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2008 DIGILAW 729 (CAL)

Suman Kumar Banerjee v. UNION OF INDIA

2008-07-22

DIPANKAR DATTA

body2008
Judgment :- (1.) THERE are three Agency Systems to promote Post Office Small Savings schemes of the Central Government, viz (1) Standardised Agency System (hereafter SAS) (2) Public Provident Fund (hereafter PPF) Agency System and (3)Mahila Pradhan Kshetriya Bachat Yojana (hereafter MPKBY) Agency System. A female agent can obtain all the three agencies while a male agent can have only the first two agencies. For canvassing small savings schemes, the agents are paid commission at such rates prescribed from time to time for various savings schemes. The commission for various schemes is paid to the agents at source at the time of depositing money with the post offices or banks where the schemes are being operated. SAS is confined to canvassing for sale of Kisan Vikas Patras, National savings Certificates (VIII-Issue), Deposits in Time Deposit Accounts, Monthly income Scheme Accounts and Senior Citizens Savings Scheme Accounts whereas under MPKBY Agency System only women agents are appointed to canvass for deposits in Post Office 5-Year Recurring Deposit Accounts. The PPF Agency system is confined to only deposits in PPF accounts. At the time of appointment, the SAS and MPKBY agents are required to execute an agreement with the Government which contains the terms and conditions of the agency. For PPF agency, no formal agency agreement is required to be executed but the agents are required to accept and sign the terms and conditions of the agency in the prescribed form (source: Hand Book for Post office, Part VI 2005-06, by Sri A. N. Dureja). (2.) THE 15 (fifteen) petitioners herein claim to be agents under the aforesaid agency Systems of Post Office Small Savings Schemes introduced by the Central government. SAS agents are appointed by the State Government (paragraph 5 of chapter 6 of the Hand Book referred to supra). Certificate of authority to act as agents has been issued in favour of the petitioners by the concerned officer attached to the Finance (Small Savings) Department, as is revealed from the certificates annexed to the petition. Similar certificate has been issued in favour of agents under MPKBY agency system. Certificate of authority to act as agents has been issued in favour of the petitioners by the concerned officer attached to the Finance (Small Savings) Department, as is revealed from the certificates annexed to the petition. Similar certificate has been issued in favour of agents under MPKBY agency system. The petitioners have averred that as agents they are required to collect and deposit money which the depositors intend to invest in various schemes such as (1) Time Deposits (2) Monthly income Scheme (3) Kishan Vikas Patras (4) National Savings Certificate (VIII issue) and (5) Deposit Schemes for Retiring Employees of Government and Public sector Companies. According to them, on collection of deposits they are paid commission. (3.) IN paragraph 5 of the petition the instructions which the petitioners in discharge of functions as agents under the aforesaid agency systems are required to follow, compiled from circulars and forms issued from time to time, have been pleaded. Chapter 2 of the Hand Book referred to supra lists those instructions as the ones which the SAS agents are required to follow together with other instructions which MPKBY agents are required to adhere to which, however, have not been pleaded. An amendment has been introduced by the Government of India, Ministry of Communication and IT, Department of Posts in Rule 33 of the Post Office savings Bank Manual, Volume 1 (hereafter the Manual). A directive has also simultaneously been issued. The petitioners are aggrieved by the amendment/directive and hence have jointly preferred this petition. Rule 33 of the Manual originally read as follows: "33 (1) To withdraw money, a depositor is required to present or send his pass book with an application for withdrawal (form SB. 7) properly filled in and signed. If the depositor does not attend at the post office for payment the counter Assistant should see that the name and signature of the agent or messenger have been entered in the space provided for the purpose in the form of application. Note : 1-The postmaster should not act as an agent or messenger of a depositor for the purpose of withdrawal from a savings bank account standing open in his office. The Postmaster, includes sub-postmaster, branch office postmaster, Dy. Postmaster, A. P. Ms. and A. S. P. Ms in charge of SB Branch. Note : 1-The postmaster should not act as an agent or messenger of a depositor for the purpose of withdrawal from a savings bank account standing open in his office. The Postmaster, includes sub-postmaster, branch office postmaster, Dy. Postmaster, A. P. Ms. and A. S. P. Ms in charge of SB Branch. Note : 2- In the case of an application for withdrawal presented by a messenger of the depositor subsequent to the date appearing thereon, withdrawal should be allowed in the normal course if the interval between the date of application and its presentation is only a day or two, where the interval is longer or where there is reason for suspicion, careful enquiry should be made and the withdrawal allowed only if the result of the enquiries is satisfactory. Note : 3-An illiterate or blind depositor or a depositor, who is unable to write unless he operates his account through an agent under the PO Savings accounts Rules, 1981 should attend the post office in person. If, however, he is absolutely unable to attend personally, he can send his application for withdrawal and the pass book through a messenger. The thumb impression or mark of the depositor on the application for withdrawal should be attested by a respectable witness (who should note down his own permanent address), personally acquainted with him who should certify in the following terms : "the depositor is known to me and his thumb impression / mark has been affixed in my presence. " note : 4-If an account of an illiterate depositor is operated through a literate agent, the agent should furnish the following certificate on the application of withdrawal under his dated signature when withdrawal is made by him on behalf of the depositor. Certified that the depositor is on this day alive and sane". (4.) THE amendment/directive brought about by departmental order dated 1. 