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Gujarat High Court · body

2011 DIGILAW 322 (GUJ)

NILESHBHAI P. PATEL v. CHIEF POST MASTER

2011-04-18

K.M.THAKER

body2011
JUDGMENT 1. The petitioner has brought under-challenge respondent's decision of treating his Public Provident Fund Account, opened under Public Provident Fund Scheme (“Scheme” for short) framed under Public Provident Fund Act, 1968 (hereinafter referred to as the “Act”) after certain period, as irregular and on that basis denying interest on the amounts deposited by the petitioner from time-to-time from the point of time respondents decided to treat petitioner's account irregular. 2. The petitioner holds, since 1980, Public Provident Fund Account (“PPF Account” for short) with the respondents. It is the grievance and allegation of the petitioner that the respondent authorities have not properly and correctly calculated and not paid interest over the amount deposited, from time to time, by the petitioner in the said PPF Account. 3. The facts stated by the petitioner in support of the relief prayed for by him are that when the petitioner was in employment with Ahmedabad Municipal Corporation, he had opened a PPF Account in 1980 (w.e.f. 15.03.1980) at the General Post Office, Ahmedabad and he was allotted Account No.25. As per the said Scheme of 1968, the account was to be operated, initially, for 15 years from the date when the account commenced. 3.1 As per the provision under the Scheme, the period can be extended, in block of 5 years. Accordingly, when the account opened by the petitioner (in 1980) matured on 31st March, 1995, the petitioner did not discontinue/close the account but continued its operation for block of five years from 1995 to 2000 and then in 2000 he opted for another renewal – extension from 2000 to 2005 and then for third time in 2005 i.e. from 2005 to 2010. Then, in 2010, upon maturity of the account, the petitioner opted for closing the account and for withdrawal of the accumulated amount i.e. the deposited amount and the interest thereon. 3.2 The petitioner has claimed that when the account was to finally mature upon conclusion of third block i.e. somewhere in March-2010, the authority informed that his account was under audit scrutiny. Subsequently, the petitioner received a communication dated 30.04.2010 whereupon, the petitioner came to know that the respondent authorities had denied payment of interest for the entire period of extension i.e. for the entire period of 15 years after the initial maturity of the account in March1995. Subsequently, the petitioner received a communication dated 30.04.2010 whereupon, the petitioner came to know that the respondent authorities had denied payment of interest for the entire period of extension i.e. for the entire period of 15 years after the initial maturity of the account in March1995. 3.3 The petitioner has alleged that during the period from April-1995 onwards, he was never informed about any irregularity and/or about any decision that his account would not be entitled for payment of interest. The petitioner has also alleged that:- “12. It is submitted that the last two entries posted in the PPF pass-book, showing dt.01/04/2009, crediting of the amount of interest of Rs.77,721/- and dt.01/04/2010, Rs.89,539/- and the total balance in the PPF a/c. was Rs.12,08,776/-, was posted on 23/09/2010 and the same can be verified from the RUBBBER STAMP AFFIXED OF 23/09/2009. It is submitted that the said balance shown in the pass-book was calculated by the respondents taking into account the deposits/subscription made and the interest accrued on the balance at the end of each month/year, at the rate of interest prevailing at the different point of time.” “15. It is submitted that the petitioner was orally informed to come on 29/10/2010 for collecting the cheque and therefore, the petitioner had gone on 29/10/2010 and to the utmost shock and surprise, the petitioner was handed over the cheque no.694541, drawn on the State Bank of India, Main Branch, Ahmedabad, amounting Rs.8,93,454/- (In words Rupees Eight Lac ninety-three thousand four hundred fifty-four only) though the total balance standing credited in his PPF a/c. was Rs.12,08,776/-. The petitioner was also handed over one statement showing the calculation of the refund amount, wherein the calculation is made on the basis of the credit balance in the PPF a/c; as on 31/03/1995. That the calculation of the interest is made on the balance which was in the PPF a/c; on 31/03/1995 and no interest had been calculated for the payment for the subsequent deposits made by the petitioner, in the subsequent years. The said amount of the deposits made by the petitioner i.e. Rs.5,00,500/-, had been returned without payment of any interest on the same. It is relevant to consider that the NOTE is made in the middle of the statement which states that “Here First extension is made on 07/03/1997, which is not valid. Balance tally upto 31/03/1995, so we continue with that amount”. It is relevant to consider that the NOTE is made in the middle of the statement which states that “Here First extension is made on 07/03/1997, which is not valid. Balance tally upto 31/03/1995, so we continue with that amount”. Herein annexed and marked as Annexure-H, is the photocopy of the statement showing calculation and Annexure-I, is the photocopy of the abovementioned cheque. It is submitted that because of the illegal and arbitrary act of the respondents, the petitioner had suffered a loss of Rs.3,15,322/- and the interest accrued on the same, till the date of making the final payment.” 