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Judgment
Justice Sudip Ahluwalia, Member
This Revision Petition has been filed by the Petitioners/ Opposite Parties against the Respondents/Complainants challenging the impugned Order dated 17.10.2019 passed by the State Consumer Disputes Redressal Commission, Karnataka, Bangalore, in Appeal No. 554 of 2014. Vide such Order, the State Commission had allowed the Appeal filed by the Complainants and consequently, the Consumer Complaint No. 2321 of 2013 which was filed by the Complainants before the District Forum, Seshadripuram, Bangalore, was allowed directing and holding the Opposite Parties jointly and severally liable to pay the maturity amount with accrued interest thereon with interest @ 9% p.a. from the date of maturity till realisation. The Opposite Parties were also directed to pay Rs. 5,000/- towards compensation and Rs. 5,000/- towards cost of the proceedings.
The brief facts of the case are that the Complainant No.1 had opted to invest in the office of Opposite Party No.1 and had consequently, opened an account under the Public Provident Fund Scheme in 1992 for a period of 15 years. Subsequently, the Complainant No.1 was allotted Account no. 662 and the passbook was issued. It was averred that after completion of the said statutory period, the Complainant No.1 extended the period for another period of 5 years from 08.11.2008. The Complainant No.1 had also opened Accounts bearing nos. 1943 and 1852 in the names of Complainant No.2 and 3 respectively in the year 1999 (1999, being the year in which the investments began) for a period of 15 years on their behalf for them being minors at that time. Accordingly, the Opposite Party had also issued passbooks.
It was the case of the Complainants that the amounts of deposits were being collected by the government authorized agent along with passbook from the Complainants since the date of issuance of the passbook and the Complainants are entitled to receive the deposit made and interest earned as mentioned in the passbook. However, when the Opposite Party No.1 was being intimated to enter the name of Complainant No.2 as a major person in all the postal records as well as pass book, the Opposite Party No.1 orally raised an issue that some amounts of deposits of the Complainant No.2 were irregular and no interest would be paid to him. It was further averred that the Complainant vide letter dated 20.04.2013 to the Opposite Party No.4 and copy to the other Opposite Parties placed reliance on the Page 27 of the book written by Mr. Dureja (Retd. Asst. Post Master General) to support his averments. Subsequently, the Opposite Party no.1 sent the details to the Opposite Party No.2 stating that the investment has to be made upto Rs.70,000/- in a year and the above three accounts had to collectively grant interest towards deposits only to the extent of Rs.70,000/- in a year. Any excess of Rs.70,000/- had to be treated as irregular subscription and would not carry interest, and the excess amount would be refunded without any interest. Consequently, the Opposite Party No.2 sent a letter to the Complainant No.1 informing that the investments made in respect of Complainant no. 2 and 3 are not eligible for any interest and the deposits made by them are to be refunded without interest, and that the action taken by the Opposite Party No.1 is in order.
It was contended by the Complainants that the deposits were made right from the beginning through the authorized agents and they ought to have informed that there was any limit in deposit and instead of accepting the deposit, they ought to have refused at the beginning itself while opening the accounts. Even assuming that after opening the accounts, the limit was informed to the Complainants, still the deposits were blindly accepted along with entries made of the deposits and interest in the passbook. It was further averred that Opposite Parties should have followed the Rules and the Act if they were aware of the same and hence, they are bound to pay interest till maturity of claim i.e., 2014. It was also stated that it was a glaring mistake by the Opposite Parties in accepting the deposits regularly for more than 12 years. The Opposite are supposed to have knowledge of the PPF Act, 1968 and its amended rules, and its officers are also bound to inform every depositor of the same. Hence, it has been contended by the Complainant that the Complainant Nos. 2 and 3 are entitled to receive maturity benefit of all the deposits and the interest to be earned and then credited in the passbooks. The investments have been accepted by the Opposite Parties from the beginning till maturity without any objection and hence, they are now liable to pay the entire deposits and interest accumulated till the maturity period.
