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2010 DIGILAW 455 (JK)

Union Of India v. Vishnu Dutt Sharma

2010-08-19

MOHAMMAD YAQOOB MIR, Virender Singh

body2010
Virender Singh, J. 1. 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/- 2. 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/-. 3. 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. 4. 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. 4. The learned Single Judge did not agree with the stand taken by the respondents and ultimately found it to be a case of 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. 5. Record reveals that the instant appeal is not formally admitted as yet. We, thus, admit it and dispose of. 6. 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. 7. 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 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. 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. 8. 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. 9. 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. 10. 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. 10. 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. 11. 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 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. 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 interest is to be calculated with regard to Rs.25,350/-, the amount of interest withheld by the appellants vis-a-vis all the four accounts. Ordered accordingly. 12. 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. 13. 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. 13. 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. 14. 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. 15. 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-a-vis interest part only. 16. Connected CMP(s) also stands disposed of.