3.4 It appears that though the petitioner made grievance before the respondent authorities regarding non-payment of interest. The request and representation did not yield any result. Therefore, the petitioner preferred present petition. 3.5 The petitioner has, in the background of aforesaid facts and circumstances, prayed, inter-alia, that:- “24(B) This Hon'ble Court, may be pleased, to issue any appropriate writ, order/s or direction/s, direct the respondents to immediately calculate the interest accrued on the funds accumulated in the Public Provident Fund A/c. No.25, of the petitioner, for the period from 1995 to 2010 and immediately pay the said interest, to the petitioner. 4. The relief prayed for by the petitioner is resisted by the respondents. Affidavit-in-reply dated 26.03.2011 has been filed contending, inter-alia, that from 1995 onwards the account was treated as irregular and consequently ineligible for interest from 1995 onwards due to petitioner's default in making deposit regularly in accordance with the provision of the scheme. 4.1 It is submitted that during the course of verification of entries, it was found that in the financial year 1999-2000 and thereafter, in the financial year 2001-2002 any deposit was not made by the petitioner and that therefore, the account was treated irregular and ineligible for interest. It is stated in the reply affidavit that:- “3.3 During the course of verification of entries made in passbook with the office record, it was found that no subscription has been made in the account during the Financial Years 1999-2000 and 2001-2002 by the petitioner. In this regard, he was requested to produce counterfoil of the original challan of the subscriptions made by him for the Financial Year 1999-2000 vide letters dated 7.7.2010 and 30.8.2010. In this regard, he was requested to produce counterfoil of the original challan of the subscriptions made by him for the Financial Year 1999-2000 vide letters dated 7.7.2010 and 30.8.2010. But the petitioner did not comply with the said request and sent his letter of grievance dated 20.7.2010.” 4.2 It is also claimed that so as to ascertain as to whether the petitioner had actually made the deposits during the said two financial years 1999-2000 and 2001-2002, he was asked to produce the counterfoil/original chalan, however, the petitioner failed to do so. It is further claimed that before making the decision, the petitioner was informed by letter dated 30.04.2010 to personally remain present before the authority, however, the petitioner did not attend the hearing. 4.3 The respondents have also asserted that though the petitioner's PPF Account matured on 31st March, 1995, the request/application for first extension was made on 7th March, 1997 which was much beyond the prescribed period for making request for extension. It is claimed that as per the provision contained under Rule 9(3)(A) of the Scheme of 1968, the request/application for first extension must be made within period of one year from the date of maturity of the account. On the strength of the department's letter dated 11.08.1992 bearing No.F.7/8/88-NS.II and in light of the said letter, it is contended that if a subscriber/account holder fails to give his option to continue the account, but continues to make deposit, then those deposits are to be treated as irregular which will not carry interest. Relying on the said communication dated 11.08.1992, the decision of not crediting or allowing any interest on any of the deposits for the period from 1st April, 1995 onwards, is sought to be justified. It is also claimed that on and from 01.04.1995, the petitioner was irregular in making the yearly deposits. 5. Mr.Patel, learned advocate, has appeared for the petitioner and Mr.Buch, learned Standing Counsel, Central Government has appeared for the respondent authorities. 5.1 Mr.Patel, learned advocate for the petitioner submitted that without any intimation, petitioner's account was treated as irregular/ineligible for payment of interest. He also submitted that during the entire period of 3 extensions/renewals from 01.04.1995 until 2010, the respondent authorities continued to accept the deposits in the account and neither the acceptance of deposits was declined nor the petitioner was informed that the deposits will not carry any interest. He also submitted that during the entire period of 3 extensions/renewals from 01.04.1995 until 2010, the respondent authorities continued to accept the deposits in the account and neither the acceptance of deposits was declined nor the petitioner was informed that the deposits will not carry any interest. The petitioner was not aware or about the decision of the respondent authorities and without any intimation any interest was not credited in his PPF Account. He also submitted that the decision and action of not crediting and not paying interest and/or treating the account irregular is unjust and arbitrary as well as without authority of law. Mr.Patel, learned advocate for the petitioner, submitted that the respondents are not justified in denying the payment of interest to the petitioner on the amounts deposited by him in his PPF Account from time to time during the period of three extensions/blocks i.e. for 15 years after 01.04.1996 initial/first maturity of the account in March-1995. 