. 50,000/-. In that Rule "a charitable trust, donations to which qualify for income-tax relief" has been excluded. He, therefore, submits that by virtue of this exclusion, such a charitable trust is not entitled to invest at all. In my view, if one construes the rule as a whole, that rule relating to investment upto Rs. 50,000/- applies to a trust which is registered as a society but excluding a charitable trust, donations to which qualify for income-tax relief. In other words, it can as well be argued that, as far as charitable trust is concerned, the limit of Rs. 50,000/- would not apply at all. But I think the rule should be read along with Rules 4 and 5 sub-rule (iv). Under Rule 4, it has been set out to which class of investor, single holder type certificates may be issued. It includes an individual a banking company and a co-operative land mortgage bank, a company, a corporation, a co-operative society including a co-operative bank and an association institution or body registered as a society under any law for the time being in force, and also a firm registered as a partnership under the Partnership Act, a local authority and a provident fund. I cannot understand as to why a charitable trust registered under the Trusts Act should be excluded from the categories of persons to whom such certificates could be issued. It is true that under the rule, a public charitable trust, as such, is not mentioned. But I think Rule 4, sub-rule (2)(iv) expressly includes an association, institution or body registered as a society under any law for the time being in force. It need no necessarily be an institution or a society registered as a society under the Act as such. It cannot be an association of persons not registered under any law. Therefore, if there is any association of persons registered as required under the law, such as association or an institution would automatically come within the category of persons mentioned under this rule. For example, a hospital which is generally an institution and also a public charitable trust registered under the law such as Bombay Public Trust Act, would definitely come within the meaning of an association or an institution or a body registered as a society under any law for the time being in force. 10. For example, a hospital which is generally an institution and also a public charitable trust registered under the law such as Bombay Public Trust Act, would definitely come within the meaning of an association or an institution or a body registered as a society under any law for the time being in force. 10. Again, under Rule 5, sub-rule (iv), which includes, amongst others, a co-operative society, including a co-operative bank, etc., and also "an association, institution or a body registered as a society under any law for the time being in force and the donations to which association, institution or body are exempt from the payment of income-tax" are entitled to invest upto a limit of Rs. 1 lakh. In my view, this rule negative the entire contention advanced on behalf of the defendants. It is expressly stated herein that any association, or an institution or a body registered under any law, even though exempt from the payment of income-tax, is entitled to invest upto a limit of Rs. 1,00,000/-. Therefore, exemption from payment of income-tax is not the criterion for the purpose of excluding any institution which is entitled to invest upto the limits as prescribed under these Rules. That is of no consequence. What is relevant is that there should be an association or an institution or a body registered under the law and to such an association, institution or body, donations are exempt from the payment of income-tax. Such a body can certainly invest upto the limit of Rs. 1,00,000/-. The plaintiffs plainly fit it, in this description as given under Rule 5, sub-rule (iv) of the said Rules. Therefore, the defendants were plaintly not justified in denying, payment of interest. They did so under an erroneous interpretation of the rule, misconstruing Rule 5, sub-rule (iii), wherein a charitable trust has been excluded. It does not mean that under all clauses of Rule 5, a charitable trusts stand excluded. 11. Mr. Jaisinghani submitted that it is further stated in the clarification given by Government, that if charitable trusts are allowed to invest, that will also affect the deposit mobilisation programme of other financial institutions such a Nationalised Banks, which the Government would like to avoid. This clarification is no rule. This is issued by the executive on its own interpretation and understanding of the law. This clarification is no rule. This is issued by the executive on its own interpretation and understanding of the law. The rule does not offer any such restricted interpretation sought to be put forward by the Government. It is not necessary for me to go into the reasons as to why they have interpreted the rue in this manner when the rule clearly permits that all associations, institutions or bodies registered under any law, and which are exempt from payment of income tax can invest upto a limit of Rs. 1,00,000/-. 