6. 07 being S. B. order no. 6/07 is extracted below: sub: Acting of SAS/mpkby/ppf Agents as an agent or messenger of the depositor for the purpose of withdrawal of money in various saving schemes. "this is in continuation of this office letter (SB order no. 29/2006) of even number dated 22. 11. 06. In pursuance of Min. of finance (DEA) letter no. F. 1/2/2007-NS-II dated 29. 5. "this is in continuation of this office letter (SB order no. 29/2006) of even number dated 22. 11. 06. In pursuance of Min. of finance (DEA) letter no. F. 1/2/2007-NS-II dated 29. 5. 2007, the Note 1 below Rule 33 of POSB manual Vol-I is modified from the date of issue of this order and may be read as under : posb manual Vol-I Rule 33 Note-I. i) Postmaster includes Sub Postmaster, Branch postmaster, Dy. Postmaster, APM and SPMs in charge of SB Branch should not act as an agent or messenger of a depositor for the purpose of withdrawal from a saving bank account standing open in his office. ii) Any SAS / MPKBY / PPF agent cannot act as an agent or messenger of a depositor for the purpose of withdrawal from his / her savings bank account. 2. This Rule is applicable for all type of account in all the small savings schemes. 3. It is requested that this may kindly be brought to the notice of all concerned for information, guidance and necessary action. 4. This issues with the approval of DDG (FS). " The grounds on which the impugned amendment/directive has been questioned are that they have been brought about by an incompetent authority; that the actions are illegal and arbitrary; that the stand is unreasonable for, if implemented, it would make the agents/messengers inactive; that the amendments are sought to be worked out only in Asansol being the area of operation of the petitioners resulting in hostile discrimination; and that the impugned amendments seek to curtail the petitioners" legitimate rights as guaranteed by the Post Office Savings Certificates Act, 1959 (hereafter the 1959 act), without amendment thereof and the Rules framed there under by publication of a proper notification. (5.) IT has been frankly conceded by Mr. Kalyan Kumar Bandyopadhyay, learned Senior Counsel for the petitioners that the points he would urge are points of law which do not find place in the writ petition. Government Savings Banks Act, 1873 (hereafter the 1873 Act) and the 1959 Act, he contended, are the two enactments which govern savings in post offices. In terms of power conferred by the aforesaid two Acts, various Rules have been framed. In connection with the Act of 1873, the respondents have issued the Manual in which the impugned amendment has been introduced. In terms of power conferred by the aforesaid two Acts, various Rules have been framed. In connection with the Act of 1873, the respondents have issued the Manual in which the impugned amendment has been introduced. According to him, since the Manual relates to functioning of savings bank accounts and is thus relatable to the 1873 Act, the respondents acted without jurisdiction in introducing such amendment in the Manual although the Manual is in no way connected with the functioning of agents under the 1959 Act, and thereby debar the agents like the petitioners from acting as agents or messengers of the depositors investing in small savings schemes. He referred to a letter dated 8. 5. 2001 issued by the Director General (Posts) wherein it was recommended that the depositors may be allowed to authorize the agents to act as messengers for withdrawing money. He submitted that power had been exercised in a manner which is unauthorized and, therefore, liable to interdiction by this Court. (6.) HE next contended that since the petitioners were enjoying a privilege, that could not have been taken away by the respondents without complying with principles of natural justice and adherence to fairness in action having particular regard to the fact that there was no complaint at the instance of the depositors against any one of the petitioners. He referred to the decision of the Apex Court reported in AIR 1989 SC 1607 : Shri Anadi Mukta Sadguru S. M. V. S. J. M. S. Trust vs V. R. Rudani to contend that even if provisions contained in the Manual are not statutory, public duty enforceable by a Mandamus is not necessarily required to be one imposed by statute but it would be sufficient if the duty is imposed by charter, common law, custom or even contract. Since allowing the agents like the petitioners to withdraw money on behalf of the depositors has been followed as a custom, a writ would lie to compel the respondents to comply with the duty of adhering to natural justice even when a decision is taken not to follow a prevailing custom. Since allowing the agents like the petitioners to withdraw money on behalf of the depositors has been followed as a custom, a writ would lie to compel the respondents to comply with the duty of adhering to natural justice even when a decision is taken not to follow a prevailing custom. He relied on the decision of the Apex Court reported in AIR 1978 SC 151 : Mohinder Singh Gill vs. The Chief Election Commissioner for the proposition that since civil rights of the petitioner would be affected by the impugned amendments, the audi alterem partem rule ought to have been adhered to. In this connection he also referred to the decision of the Apex Court reported in AIR 1984 SC 363 : B. S. Minhas vs Indian Statistical Institute