Supreme Court - Daily Orders
North Eastern Hills University vs Union Of India . on 1 April, 2014
aITEM NO.9 COURT NO.11 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Civil) No(s).29815/2011
(From the judgement and order dated 19/07/2011 in WP No.412/2005 of
The HIGH COURT OF GUWAHATI ,ASSAM)
NORTH EASTERN HILLS UNIVERSITY Petitioner(s)
VERSUS
UNION OF INDIA & ORS. Respondent(s)
(With appln(s) for permission to place addl. documents on record and
prayer for interim relief and office report)
Date: 01/04/2014 This Petition was called on for hearing today.
CORAM :
HON’BLE MR. JUSTICE SUDHANSU JYOTI MUKHOPADHAYA
HON’BLE MR. JUSTICE DIPAK MISRA
For Petitioner(s) Mr. Vijay Hansaria, Adv.
Ms. Neha Tandon Phookan, Adv.
Mr. R.B. Phookan, Adv.
Mr. Avinish Pandey, Adv.
Mr. Shailesh Madiyal,Adv.
For Respondent(s) Ms. Asha G. Nair, Adv.
Mr. S. Pattanaik, Adv.
Mr. B. Krishna Prasad,Adv.
UPON hearing counsel the Court made the following
O R D E R
Leave granted.
The appeal is allowed in terms of the Signed Order.
[RAJNI MUKHI] [USHA SHARMA] SR. P.A. COURT MASTER (Signed Order is placed on the file) 1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.4281 OF 2014 (arising out of SLP (C) No. 29815/2011) NORTH EASTERN HILLS UNIVERSITY APPELLANT VERSUS UNION OF INDIA & ORS. RESPONDENTS O R D E R Leave granted.
This appeal has been preferred by the appellant against the judgment and order dated 19th July, 2011 passed by the Division Bench of the Gauhati High Court in W.P.(C) No. 412 (SH) of 2005. By the impugned Judgment, the High Court held that if the appellant-University made an irregular investment, it is not entitled for any interest on such investment. The appellant-University was supposed to pay interest on provident fund amount of its employees which had been collected by the University at the rate of 8%. To ensure that employees could receive interest the appellant-University invested the provident fund amount in the year 2002-03 by purchasing Kisan Vikas Patras (hereinafter referred to as the ‘KVP’) and National Saving Certificates (hereinafter referred to as the ‘NSC’) from GPO, Shillong. In the year 2005, an officer of the appellant-University wanted premature encashment of KVP and NSC and therefore intimated the Post Office to encash the KVP and NSC, but it was not allowed. He was informed that the investment was irregular therefore, no 2 interest was payable thereon. The invested amount was released only with 1.5% interest. In that situation the appellant moved before the High Court for encashment of the KVP and NSC by way of writ petition and the same was dismissed by the impugned judgment dated 19th July, 2011.
On notice, the Union of India has appeared and contested the appeal. According to the respondents, the University was not supposed to invest the amount of provident fund of its employees in KVP or NSC scheme. However, this was disputed by the learned counsel appearing on behalf of the appellant. According to appellant, there was no bar for such investment by the University in KVP and NSC and if any irregularity is committed by the officials of GPO the appellant cannot suffer for the same.
The schemes aforesaid are guided by Kisan Vikas Patra Rules,1988 and NSC (VIII Issue) (Amendment) Rules, 1989. Rule 6 of Kisan Vikas Patra Rules, 1988 deals with types of certificates and issue thereof, which reads as under:
"6. Types of certificates and issue thereof-(1)The certificates 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) A Single Holder type Certificate may be issue to:-
(i) an adult for himself or on behalf of a minor or to a minor;
(ii) a trust [MOF (DEA) Notification No GSR 119(E) dated 8.3.1995 effective from 1.4.1995] 3
(b) A Joint ’A’ Type certificate may be issued jointly to two adults payable to both the holders jointly or to the survivor.
(c) A Joint ’B’ Type certificate may be issued jointly to two adults payable to either of the holders or to the survivor.
(3) Non Resident Indians are not eligible to purchase the Kisan Vikas Patras ;
Provided that if a resident who subsequently becomes Non Resident Indian during the currency of the maturity period, shall be allowed to avail the benefits of the Patras on maturity on a non- repatriation basis.