12. Mr. Jaisinghani also submitted that it is only in the issue of the National Saving Certificates (II Issue) interest accrued thereon has been made free from income-tax, while in all other Issues of the National Saving Certificates there is no such exemption. He also pointed out by referring to the said rules that in respect of other Schemes, there is no mention of any class of persons who may be entitled to invest, whereas in the present Scheme, under Rule 4 a specified class of investors has been provided for. He further submitted that in that class a charitable trust has been excluded. I do not find any such exclusion with regard to the other Savings Schemes, the Government might not have prescribed a particular class of persons who entitled to invest in such schemes. It is also possible that for any particular reason they have mentioned a list of persons who could invest in the present scheme. But I am concerned with the rule as it stands. The rule is wide enough to include all the institutions which are registered under any law and which are exempt from payment of income-tax and they are permitted to invest in this Saving Scheme. 13. Mr. Jaisinghani also sought to argue that if at the time of the application for the purchase of the National Savings Certificates, the plaintiffs had clearly indicated that they were a charitable trust and that they had the certificate of exemption under section 80-G of the Income-Tax Act, in all probability, the Postal Authorities would have rejected the application of the plaintiffs and would have pointed out to them that they were not entitled to purchase such certificates. I find no substance in the submission. I find no substance in the submission. The plaintiffs had, while making the application for the purchase of the certificates, not only forwarded a resolution passed by the Trust of the plaintiffs but that they had also furnished a copy of the certificate of registration showing that the plaintiffs Trust has been registered under the Bombay Public Trusts Act. In any event, it is not now open to the defendants to contend having issued the certificates, that they would not pay any interest on the plea of misrepresentation or non-representation of the facts on the part of the plaintiffs. 14. Mr. Bharucha has also submitted that it is possible for one to construe that the list of persons mentioned under Rule 4, sub-rule (2) is not exhaustive. In that context, he submitted that the rule says that the certificates "may be" issued to the following class of persons. On that basis, Mr. Bharucha submitted that it does not mean that they are the only persons who are entitled to invest and nobody else. However, having regard to the interpretation of the rule as given by me above, it is not necessary for me to give any definite finding in this behalf. 15. Mr. Bharucha has also submitted that even otherwise if one has regard for sections 65 and 70 of the Contract Act, the defendants having received the amount of Rs. 1,00,000/- from the defendants under an agreement evidenced by the application made by the plaintiffs and the acceptance thereof by the defendants, the defendants are bound to restore the advantage so availed of and also to make compensation in this behalf. Mr. Bharucha submits that in the present case if the defendants have discovered that the issuance of the certificates was void, then, in that event, they cannot say that they would not pay any interest and that they would return only the principle amount. He also submitted that the Government having received this amount, it can be presumed that the Government utilised this amount-may be for any of its project or business. In any event, the Government is bound to return the amount together with interest, if the Government wants to say that the amount had been received under a mistake or under any statute which makes receipt of such amount as void. 16. In any event, the Government is bound to return the amount together with interest, if the Government wants to say that the amount had been received under a mistake or under any statute which makes receipt of such amount as void. 16. I think, I need not decide this issue inasmuch as, in my view on a plain interpretation of the Rule, the plaintiffs are entitled to invest in the present scheme and consequently they are entitled to have the full amount together with interest thereon. 17. I, therefore, answer the issues as follows : Issue No. 1.: In the affirmative. Issue No. 2.: I have not decided this issue, inasmuch as, even under the Rules, the plaintiffs are entitled to receive the amount. Issue No. 3.: This issue is also not decided. Issue No. 4.: See below. O R D E R There will be a decree in the sum of Rs. 41,000/- (Rupees forty one thousand) together with interest thereon at the rate of 12 per cent per annum from 11-4-1979 till payment together with costs of the suit. This matter was kept in my Chamber on one or two occasions earlier and also today, inasmuch as, Mr. Jaisinghani with Mr. Rao, appearing for the Government, submitted that the costs ordered in the suit should be forgone. Miss Kapadia stated, which I now record, that if the defendants pay the decretal amount together with interest due and payable as per the decree, on or before 28-2-1990, the plaintiffs would forgo their claim for costs of the suit. -----