1. THIS is a complainant''s appeal against order dated 22.8.1997 passed in Case No. 18/93 by the District Consumer Disputes Redressal Forum, Camp Court, Mandla (for short the ''District Forum'').
2. FACTS giving rise to this appeal are thus : Appellant Municipal Council constituted under Section 5, Madhya Pradesh Municipalities Act, 1961 purchased 20 National Savings Certificates of Rs. 5,000/- each of the maturity date of 20.12.1991 and of maturity amount of Rs. 2,00,000/-. On 5.12.1991 certificates were presented for payment of the maturity amount. The Postal Authorities did not make the payment of the maturity amount for the reason that the certificates under National Savings Certificates (VI-Issue) Rules, 1981 (for short the ''Rules'') could not have been issued to Corporations, Companies, Institutions or Firms. Rule 4 of the NSCs (VI/VII-Issue) Rules, 1981 applies to NSCs VI/VII which provides that NSCs VI/VII Issues can only be issued to an adult for himself or on behalf of minor or jointly to two adults. Therefore, the Postal Authorities informed that on the maturity amount the simple interest and not cumulative interest would be payable at the rate of Savings Bank Account rate or payment of simple interest. Appellant did not agree to that and filed a complaint, which was resisted. The District Forum after appreciation of evidence and documents dismissed the complaint holding that, it was mistake of law, therefore, the Postal Authorities were not deficient in service.
Learned Counsel for the appellant submitted that the approach of the District Forum with an erroneous approach held that the contract in view of Sections 20 and 21 of the Contract Act was void. Appellant is an Authority under Article 12 of the Constitution of India, which would not have purchased the certificates, which carry simple interest. In the case principle of promissory estoppel applies and the Postal Authorities were bound to pay the amount of interest as agreed. Counsel cited decisions of Supreme Court in case of Century Spinning and Manufacturing Company Ltd. & Anr. v. The Ulhasnagar Municipal Council & Anr., AIR 1971 SC 1021; The Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd., AIR 1983 SC 848; M/s. D. Navinchandra and Co., Bombay & Anr. v. Union of India & Ors., AIR 1987 SC 1794, and I.T.C. Ltd. v. George Joseph Fernandes & Anr., AIR 1989 SC 839.
Mr. K.K. Jain learned Counsel for respondent while supporting the order of the District Forum referred the correspondence made by the Postal Authorities and the application for issue of NSCs wherein it was declared that the appellant agreed to abide the Rules. In view of Rule 4 certificates could not be issued to the appellant, which can only be issued to adults individuals only and not to the Municipal Council. It was also submitted that the principle of promissory estoppel would not apply and the principle of no estoppel against Statute would apply. Counsel cited a decision of Supreme Court in S.L.P. (C) No. 38 of 1995 in case of Postmaster Dargamitta H.P.O., Nellore v. Ms. Raja Prameelamma, decided on 1st May, 1995.
3. FOR issue of certificates statutory Rules have been framed. Rule 4 deals with type of certificates and issue thereof, which we quote :
"4. Types of Certificates and Issue thereof-(1) The certificate shall be of the following types, namely : (a) Single Holder Type Certificates; (b) Joint ''A'' Type Certificates; and (c) Joint ''B'' Type Certificates. (2)(a) Single Holder Type Certificates may be issued to an adult for himself or on behalf of a minor or to a minor. (b) Joint ''A'' Type Certificates may be issued to two adults payable to both holders jointly or the survivor. (c) Joint ''B'' Type Certificates may be issued jointly to two adults payable to either of the holders or the survivor.
A bare look to Rule 4 clearly shows that the certificates of this issue can be purchased only in the name of individuals and not in the name of Corporations, Companies, Institutions, Firms, etc. Therefore, the certificates, which are to be issued to individuals to carry with cumulative interest, could not have been issued to the appellant. When the mistake was detected on presentations of the certificates for payment of maturity amount, the Postal Authorities in our opinion rightly did not make the payment of cumulative interest, as the certificates so issued were irregular.
4. RULE 11 of the RULEs deals with irregular holding, which we quote :
"11. Irregular holding - (1) Any certificate purchased or acquired in contravention of these rules shall be encashed by the holder as soon as the fact of the holding being in contravention of these rules is discovered and no interest shall be paid on any holding in contravention of these rules. (2) If any interest has been paid on any holding which is in contravention of these rules it shall be forthwith refunded to the Government failing which the Government shall be entitled to recover the amount involved from any money payable by the Government to the investor or as an arrear of land revenue."
Rule 11 clearly lays down that holder of the irregular certificates would not be entitled to interest in contravention of the Rules. Therefore, the appellant was not entitled to cumulative interest, on the irregular holdings, hence, Postal Authorities rightly paid the interest on the NSCs as applicable to Savings Bank Account rate or payment of simple interest on the face value of the certificates at the same rate as admissible for the time being in force. For that type of Savings Account which the holder of certificate was entitled to open under the provisions of the Rules.
The contention that the principle of promissory estoppel would apply cannot be accepted, as the rate of payment of cumulative interest was not available on the irregular holding, which the appellant held. The Supreme Court has considered the question of payment of interest in C.A. No. 1102/95 arising out of Special Leave Petition (Civil) No. 38 of 1995, decided on 1.5.1995. The Post Master, Dargamitta, supra held that the Maturity value should be calculated only on the basis of reduced rate of interest of 11% in view of the retrospective amendment of the Rules, and the contract rate specified on the NSCs though constituted as contract between the Government of India as seller and the holder of the NSCs as purchaser. But, this contract was contrary to the terms notified by the Government of India and which was due to inadvertence of the staff. Hence, there was no deficiency on the part of Government of India. The decision of the Supreme Court was followed by the State Consumer Disputes Redressal Commission, Andhra Pradesh, Hyderabad in case of Superintendent of Post Office & Anr. v. N. Naga Rangaiah, 1999 (2) CPR 39.
5. IN the circumstances, it would not be a case of promissory estoppel; therefore, the decisions relied by the learned Counsel for the appellant, which deals with the doctrine of promissory estoppel are of no help to the appellant.
6. IN the result, the appeal is dismissed with no order as to costs. A copy of this order be conveyed to the parties and a copy be sent to the District Forum alongwith record of the case. Appeal dismissed.