5.2 Mr.Buch, learned Standing Counsel, has reiterated the factual details mentioned in reply-affidavit dated 28.03.2011 and submitted that the action of the respondent authorities has been taken in accordance with the Rules framed under the Scheme of 1968. He also submitted the said situation is governed by the Rules (framed under the Scheme) which are binding to the authorities as well as the subscriber/account holder in view of which irregular account are automatically rendered ineligible for interest. Mr.Buch, learned Standing Counsel referred to the statement at Annexure-H, Page Nos.44 and 45 reflecting the manner in which the petitioner maintained his account and submitted that from 01.04.1995, the account has been maintained irregularly and that therefore, the petitioner would not be entitled for payment of interest over the amounts deposited from April-1995. He also reiterated the factual aspects and details stated in the affidavit and urged to dismiss the petition. 6. I have considered the submissions made by the counsel for the contesting parties and also perused the record. 7. He also reiterated the factual aspects and details stated in the affidavit and urged to dismiss the petition. 6. I have considered the submissions made by the counsel for the contesting parties and also perused the record. 7. What emerges from the record and the submission by the learned counsel is that the petitioner has been denied interest in respect of all the deposits made over period of 15 years by him after 31.03.1995 during the three blocks (each of five years' span) on the ground that at the time of the first extension i.e. in 1995, when the account matured for the first time (after having been commenced in 1980), the application in prescribed Form-H (in renewal/extension) was not made within one year from the date when the account matured and that during the extension period in two financial years i.e. in 19992000 and in 2001-2002, the petitioner had defaulted in depositing amount. 7.1 The respondents have stated in the affidavit that it was during Audit inspection of Ahmedabad GPO that objection was raised with regard to the PPF Account No.25 (i.e. the account held by the petitioner) and it was pointed out by the auditor that the petitioner had failed to credit the minimum deposit/subscription in the financial year 1999-2000 and 2001-2002. 7.2 It emerges from the record that the PPF Account which the petitioner held, got matured, upon completion of 15 years, on 31.03.1995 and that though the account matured on 31.03.1995 neither any application was made seeking extension/renewal for further period nor the account was closed by the petitioner on its maturity in March1995. Then, the petitioner made application dated 07.03.1997 seeking extension/renewal of the account, upon its maturity. 7.3 However, what is relevant to note is that though the application was made on 7th March, 1997, the petitioner had, even during the said period of 2 years deposited requisite amount and such deposits were even accepted by the authority. Then, the petitioner made application dated 07.03.1997 seeking extension/renewal of the account, upon its maturity. 7.3 However, what is relevant to note is that though the application was made on 7th March, 1997, the petitioner had, even during the said period of 2 years deposited requisite amount and such deposits were even accepted by the authority. 7.4 Though it is claimed by the respondents that vide communication dated 26.10.2010, the petitioner was conveyed that the extensions from 1995 were irregular and therefore, cannot be taken cognizance of, it is, however, not denied and convenient silence is maintained, by the respondents about the petitioner's assertion, that for long period from 01.04.1995 to February-March-2010, the petitioner was never informed that the account was treated as irregular and the deposits after 01.04.1995 will not carry any interest. The respondents have stated in the reply-affidavit that the petitioner had not made deposit during financial years 1999-2000 and 2001-2002 and that therefore, the account was treated as discontinued in view of the Clarification No.2. 7.5 The respondents have relied upon the provision under the Scheme, particularly Sub-Clause-3A of Clause-9 and the clarifications said to have been issued by the Ministry of Finance vide letter dated No.F.3(8)-PD/72 dated 16.08.1972, notification bearing No.F.3 (6)-PD/86 dated 20.08.1986 and letter issued by the Ministry of Finance bearing No.F.7/8/88-NS.II dated 11.08.1992. The said clarifications read thus:- “(1) ..... (2) ..... (3) A subscriber who has not maintained his subscriptions in accordance with paragraph 3 of the scheme and has defaulted in subscriptions in any year, either by non-payment of subscriptions or payment of amount less than the minimum of Rs.500 is ineligible for facility of taking loan from the account unless the account is revived. [MOF (DEA) letter No.F.3(8)-PD/72 dated 16.8.1972] (4) As per proviso to Rule 9(3) the subscriber can retain his account after maturity without making any further deposits for any period without limit. For this purpose, it is not necessary to give option in writing. It is