It was further stated that at this stage, the Opposite Parties are raising an issue stating that they will not pay any interest in respect of the Complainant Nos. 2 and 3, and whatever amount had been deposited would be refunded without interest, whereas the Opposite Parties should have issued notice immediately when the deposit limits were exceeded. Hence, the Complaint was filed before the Ld. District Forum being aggrieved by such acts of the Opposite Parties and alleged deficiency in service on their part seeking direction upon the Opposite Parties to pay the deposits made by the Complainants along with interest accrued and accumulated till the maturity period and damages of Rs.1,00,000/- each for costs of litigation, mental agony, harassment etc.
The Opposite Parties appeared before the District Forum and resisted the Complaint and denied all the allegations thereby denying deficiency in service on their part. It was contended by the Opposite Parties that as per Government of India instructions issued vide MOF(DEA) Notification No. GSR 768(E) dated 15.11.2002, any individual may on his own behalf or on behalf of a minor of whom he is the guardian subscribe to the PPF any amount not less than Rs.500/- and not more than Rs.70,000/- in a year. As per clarification (1) of the PPF Scheme 1968, the limit of deposits of Rs.70,000/- in a year by an individual in his self account and accounts opened by him on behalf of his minors of whom he is the guardian is combined under rule 3(1) of the Scheme [MOF(DEA) notification No. GSR 908(E) dated 06.12.2000]. Further, as per clarification (8) under the PPF scheme 1968, if the contributions in excess of Rs.70,000/- are made during any year, the deposits in excess of Rs.70,000/- will be treated as irregular subscriptions and will neither carry any interest nor this excess amount will be eligible for deduction under section 80c of the Income Tax Act. This excess amount will be refunded to the subscriber without any interest. Also, the declaration was signed by the Complainant no.1 while opening the accounts. Hence, the Opposite Parties alleged that the deposits made in excess of the limit of the subscription were eligible for refund without interest. Therefore, the Opposite Parties prayed for dismissal of the complaint with exemplary costs.
The Ld. District Forum vide its order dated 12.03.2014 dismissed the Complaint by accepting the contentions of the Opposite Parties and observing that nothing is contrary to the terms and conditions of the PPF Scheme.
Aggrieved by the above order, Appeal bearing No. 554 of 2014 was filed by Appellants/ Complainants against the Respondents/ Opposite Parties before the Karnataka State Consumer Disputes Redressal Commission, Bangalore.
The Ld. State Commission vide its impugned Order dated 17.10.2019 allowed the Appeal while setting aside the order of Ld. District Forum by placing reliance on the decision of this Commission in the case of ‘K.M. Singh v. Sr. Post Master, Ramesh Nagar IV (2005) CPJ 174 (NC)’ and directed the Opposite Parties to jointly and severally pay the maturity amount with accrued interest thereon with interest @9% p.a. from the date of maturity till realization, Rs.5,000/- as compensation and Rs.5,000/- as cost of the proceedings.
Hence, the present Revision Petition has been filed by the Petitioners/ Opposite Parties against the above-mentioned impugned order of the Ld. State Commission.
Heard the Ld. Counsel for Petitioners and Respondents. Perused the material available on record.
