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Andhra High Court · body

2008 DIGILAW 151 (AP)

K. Susheela v. Ministry of Communications

2008-02-22

G.YETHIRAJULU

body2008
ORDER This Writ Petition has been filed by the petitioner seeking to declare the action of the first respondent in issuing the proceedings dated 02.09.2000 denying the interest on the deposits made by the petitioner beyond the limit provided under the Rules, as arbitrary, illegal and unconstitutional. 2. The petitioner's husband by name Rajamallu made deposits in multiple accounts at Mancherial, Ramakrishnapuram and Mandamarri Post Offices by opening 12 accounts under Post Office Monthly Income Scheme (P.O. M.I.S.) for a total amount of Rs.6,18,000/-. Subsequently, the said accounts were converted into joint accounts. Though her husband deposited the amounts in different Post Offices, none of the respondents' office staff have informed that one should not invest beyond an amount of Rs.4,08,000/- in joint account, in which event, the depositor will not get any interest on the excess amount deposited. Some of the agents acting on behalf of the respondents persuaded the petitioner and her husband to invest the amounts and also assured that one can deposit the amount they want to deposit. Accordingly, they deposited Rs.6,18,000/- in 12 accounts. When the petitioner asked for payment of the amounts on maturity of the deposits, the first respondent through letter dated 02.09.2000 informed that the interest amounting to Rs.1,27,530/- was deducted on the ground that the interest has been paid on the amount over and above Rs.4,64,000/-. 3. The petitioner submits that Rule 12 of the Post Office (M.I.S.) Rules, 1987 deals with 'power to relax' and as per this Rule, when the Central Government is satisfied that the operation of any of the provision of these Rules causes undue hardship to the depositors, it may, by order for reasons to be recorded in writing, relax the requirement of that provision in a manner not inconsistent with the provisions. 4. Rule 16 of the Post Office Savings Bank General Rules, 1981 clearly states that the accounts opened incorrectly be converted into another category ab initio if the depositor is eligible to open an account of such category on the date of application. 5. The learned counsel for the respondents submitted that by virtue of Rules 17 and 18 of the Post Office Savings Bank General Rules, 1981, the petitioner is not entitled for interest and the first respondent has rightly deducted the interest paid on the excess amount and only paid the balance amount to the petitioner. 5. The learned counsel for the respondents submitted that by virtue of Rules 17 and 18 of the Post Office Savings Bank General Rules, 1981, the petitioner is not entitled for interest and the first respondent has rightly deducted the interest paid on the excess amount and only paid the balance amount to the petitioner. The Monthly Income Scheme was introduced for those investors who want to invest in lumpsum and earn interest on monthly basis for their livelihood. The Union Government has introduced the scheme as a boom for retired persons. In pursuance of introduction of the said scheme, many retired people and middle class families have deposited their amounts in Post Office Saving Accounts and also in Monthly Income Scheme to get monthly interests for their livelihood. The said Scheme gained popularity also on account of tax exemption under Section 80 of the Income Tax Act. 6. For proper adjudication, it is appropriate to extract the following Rules: (i) Rule 4 of the Post Office Savings Account Rules, 1981 reads as follows. "Rule 4: Opening of Account: A depositor may operate more than one account under these rules subject to the condition that deposits in all accounts taken together shall not exceed rupees two lakhs four thousand in single account and rupees four lakhs eight thousand in joint account." (ii) Rule 6 (5) reads as follows: "No interest shall be allowed on any sum in excess of the maximum balance specified." (iii) Rule 4 of the Post Office Monthly Income Account Rules, 1987 reads as follows: "a depositor can operate more than one account under these rules subject to the condition that the deposits in all accounts (single A/C & Share in joint accounts) taken together shall not exceed Rs.2,04,000/-. It is thus clear that an individual can invest only to the extent of Rs.2,04,000/- in Monthly Income Accounts." 7. As per Rule 6 (5) of Post Office Savings Account Rules, 1981, no interest shall be allowed on any sum deposited in excess of the maximum balance specified. 8. It is an undisputed fact that the petitioner has deposited different amounts into various accounts and none of those accounts has exceeded the prescribed deposit limit. As per Rule 6 (5) of Post Office Savings Account Rules, 1981, no interest shall be allowed on any sum deposited in excess of the maximum balance specified. 8. It is an undisputed fact that the petitioner has deposited different amounts into various accounts and none of those accounts has exceeded the prescribed deposit limit. The first respondent noticed that all the accounts were opened in the name of a single depositor in various Post Offices and the amount put together exceeded the maximum amount prescribed under the Rules. Though the Rules prescribed that more than two accounts shall not be opened by any person, it was a mistake occurred on the port of the Post Master also in allowing the petitioner to open more accounts contrary to the Rules. 9. The petitioner contended that the agents who get the commission also made the petitioner and her husband to believe that there will not be any problem if they open more accounts and they will also get interest on all the accounts without any objection. Had there been any objection at the time of opening of accounts or obtaining a declaration from the depositor that the depositor did not open more than two accounts in any Post Office, that would have made the petitioner and her husband to bind themselves that they have knowledge about the Rule that they should not open more accounts than two. There was a mistake on the part of the Post Master also in allowing the petitioner to open more accounts in the name of the petitioner and her husband. Therefore, as the deposits were not made intentionally after knowing the Rules, the petitioner cannot be deprived of the interest accrued thereon. 10. In view of the facts and circumstances of the case, I deem it appropriate to direct the respondents not to recover the amount already paid towards interest on the excess deposit made by the petitioner. 11. Accordingly, the Writ Petition is allowed. The amount, if any, deducted towards payment of interest to the petitioner shall be refunded to him, after calculating the amount, within two months from the date of receipt of a copy of this order. It is needless to mention that the petitioner is entitled for interest on the entire amount kept in the various Post Offices. No order as to costs.