automatic. Form H has since been amended. The balance in the account will continue to earn interest at the normal rate applicable to PPF accounts. The subscriber can make one withdrawal in each financial year of any amount within the balance. For this purpose, it is not necessary to give option in writing. It is automatic. Form H has since been amended. The balance in the account will continue to earn interest at the normal rate applicable to PPF accounts. The subscriber can make one withdrawal in each financial year of any amount within the balance. Once, the account is continued without deposits, for more than a year, the subscriber cannot opt again to continue the account with deposits for a block year of 5 years. [MOF (DEA) Notification No.F.3(6)-PD/86 dated 20.08.1986] (5) According to Rule 9(3A) and (3B) the subscriber can continue to make deposits after the maturity of an account for one or more further blocks of 5 years without any loss of benefit. For this purpose he will give his option in writing to the Accounts Office in Form H within one year from the date of maturity of the account. If the subscriber fails to give his option to continue the account within one year but continues to make deposits in the account, these deposits will be treated as irregular deposits will not carry interest. Further these deposits will not be eligible for deduction under Section 80C of Income Tax Act. In such cases the balance on the date of maturity will earn interest upto the month preceding the month of closure. The deposits made after the date of maturity will be refunded without any interest. The account will be treated as if continued without deposit under rule 9(3).” [MOF (DEA)Letter No.F.7/8/88-NS.11 dt.11.08.1992] 8. Before picking-up the above instructions-clarification, it should be noted that the instructions – clarifications @ Sr.No.3 and Sr.No.5 appear to have been issued by way of letters dated 16.08.1972 and 11.08.1992 respectively and not by way of “order” as contemplated under Section 11 of the Act. 8.1 The Clarification No.3 issued in 1972 deals with facility to avail loan. According to the said clarification issued by the Ministry of Finance vide letter dated 16.08.1972, a subscriber who has not maintained his subscription in accordance with Para-3 of the Scheme and has defaulted in subscription in any year, shall be ineligible for facility of availing loan unless the account is revived. According to the said clarification issued by the Ministry of Finance vide letter dated 16.08.1972, a subscriber who has not maintained his subscription in accordance with Para-3 of the Scheme and has defaulted in subscription in any year, shall be ineligible for facility of availing loan unless the account is revived. 8.2 According to the Clarification No.4 made in August-1986, the subscriber can, in view of proviso to Rule-9(3), retain the account after its maturity without making any further deposits for any period without limit and for such purpose, it is not necessary to give option in writing. In the said clarification, it is also clarified that “the balance in the account will continue to earn interest at the normal rate applicable to PPF Accounts.” 8.3 Then, Clarification No.5 issued vide letter dated 11.08.1992 (i.e. almost 6 years after the 4th classification) provides that in view of the provision under Rule-9(3A) and (3B), the subscriber can, continue to, make deposits after the maturity of account for one or more blocks of 5 years without any loss of benefit, however, for such purpose, subscriber will have to give option in writing to the Accounts Office in Form-H within one year from the date of the maturity of the account. 8.4 It is further clarified under Clarification No.5 of 1992 that if the subscriber fails to give his option to continue the account within one year but continues to make deposits in the account, then such deposits will be treated as irregular deposits and will not carry interest and will not be eligible for deduction under Section 80C of the Income Tax Act. The said Clarification also provides that in the cases where application for extension/renewal of the account is not made within one year from the date of maturity of the account the balance on the date of maturity will earn interest upto the month preceding the month of closure and deposits made after the date of maturity will be refunded without any interest. 8.5 The respondent authorities have heavily relied upon the letter dated 11.08.1992 issued by the Ministry of Finance instructing that in the cases where the application (for renewal/extension of the period of PPF Account) is not made in the prescribed form i.e. Form-H within one year from the maturity of the account and the subscriber fails to give his option to continue the account but continues to make deposit in the account, then the deposits made after the period of maturity will be deposited which may be treated as irregular deposits and will not carry interest and will not be eligible for deduction under Section 80C of the Income Tax Act and the deposits made after the date of maturity will be refunded without any interest. It appears that such instruction came to be issued under the said letter dated 11.08.1992, however, any provision to such effect is not to be found in any of the clauses under the Scheme. It is merely a letter through which the said restriction or obligation is introduced and imposed, however, the respondents have failed to point out any provision from the scheme conferring such powers on the department. 