The complaint was dismissed by the District Forum which had observed inter alia –
“8. The crux of the matter is to consider, whether the complainants are entitle interest on exceeding of Rs. 70,000/-. In contra the advocate for the Ops submitted that, as per rule 3(1) of the scheme MOF (DEA) Notification No. ESR-908 E dated 06/12/2000. As per clarification (8) under PPF Scheme, if the contribution in excess of Rs. 70,000/- are made during the year by the subscriber, the deposits in excess of Rs. 70,000/- will be treated and irregular subscription and neither carry any interest nor this excess amount will be eligible for deduction under section 80 C of Income Tax. The excess amount will be refunded to the subscriber without any interest. Above all, the Ops have signed the declaration while opening all the three PPF account agreeing to abide by the provision of PPF scheme 1968 and amended from time to time have invested the amount to the extent of ceiling fixed in PPF scheme there would not be refund of deposits without any interest. The law mandates that, the opening of PPF account with signing a declaration is nothing but an agreement between the parties and same is binds both the parties. Above all As per clarification (8) under PPF Scheme, if the contribution in excess of Rs. 70,000/- are made during the year by the subscriber, the deposits in excess of Rs. 70,000/- will be treated as irregular subscription and neither carry any interest nor this excess amount will be eligible for deduction under section 80 C of Income Tax. The excess amount will be refunded to the subscriber without any interest. Above all, the Ops have signed the declaration while opening all the three PPF account agreeing to abide by the provision of PPF scheme 1968 and amended from time to time have invested the amount to the extent of ceiling fixed in PPF scheme there would not be refund of deposits without any interest. Hence, the above contention of the Ops is acceptable one and there is nothing wrong or contrary to terms and conditions of the PPF scheme. Also this forum has no jurisdiction to go against the policy of the Government authority. Under these circumstances, we find that, the complainants do not have a bone to pluck with the Ops and therefore complaint is dismissed leaving the parties to bear their own cost. Accordingly, we hold point No. A & B in the negative.”
Aggrieved by such dismissal, the Complainant preferred First Appeal No. 554 of 2014 which was allowed by the State Commission with the following observations-
“9. It appears that complainant has opened the PPF account for himself, on behalf of his two children and paid the premium amount towards the PPF account without any default whatever the facts remains that the premium amount paid by the complainants exceeds more than Rs. 70,000/- and on maturity, complainants claiming interest on the amount. However Ops on maturity denied to pay the interest, since the maturity amount was exceeding the ceiling fixed under PPF account of Rs. 70,000/- as per PPF rules and regulation. In this regard counsel for the appellant relied upon the decision rendered by the Hon’ble National Consumer Disputes Redressal Commission, reported in IV (2005) CPJ 174 (NC) in the case of K.M. Singh - Vs.- Sr. Post Master, Ramesh Nagar, wherein para 5 of the said order held that –
“District Forum held that it could not question the illegality or otherwise of the statutory rules. However, on the question of deficiency of service, the District Forum held that the Post Office was deficient as the agent and employees of the Post Office did not inform the complainant of the limit imposed under the Rules. Accordingly, the District Forum in its order dated 18.8.2001 directed the Post Office to pay interest on the amounts which exceeded the limits and to be refunded to the complainant as per the rules from the date of deposit till 16.8.2000 when Competent Authority took the final decision directing the Post Office to refund to the complainant which exceeded the subscribed limit @ 12% per annum. A sum of Rs. 2,000- was also awarded as compensation.”
Thus, the above decision is squarely applicable to the present on hand and complainant is entitled for the interest on the maturity amount. Hence the following;
ORDER
The appeal is allowed and consequently Complaint No. 2321/2013 on the file of the I Additional District Consumer Disputes Redressal Forum, Bangalore, is allowed directing the Ops jointly and severally held liable to pay the maturity amount with accrued interest thereon with interest @ 9% p.a., from the date of maturity till realisation.
Further, Ops are directed to pay Rs. 5,000/- towards compensation and Rs. 5,000/- towards cost of the proceedings.”
The moot points thus to be considered in this Revision Petition are two fold;
(i) Firstly, whether any account(s) opened in the name of a minor by his Guardian is/are liable to be treated as the Account(s) of the Guardian himself according to the prevalent PPF rules and notifications?
(ii) Secondly, whether interest accrued upon the deposits in more than one Accounts involving the minor and the Guardian separately would be restricted to the combined ceiling limit in operation at any given time, or whether those deposits are to be considered separate for the purpose of ceiling limit for each individual Account.