to contend that violation of non-statutory rules may even give rise to unfairness and arbitrariness in State action. By citing the decision of the Apex Court reported in, Allottee of SFS flats, he contended that a policy decision is subject to judicial review though on limited grounds and only because an executive order termed as a policy decision is questioned, the same is not beyond the pale of judicial review. Next, he referred to the decisions of the Apex Court reported in and AIR 2008 SCW 199 : Poonam verma vs Delhi Development Authority for the proposition that when a particular practice is being followed for ages, the persons involved therein have a legitimate expectation that the practice would not be discontinued and if any action is taken by the State contrary to such expectation, such action must not be prejudicial to the interest of those who would be governed by it. (7.) ACCORDINGLY, he prayed for quashing of the impugned amendment/directive. Mr. Mukherjee, learned Advocate representing the respondents, on the other hand, supported the impugned amendment/directive. He contended that the amendment/directive was introduced to prevent fraudulent acts of agents. It had come to the notice of the Central Government that the agents had been misusing power and that as a result of fraud committed by them, the interest of the depositors was being impaired. He contended that the amendment/directive was introduced to prevent fraudulent acts of agents. It had come to the notice of the Central Government that the agents had been misusing power and that as a result of fraud committed by them, the interest of the depositors was being impaired. He further contended that the Manual contains guidelines for effective and smooth functioning of the post offices and this being an internal arrangement of the concerned post offices, any amendment thereof and/or issuance of directive in connection with functioning of the post offices is within the power and authority of the respondents. That apart, the amendment/directive is the result of a policy decision of the Central Government and unless such policy decision is held to be arbitrary or unreasonable or shocking to the conscience of the Court, interference is not warranted. In this connection, he relied on a decision of Honble V. Ramasubramanian, J. of the madras High Court dated 25. 09. 2007 in W. P. (MD). No. 16773 of 2007 (Tamil nadu Small Savings Agents Association vs The Government of India) wherein similar challenge was held to be untenable in law. He accordingly prayed for dismissal of the writ petition. (8.) IN reply, Mr. Swapan Kumar Bannerjee, learned Counsel while reiterating the submissions advanced by Mr. Bandopadhyay, contended that the Madras high Court did not have the occasion to consider the points raised herein and therefore this Court is not bound by such decision. Having heard learned Counsel for the parties, this Court is unable to hold that by reason of the impugned amendment/directive any legal right of the petitioners has been impaired. The Manual has no statutory force. Perusal thereof reveals that it contains provisions relating to matters with which the officials of post offices would be involved day in and day out. The stand of the central Government is that the amendment/directive impugned herein was introduced/issued with a view to securing the interest of the depositors who were being duped by erring agents and thereby deprived of their savings. Prevention of fraudulent transactions was intended to be achieved thereby. The terms of engagement of the petitioners as agents do not cast any duty on them to act as messengers of depositors for withdrawing money. Prevention of fraudulent transactions was intended to be achieved thereby. The terms of engagement of the petitioners as agents do not cast any duty on them to act as messengers of depositors for withdrawing money. On the petitioners" own showing (contents of paragraph 5 of the petition referred to above) it does not appear that in due discharge of functions as agents they are required to act as messengers of depositors for the purpose of withdrawing money. There is no specific averment in the petition that they, in fact, have been acting as messengers to withdraw money. The right of the petitioners to act as messengers for withdrawing money of depositors is not recognized by any statute, departmental circular or procedural guideline having the force of law. They have no vested right. It is immaterial that there is/was no complaint against the individual petitioners. Even if a practice has been followed for quite sometime, as contended by the petitioners, the respondents cannot be compelled by a Writ of mandamus to continue such practice for all times to come although it proves to be counter productive in the long run. It is thus difficult for this Court to hold that the petitioners have been deprived of something which they are legally entitled to claim. The depositors" savings cannot be risked in the wake of complaints against some of the agents. The interest of the depositors is of paramount importance. The agents exist for the depositors and not vice versa. Any measure taken by the Central Government to subserve the interest of the depositors even if detrimental to the interest of the agents like the petitioners, the agents" interest must yield to the interest of the depositors. By issuing mandamus, the Court cannot restrain the respondents from enforcing the impugned amendment/directive since it is conceived in the interest of and for the benefit of the depositors. After all, the depositors have not been restrained from authorizing persons other than the agents to withdraw money from their accounts. The impugned decision is in the realm of a policy adopted by the central Government and it is settled law that the Court would not interdict a policy decision on the ground that in its view the policy decision could have been implemented