9. The respondent authorities have heavily relied on the said Clarification No.5 issued vide letter dated 11.08.1992 and Sub-Clause-3A of Clause-9 of the Scheme. 9.1 The stand taken by the respondent authorities is required to be examined in light of the well recognized position that the instructions-clarification cannot be contrary to and/or cannot go beyond the scope of the provision under the Statute or the Rules. 9.2 It is not in dispute that the petitioner got PPF Account (Account No.25) opened with effect from 15.03.1980. Consequently, the said account would, as per the terms of the scheme, initially get matured upon completion of 15 years i.e. on 31.03.1995 i.e. upon completion of 15 years. 9.3 It is not in dispute that after the said account matured, the petitioner got it extended/renewed for further period of five years, which is permissible under the Scheme/Rules. (a) True it is that the petitioner failed to fill-up and submit the prescribed form (for extension/review) within one year from the date of maturity inasmuch as the prescribed form giving option for first extension was filled-up and submitted on or around 07.03.1997. (a) True it is that the petitioner failed to fill-up and submit the prescribed form (for extension/review) within one year from the date of maturity inasmuch as the prescribed form giving option for first extension was filled-up and submitted on or around 07.03.1997. (b) However, equally true is the fact that from 31.03.1995 onwards, the petitioner retained the account and that between 01.04.1995 and 07.03.1997 amounts were regularly deposited by the petitioner and during that period there was no delay or default in paying the yearly amount/subscription. It is not even the case of the respondents. (c) It is also true that the respondents had, during the period in question, accepted the deposits made by the petitioner. 9.4 The first extension (for five years) came to an end on 31.03.2000. It is also not in dispute that after 31.03.2000 also, the petitioner retained the PPF Account and also got the same renewed/extended. Thus, the second extension/renewal was effected for the period from 2000 to 2005. 9.5 After completion of the first extension/renewal, the petitioner, continued to deposit the amount, in the second block of renewal of extension also and the authorities continued to receive, accept the amounts – deposits and credit the same in the petitioner's PPF Account. 9.6 The respondent authorities have alleged that the petitioner had defaulted in depositing amount/contribution during two financial years in the second extension (5 years block) i.e. during 1999-2000 and 2001-2002. Similar allegation in respect of any other financial year falling within the extension/renewal period after initial maturity in March-1995, is not made. 9.7 Upon completion of second block of 5 years in 2005, the said account was further renewed in third block i.e. from 2005 to 2010. So far as the said third extension/block is concerned, the respondents have not cited any instance about any irregularity in the said third block/extension. 10. It is the case of the petitioner that until the end of third extension also, the petitioner had continued to deposit the amount and the said deposits/amounts were received/accepted by the authorities. So far as the said third extension/block is concerned, the respondents have not cited any instance about any irregularity in the said third block/extension. 10. It is the case of the petitioner that until the end of third extension also, the petitioner had continued to deposit the amount and the said deposits/amounts were received/accepted by the authorities. It is, however, the grievance of the petitioner that though during the three extensions he continued to deposit the amount and despite the fact that such deposits were even accepted by the respondent authorities and that too without any notice or intimation or clarification that the deposits will not carry any interest, the interest amounts for three blocks (during which the account was extended/renewed) have not been credited to his account or have been denied and have not been paid to him. At this stage reference may be made of the observations in the decision rendered in Letters Patent Appeal Nos.813 of 1999 and 847 of 1999 confirming the order passed in the writ petitions being Special Civil Application Nos.10867 of 1998 and 10868 of 1998, wherein the Court has observed thus:- “We find that the factum that the accounts were opened through the Power of Attorney holder had not been suppressed or concealed and the Department knew it very well at the time when the Account was opened that it was being opened through the Power of Attorney holder. After the Account has remained operative for number of years and the deposits have been accepted therein, when it comes to the question of closure of the Account, to deny the payment of the interest on the ground that the opening of the Account itself was irregular and that it was contrary to the clarifications given by the Finance Department, cannot be said to be justified. The learned Single Judge has given reasons in detail in para 7, 8 and 9 of the impugned order for allowing the petition. The