To come to a proper conclusion on these questions, it is first of all necessary to see what the rules in question were at the time the disputed accounts were opened. The Respondent/Guardian’s individual PPF account was opened in the year 1992, and thereafter, two separate accounts in the names of two minor sons were opened in 1999. To clarify further on these aspects, it would be necessary to know as to what was the format of the applications/undertakings signed by the Respondent/Guardian before opening of each account.
In the Post Office Savings Bank Manual Volume I, under Clause 150, certain salient features of the Public Provident Fund Accounts Scheme have been narrated. Those relevant for the purpose of the present case are –
“(iii) Any individual can subscribe to the Public Provident Fund on his own behalf or on behalf of a minor of whom he is a guardian any amount in multiples of Rs. 5/- not less than Rs. 100/- and not more than Rs. 60,000/- in a year. A year for the purpose of the scheme means a financial year (Ist April to 31st March)……
(v) Only one account can be opened in one name either in the authorised Post Office or in the State Bank or in the nationalized bank.”
Further, according to the Gazette Notification of the Ministry of Finance issued on 6.12.2000, for the purpose of opening a Public Provident Fund Account in the name of self/minor(s)/HUF or Association, the concerned Subscriber/Guardian is required to make certain declarations covered in Clause (iv) which happen to be as follows-
“(iv) I also declare that I shall adhere to the ceiling on deposits as provided for by Central Government from time to time, which is Rs. 60,000/- in a financial year at present together in an Individual Self Account and Account(s) on behalf of minor(s) of whom I am the Guardian/ a Hindu Undivided Family Account/ an Association Account. In case, at any time the said declaration is found untrue/false, no interest shall be payable to me/ the subscriber on the amount of deposits found in excess of the prescribed limit.”
Now, it has been clarified by way of Ministry of Finance (Department of Economic Affairs) vide notification No. GSR 908 E of even dated (6.12.2000) that –
“(1) The limit of deposits of Rs. 70,000 in a year by an individual in his self-account and accounts opened by him on behalf of his minor(s) of whom he is the guardian is combined under rule 3(1) of the Scheme………..”
The Public Provident Fund Act and Scheme as corrected upto Ist April, 1999 also contains in Part-III thereof in Clause (3) –
“An individual can open a Public Provident Fund Account in his own name. He can also open an additional account on behalf of each minor of whom he is the guardian. He can subscribe any amount in multiples of Rs. 5 of not less than Rs. 100 and not more than Rs. 60,000 in a year in each of his account. A year for the purpose of the scheme means a financial year. (Ist April to 31st March)”.
Even in the prescribed form for opening a Public Provident Fund Account for himself, or in his capacity as the Guardian of some other person, the Subscriber/Guardian is required to again give an undertaking in relation to an account to be opened in the name of a minor to the effect –
“(ii) I hereby declare that I am not maintaining any other Public Provident Fund Account, except an account on behalf of a minor or a Hindu Undivided Family or an association of persons.”
This Bench thereafter perused the complete order passed by this Commission in the case of K.M. Singh (supra) quoted by the State Commission. It has been seen that first of all, the Scheme in which the Complainant in that case had made his deposits, was not in relation to any PPF Accounts, but certain other Monthly Income Accounts of which the rules did not exactly tally with those as in the PPF Scheme. Further, it transpires that after the said Revision Petition No. 1219 of 2004 filed by the Complainant was allowed by this Commission, the Complainant had filed an application for execution under Section 27 of the Consumer Protection Act, for non-compliance of the original order of the State Commission, which had gone in his favour. The Respondent in deference to the order directing payment as passed in the execution proceedings, tendered a cheque of the amount of Rs. 4,05,550/- which was not acceptable to the Complainant, whose contention thus was that he was entitled to an amount of Rs. 10,08,283/- instead of Rs. 4,05,550/- being offered by the Respondent. Prior to passing any final order in the aforesaid Revision Petition, this Commission on 27.9.2004 directed the Respondent/Sr. Post Master, Ramesh Nagar, to disclose the basis of its calculation in the following manner-
“13……………. Respondent to file clear detailed affidavit with regard to all the 11 accounts maintained by the complainant which were the subject matter of the previous proceedings and to what extent it was irregular on the basis of the limit prescribed under Regulation 4 of the MIS. This is required to be done because the order passed by the District Forum to that extent is not clear as it has left it to the respondent to calculate it and refund the amount with interest as directed.