[MOF (DEA) Notification No. GSR 592 (E) dated 25.7.2003] It is argued that prior to 1.4.1995 these certificates could be issued to:-
(i) A banking company;
(ii) A company;
(iii)A corporation;
(iv) An association, institution or body registered as a society under any law for the time being in force;
(v) A firm registered under the Indian Partnership Act, 1932 (9 of 1932);
(vi) A local authority;
(vii)A Cooperative society bank/institution registered as such under any law for the time being in force.
It appears that an internal clarification was issued by DG Posts letters No.61-2/89-SB dated 21.2.1989 and No. 42-3-90-SB dated 4.9.1990 whereby it was intimated to the officers of the GPO that KVP cannot be purchased by the Karta on behalf of the Hindu Undivided Family (HUF) as there is no such provision in the said Rules and that the teacher’s provident funds are not eligible to be invested in KVP.
Clarifications are as follows:-
4
(1) The Kisan Vikas Patras cannot be purchased by the Karta on behalf of the Hindu Undivided Family (HUF) as there is no such provision in these rules.
(2) The Teacher’s Provident Funds are not eligible to be invested in Kisan Vikas Patras. However, a teacher in his individual name can purchase KVPs out of the money of his Provident Fund.
[D.G. Posts letters No. 61-2/89- SB dated 21.2.1989 and no. 42-3/90-SB dated 4.9.1990] (3) The KVPs can be purchased by a Trust which is registered under any law for the time being in force vide rule 2(va) above. The unregistered trusts cannot urchase KVPs.
Though the clarification by D.G. Post letters aforesaid have been brought on record, there is nothing on the record to suggest that public in general or the institutions were intimated by any Gazette Notification that under KVP Rules no such investment of teacher’s provident fund can be made by the institution or the University. The types of certificates to be issued under Rule 6 are single holder type certificate/joint certificate, etc. In absence of intimation to the public in general about clarification issued by DG Post vide letters dated 21st February, 1989 and 4th September, 1990, the investors cannot be faulted for investment if made towards KVP. If, internal clarification issued by DG Posts letters dated 21st February, 1989 and dated 4th September, 1990 were not followed by the employees and officers of the post office, it was open to the respondents to take disciplinary action against such employees and to recover the interest amount from them if they irregularly issued the certificates. But such 5 internal circular cannot be relied upon to deny the benefits to the investors whose investment has been accepted by the respondents.
Rule 4 of National Saving Certificates (VIII-ISSUE) Rules, 1989 deals with types of certificates and issue thereof, which reads as under:
"4. Types of Certificates and issue thereof- (1) The certificates 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) A Single Holder Type certificate may be issued to : -
(i) An adult for himself or on behalf or a minor or to a minor;
(ii) A trust
(b) A joint ‘A’ Type certificate may be issued jointly to two adults payable to both the holders jointly or to the survivor.
(iii) a Hindu undivided Family (3) Non Resident Indians are not eligible to purchase the National Savings Certificates:
Provided that if a resident who subsequently becomes Non Resident Indian during the currency of maturity period, shall be allowed to avail the benefits of the certificates on maturity on a Non Repatriation Basis."
Different types of certificates can be issued to an adult for himself or on behalf of a minor or to a minor, a trust, two adults payable to both the holders jointly or to the survivor or a Hindu Undivided Family. Non-resident Indians are not eligible to purchase the National Saving Certificates. Though Rule 4 did not specifically entitle any institution or University to purchase National Saving Certificate, the fact is 6 that in spite of Rule 4 such certificates were issued by respondents. If there was any fault it was on the part of the employees and officers of the respondent-Union of India who issued the NSC in favour of the University and for that the investor (University herein) cannot be faulted and it should not be denied the benefit to which otherwise it was entitled to as an investor.
For the reasons aforesaid while we are not inclined to accept the reasoning given by the High Court, we hold that the appellant-University is entitled for the amount with interest, as promised by respondents, the University being holder of KVP and NSC. It is informed at bar by the parties that in terms of the interim order passed by the High Court the principal amount with 3.5% has been paid to the University. If that be so, we hold that the University shall be entitled for the rest of the amount towards interest for which it is entitled under the Certificate(s) after deducting the amount of interest already paid to it. The respondents are directed to pay, rest of the dues with, a further 6% interest to be calculated from the date it was due to the appellant till the date it is paid. The amount shall be paid within three months. The appeal is allowed with the aforesaid observations and directions.
........................... J.
(SUDHANSU JYOTI MUKHOPADHAYA) ...........................J. (DIPAK MISRA) NEW DELHI;
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