learned Single Judge has given reasons in detail in para 7, 8 and 9 of the impugned order for allowing the petition. The learned Single Judge has also mentioned in the body of the order that the matter was covered by two earlier decisions of this Court, i.e. in Special Civil Application No.6794 of 1987 decided on 2nd March 1988 and in Special Civil Application No.3088 of 1988 decided on 24th in the opening of the Account, it cannot entail the forfeiture of the interest accrued Account or on the part of the person through whom the Account was opened, unless it is made out that any important or material fact was suppressed or concealed which is not the case against the original petitioners.” (emphasis supplied) 11. Under the scheme, the provision regarding interest is to be found under Clause-8 of the Scheme. The Clause-8 reads thus:- “8. Interest:- Interest at the rate, notified by the Central Government in the official gazette from time to time, shall be allowed for calender month on the lowest balance at credit of an account Provided that where the interest to be credited contains a part of a rupee, then, if such part is fifty paise or more, it shall be increased to one complete rupee, and if such part is less than fifty paise, it shall be ignored.” 11.1 So far as the continuation-extension of the account is concerned, the relevant provision is to be found under Sub-Clause-3-A, Sub-Clause 3-B of Clause-9 as well as Para-3 (referred to in Para-3A) of the Scheme. The said provisions read thus:- “(3A) Continuation of account with deposits after maturity:- Subject to the provisions of subparagraph (3) a subscriber may, on the expiry of 15 years from the end of the year in which the initial subscription was made but before the expiry of one year thereafter, may exercise an option with the Accounts Office in Form H, or as near thereto as possible, that he would continue to subscribe for a banker block period of 5 years according to the interest of subscription specified in paragraph 3.” Clause-3A of the Scheme inter-alia, provides that the subscriber may exercise option to extend/renew the period of account for block of period of 5 years and for that purpose, he may make an application which should be made before expiry of one year upon completion of 15 years, for which the period the account is originally opened. 11.2 The said Para-3 (referred to in said Clause3(A) of the Scheme) reads thus:- “(3) Closure of account or continuation of account without deposits after maturity:-Notwithstanding the provisions of sub-paragraph (1), any time after the expiry of 15 years from the end of the year in which the initial subscription was made by him, a subscriber may, if he so desires, apply in Form C or as near thereto as possible together with his pass book to the Accounts Office fro the withdrawal of the entire balance standing to his credit and the Accounts Office, on receipt of such an application from the subscriber, shall subject to the provisions of sub-paragraph (4) allow the withdrawal of the entire balance (together with interest upto the last day of the month preceding the month in which the application for withdrawal is made) after making adjustments, if any, in respect of any interest due from the subscriber on loans taken by him and close his account. Provided that a subscriber may, if he so desires, make withdrawal of the amount standing to his credit, from time to time, in installments not exceeding one in a year.” “(3B) In the event of a subscriber opting to subscribe for the aforesaid block period he shall be eligible to make partial withdrawals not exceeding one every year by applying to the Accounts Office in Form C, or as near thereto as possible, subject to the condition that the total of the withdrawals, during the 5 year block period, shall not exceed 60 per cent of the balance at his credit at the commencement of the said period.” The above provisions also do not provide for or authorize denial of interest. Even above noted para/Sub-Clause-3 also provide that withdrawal of entire amount with interest has to be allowed. 11.3 As mentioned earlier, the Act or Scheme do not provide for such restriction and/or such condition and plain reading of the provisions under the Act and/or the Scheme do not admit such interpretation or construction. 11.4 In this context, it is relevant and appropriate to note that Section 5 of the Act which makes provision for interest reads thus:- “5. Interest:- All subscriptions made under section 4 shall bear interest at such rate as may be notified by the Central Government in the Official Gazette, from time to time, and the interest shall be calculated in such manner as may be specified in the Scheme.” (emphasis supplied) 11.5 On perusal of the provisions, it comes out that the Act provides that interest shall be paid at such rate as may be notified by Central Government and upon the rate being notified interest would be calculated in the manner specified in the Scheme, meaning thereby, according to the Act, interest has to be paid after calculating in such manner as the scheme may provide and at such rate which the Government may notify. Now, so far as the provision for calculation and payment of interest is concerned, the same is to be found in earlier noted Clause-8 which is extracted hereinabove earlier. The said Clause8 also does not provide for and impose or even contemplate such restriction or condition i.e. does not provide for any condition denying payment of interest in any eventuality or condition and/or any condition allowing non-payment or forfeiture of interest. The said Clause8 also does not provide for and impose or even contemplate such restriction or condition i.e. does not provide for any condition denying payment of interest in any eventuality or condition and/or any condition allowing non-payment or forfeiture of interest. The said Clause-8 merely provides that the interest at the notified rate shall be allowed for calendar months on the lowest balance. 