The affidavit should contain all details of 11 accounts opened by the complainant at the relevant time, irregularity of exceeding the limit in each account at the relevant point of time and the interest payable thereon under the scheme as well as by the order passed by the District Forum.”
Subsequently, after seeing the calculation sheet submitted on affidavit on behalf of the Respondent, this Commission ultimately came to the conclusion that there was no error apparent in the detailed calculation sheet. It would, therefore, become clear that even in the aforesaid Revision Petition, this Commission had specifically taken note of the aspect of the irregularity in deposits by the Complainant in respect of each of his 11 accounts by exceeding the limit in each account at the relevant point of time. Similar is the situation in the present case where irregularity in deposits has been pleaded on behalf of the Petitioner/ Opposite Party as being beyond the permissible ceiling limit for the relevant PPF Account for various years.
The combined reading of the relevant salient features of the PPF Accounts Scheme under Clause 150 in the Post Office Savings Bank Manual Volume I, the gazette notification of 6.12.2000, Clause 3 (I) as corrected upto April, 1999 as also the declarations required to be signed by the subscriber/person opening the Account, whether in his own individual name, or as a Guardian on behalf of a minor, leaves no doubt that the concerned subscriber is required to adhere to the ceiling limit of deposits during any given financial year for all the Accounts combined together. As seen from the Synopsis filed on behalf of the Petitioners on 7.11.2022, such ceiling limit on the amounts depositable upto the financial year 2001-02 was Rs. 60,000/- which was subsequently enhanced to Rs. 70,000/- per year for the following 9 years till Financial Year 2010-11. The same was thereafter enhanced to Rs. 1,00,000/- p.a. for the following two financial years. But the bottom line is that for all the three separate Accounts in the names of the original subscriber/father of the minors himself, and those of his two minor sons subsequently, the combined subscription during any given financial year could not have been more than the limit specified for that particular year. Any amounts deposited over and above the said ceiling limit were therefore clearly liable to be treated as irregular deposits over which no interest would have been payable, especially considering that the objective behind the high rate of interest prescribed for the PPF Accounts in comparison to other savings schemes was the opportunity to the subscriber(s) to avail of Income Tax benefits towards such subscription upto only a specified limit as permissible.
The District Forum was therefore correct in dismissing the complaint as it was clear that the Complainant/subscriber, in any given Financial Year would not have been entitled to interest under the PPF Scheme for any deposits made over and above the prescribed ceiling limit as applicable in the given Financial Year. The Ld. State Commission therefore would appear to have acted with material irregularity in allowing the complaint in favour of the Appellants/Complainant after setting aside the substantially well-reasoned Order of the District Forum.
However, the District Forum itself had slightly erred in having dismissed the complaint in Toto, since even the irregular deposits made on behalf of the Complainants during the relevant year, ought to have been refunded to the Account Holder(s) albeit without crediting any interest upon such excessive irregular deposits.
For the aforesaid reasons, the present Revision Petition is allowed after setting aside the impugned Order passed by the Ld. State Commission, and modifying the Order of the District Forum to the extent that while the Complainants are not entitled to any interest on the irregular deposits made during the subsistence of their PPF Account, in excess of the combined ceiling limit during any given Financial Year, yet they would be entitled to atleast receive back such excessive irregular amounts deposited by them without any interest thereupon, in addition to refund of their original deposits within the ceiling limit with interest at the prescribed rates during the relevant Financial Year(s). The amounts thus found admissible to the Respondent/Complainant be paid to him by the Petitioners within 03 months from the date of this Order.
Pending application(s), if any, also stand disposed off as having been rendered infructuous.