better, if framed in a particular manner. The impugned decision is in the realm of a policy adopted by the central Government and it is settled law that the Court would not interdict a policy decision on the ground that in its view the policy decision could have been implemented better, if framed in a particular manner. The impugned amendment/directive is not in outright defiance of logic or so utterly unreasonable that it would shock the conscience of the Court. Even on application of the tests propounded in Delhi Development Authority, N. D. (supra) for interdicting a policy decision, the action of the respondents in taking the decision to debar the agents from acting as messengers to withdraw money cannot be faulted. (9.) THE submission of Mr. Bandyopadhyay that the restriction sought to be imposed by the impugned amendment/directive is unauthorized is misconceived. Both the 1873 Act and the 1959 Act encourage savings. The Manual contains procedural provisions applicable not only to Savings Bank accounts but also to all other Post Office Savings Schemes, as it appears from the letter dated 8. 5. 2001 sought to be relied on by him. Whatever procedural guidelines are required to be introduced for achieving the object of the enactments and for proper functioning of the post offices is clearly within the province of the Central government; it matters little as to whether the agents consider such amendments as required or not. The recommendations contained in the letter dated 8. 5. 2001 cannot come to the aid of the petitioners since it was based on the premise that the department had not received any complaint of fraud committed on a depositor by an agent. The factual scenario has changed since then and prevention of fraud being the reason necessitating the impugned amendment/directive, the stand of the respondents is unexceptionable. The submission that the petitioners have a legitimate expectation to act as messengers cannot also be accepted on the ground that legitimate expectation of a citizen cannot be pressed into service if it is likely to harm public interest. The submission that the petitioners have a legitimate expectation to act as messengers cannot also be accepted on the ground that legitimate expectation of a citizen cannot be pressed into service if it is likely to harm public interest. Reference in this connection may be made to the decision of the Apex Court reported in (2004) 6 SCC 765 : Hira Tikkoo vs. Union Territory, Chandigarh wherein it was ruled as follows: "in public law in certain situations, relief to the parties aggrieved by action or promises of public authorities can be granted on the doctrine of "legitimate expectation" but when grant of such relief is likely to harm public interest, the doctrine cannot be allowed to be pressed into service. We may usefully call in aid the legal maxim : "salus populi est suprema lex : regard for the public welfare is the highest law. " This principle is based on the implied agreement of every member of society that his own individual welfare shall in cases of necessity yield to that of community. His property, liberty and life shall under certain circumstances be placed in jeopardy or even sacrificed for the public good". (emphasis supplied) (10.) IN its decision reported in (2006) 8 SCC 381 : Ram Pravesh Singh vs State of Bihar, the Apex Court has held that a legitimate expectation, even when made out, does not always entitle the expectant to a relief. Public interest, change in policy, conduct of the expectant or any other valid or bona fide reason given by the decision maker, may be sufficient to negative the legitimate expectation. In the present case, the governing law does not either expressly or by necessary implication recognise any right of hearing being given to the petitioners before any change is effected in the procedure governing discharge of functions as agents. The petitioners have failed to demonstrate that the respondents by their actions have led them to believe that the practice of acting as messengers for withdrawing money of the depositors would not be taken away without complying with the principles of natural justice. In view thereof, ratio of the decisions in Mohinder Singh Gill (supra), V. R. Rudani (supra) and S. P. Industries co. Ltd. (supra) would have no application on facts and in the circumstances. In view thereof, ratio of the decisions in Mohinder Singh Gill (supra), V. R. Rudani (supra) and S. P. Industries co. Ltd. (supra) would have no application on facts and in the circumstances. The decision in Poonam Verma (supra) also does not assist the petitioners in any way having regard to the law laid down by the Apex Court in Hira Tikkoo (supra) and in Ram Parvesh Singh (supra). (11.) IN B. S. Minhas (supra), an appointment made in deviation of the bye-laws of the Institute was held to be illegal. The Apex Court held that the bye-laws having been framed for conduct of the affairs of the Institute and to avoid arbitrariness, the Institute could not escape the liability for not following the procedure prescribed thereby. This Court has failed to comprehend the relevance of the ratio of the decision to the facts of the present case. The Madras High Court while dealing with a similar challenge ruled that appointment of the agents for the various schemes does not by itself confer power upon them to act as messengers. Facility though allowed was later on found to be misused by the agents resulting in issuance of the directives impugned. The court found no illegality in the impugned directives which were introduced as a matter of necessity, on account of public complaints. Having perused the decision, this Court is in respectful agreement therewith and finds no distinctive features which would compel it to take a different view. For the reasons aforesaid, this Court finds no merit in this petition. Accordingly, it stands dismissed. Parties shall, however, bear their own costs.