11.6 Thus, neither by the provision under Section 5 of the Act nor under Clause-8 of the Scheme (which provisions relate to the aspect of interest), such restriction or condition is provided for or contemplated. 11.7 At this stage, reference also needs to be made to the provision under Section 11 of the Act which is the only provision under the Act, of which recourse can be taken by the respondent authorities in event of need for taking steps to remove any difficulty in giving effect to the provisions of the Act or the Scheme. The said Section 11 reads thus:- “11. Power to remove difficulties:-(1) If any difficulty arises in giving effect to the provisions of this Act or the Scheme, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act, as appear to it to be necessary or expedient for the removal of the difficulty. (emphasis supplied) Provided that no such order shall be made after the expiration of three years from the commencement of this Act. (2) Every order made under sub-section (1) shall be laid as soon as may be after it is made before each House of Parliament.” According to the said provisions, the Central Government may pass any order making provisions so as to remove difficulty in giving effect to the provisions of the Act. However, such action can be taken only by way of an order and not by way of any letter/communication. Furthermore, the order must be published in the gazette and, as soon as possible, must be laid before each house of parliament. Besides this, the said section also mandates that the order which may be made must not be inconsistent with the provisions of the Act. One of the important conditions under the said provision viz. Section 11 is that any order, for the purpose of removal of difficulty cannot be passed under the said provision after 3 years from commencement of the Act. One of the important conditions under the said provision viz. Section 11 is that any order, for the purpose of removal of difficulty cannot be passed under the said provision after 3 years from commencement of the Act. So far as present case is concerned, none of the said requirements under Section 11 are fulfilled. Even the condition regarding time frame viz. 3 years from commencement of the Act is not and cannot be said to have been observed so far as the instruction – clarification dated 11.08.1992- on which heavy reliance is placed by respondents – inasmuch as it is issued much after the time limit of 3 years. 11.8 Over and above the said defect, the prominent defect is that the said communication dated 11.08.1992 does not take note of the provisions under Section 5 of the Act and Clause-8 of the Scheme. The said instructions which are sought to be made, in garb of clarification, part of sub-clause-3A and 3B actually go beyond, the plain meaning and scope of not only said Clause-3A and 3B but also go beyond the meaning and scope of Clause-8 of the Scheme and Section 5 of the Act and they supplement and inject condition/s which is/are not to be found in the scheme or the Act. 11.9 On the other hand, Clause No.8 amongst the “instructions” printed on the passbook reads thus:- “Clause-8:- The account can be closed on maturity i.e. after the expiry of 15 years from the close of the financial year in which the initial subscription is made. This is, of course, optional and the 11.10 So far as the scheme and the provisions thereunder are concerned, as noticed hereinabove earlier, all that is provided and contemplated thereunder is that on expiry of 15 years from the end of the year in which the initial subscription was made but before expiry of one year thereafter, the account holder can exercise option with the Accounts Office and intimate, by submitting Form-H, that he would continue to subscribe to the PPF Account for another block of five years. 11.11 Besides the fact that none of the said provisions contain such restriction as is applied in the case of, and imposed on, the petitioner, even on conjoint reading of the said provision i.e. Clause-3-A, 3-B and 8, it does not emerge that the said provisions postulate that account holder can be denied payment of interest for the entire block or entire period of extension, on the ground that deposits were made irregularly/the account was irregular or that the submission of the requisite form/application (by virtue of which extension can be requested for) was delayed notwithstanding the fact that the amount was deposited by the account holder and even though the amounts-deposits had been accepted by the department and credited in the account. 12. Delay or irregularity in deposit is not provided for or even contemplated as the cause or reason and basis for denying and/or forfeiting payment of whole of the interest for the entire period of extension or any block or blocks. 12.1 The said Clause No.3-A under the Scheme does not provide that if delay is caused in submitting the Form-H then though the deposit of amount in the account is accepted, any interest will not be paid on such amounts and that the account holder will not be entitled to earn and claim interest on the amounts which may be accepted by the authority, upon deposits being made by the account holder, if any delay had occurred in submitting Form-H. The Scheme does not contain such provision. It is by way of the so-called administrative instruction issued by way of letter dated 11.08.1992. 12.2 Even otherwise, when the authority, despite delay in submission of the application (for renewal/extension of account for further 5 years) in prescribed form or irregularity in depositing the amount during particular year, continued to accept the amounts/deposit from time to time during such period of extension, then the decision and action of denying interest for entire period or for any block cannot be treated as justified and legally sustainable action. 12.3 Denial of payment of interest over the amount accepted in the account and retained until closing of the account is not justified and cannot be sustained and has to be treated as unreasonable and as an action without authority of law and infected by arbitrariness, more so when they are enforced without any intimation, to the account holder at the relevant time, that the account will be treated as irregular and that the account will not carry interest. 12.4 It is also pertinent that even after the clarification which was allegedly made in 1992, until now any provision under the scheme does not appear to have been made to formally give effect to the said instruction vide letter dated 11.08.1992. The respondents could not cite any enabling provision under the scheme. Therefore also, merely on the strength of the instruction purporting to be clarification, the persons whose account is not declared closed on any count, particularly on the count that the application in the prescribed form was not submitted within prescribed time, the payment of interest on the amount deposited by the account holder and accepted in the account and retained by the authority, cannot be denied. After the deposits have been accepted for number of years during which any intimation to the account holder about any irregularity or noncompliance or shortfall is not given, then to deny payment of interest when time to close the account comes on the ground that it was contrary to clarification given by the department, is not a just action. The account holder cannot be told after number of years, and that too after allowing him to deposit amounts and after receiving the amounts in the account, when he closes the account that he would not be paid interest. Furthermore, the account holder should not be made to suffer financial loss on account of infractions of trivial or insignificant or technical nature. Irregularity such as present one should not invite and entail or should not be visited with or burdened with forfeiture or denial of interest more so when there is absence of specific condition or clear provision in the statutory scheme and action is sought to be taken on the strength of instruction sought to be introduced/imposed by letter of the department. Such action is unjustified, arbitrary and without authority of law. 13. Such action is unjustified, arbitrary and without authority of law. 13. In view of the foregoing discussion and for the reasons noted above, the petition deserves to be accepted and allowed and the action of the respondents of denying the payment of interest over the amounts deposited by the petitioner from time to time after on 31.03.1995 deserves to be set aside and the directions to the respondents to calculate the amount of interest at the rates applicable during the period in question and allowed to other account holders during the period in question and to make the payment to the petitioner accordingly, are required to be passed. 14. Hence the following order is passed:- (A) The petition is accepted and allowed. (B) The decision and action of the respondent authorities to not to pay interest on the amounts deposited by the petitioner from time to time in all for total period of 15 years (i.e. three blocks-each of 5 years of extension) after 01.04.1995 31.03.1995 is set aside. (C) The Competent Authority is directed to calculate and pay interest on the basis of the rates of interest applicable from time to time during the period from 1st April, 1995 to 31st March, 2010 (i.e. the same rate at which the other account holders have been paid interest during the said period). (D) After calculating the amount payable towards interest, the total payable amount i.e. the principal amount and the total payable interest, may be paid to the petitioner along with the statement showing the details of the calculation and the bifurcation of the principal amount and interest amount. (E) The process of calculating interest and making payment shall be completed as early as possible but not later than period of 10 weeks from the date of receipt/service of present order. With the aforesaid clarifications, observations and directions, the petition is disposed of. Rule is made absolute to the aforesaid extent. However, in the facts of the case, there shall be no order as to cost.