Karnataka High Court
State Bank Of India vs Union Of India on 21 August, 2023
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NC: 2023:KHC:33598
WP No. 53807 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF AUGUST, 2023
BEFORE
THE HON'BLE MR JUSTICE R. NATARAJ
WRIT PETITION NO. 53807 OF 2014 (GM-RES)
BETWEEN:
1. STATE BANK OF INDIA
POLICY AND PENSIONERS
MANAGEMENT DEPARTMENT,
CORPORATE CENTRE,
16TH FLOOR, POST BOX NO.12,
MUMBAI-400 021
REPRESENTED BY
DY. GENERAL MANAGER (P AND PMD)
2. STATE BANK OF INDIA
PPF AND G DEPARTMENT,
AMARAVATI LOCAL HEAD OFFICE,
GUNFOUNDRY,
HYDERABAD-500001
TELANGANA-INDIA
REP. BY ASST. GENERAL MANAGER
Digitally
signed by (AMENDEDMENT HAS BEEN MADE
SUMA IN TERMS OF THE ORDERS PASSED BY
Location: THIS HON'BLE COURT ON 14.08.2023)
HIGH
COURT OF ...PETITIONERS
KARNATAKA (BY SRI. T.P. MUTHANNA, ADVOCATE)
AND:
1. UNION OF INDIA
THE ADDL. SECRETARY TO
GOVT. OF INDIA
DEPARTMENT OF ECONOMIC AFFAIRS,
BUDGET DIVISION,
MINISTRY OF FINANCE,
NORTH BLOCK,
NEW DELHI-110001
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WP No. 53807 of 2014
2. THE SECRETARY
DEPARTMENT OF POSTS,
DAK BHAVAN,
PARLIAMENT STREET,
NEW DELHI-110001.
3. THE POST MASTER GENERAL
BANGALORE CIRCLE,
BANGALORE-560001
4. THE CHIEF POST MASTER
GENERAL POST OFFICE,
DR. B.R. AMBEDKAR VEEDHI,
BANGALORE-560001
5. THE SUPERINTENDENT OF POST OFFICES
GULBARGA DIVISION,
GULBARGA-585101
6. THE POST MASTER
BIDAR HEAD POST OFFICE,
BIDAR-585401.
7. THE POST MASTER
KOPPAL HEAD POST OFFICE,
KOPPAL-583231
8. THE POST MASTER
RAICHUR HEAD POST OFFICE,
RAICHUR-584101.
...RESPONDENTS
(BY SRI. H. SHANTHI BUSHAN, ADDITIONAL SOLICITOR GENERAL,
FOR RESPONDENT NOS.1 TO 8)
THIS WP IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE
TH
COMMUNICATION ISSUED BY THE 4 RESPONDENT BEARING
NO.CPM/KVP/07@BGGPO DATED 24.04.2007 AS AT ANNEXURE-B
AND ETC.
THIS PETITION, COMING ON FOR HEARING, THIS DAY, THE
COURT MADE THE FOLLOWING:
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WP No. 53807 of 2014
ORDER
The petitioners have called in question the communications bearing No.CPM/KVP/07@BGGPO dated 24.04.2007 and No.D/KVP/MISC/09-10@BGGPO dated 28.03.2011 addressed by the respondent No.4 and a communication bearing No.BDR/KVP/d/c dated 31.10.2011 addressed by the respondent No.5, by which, they refused to release the matured value of the Kisan Vikas Patras subscribed by the petitioners.
2. The petitioners contend that the petitioner No.1 is a Scheduled Bank established under the provisions of the SBI (Subsidiary Banking Regulation) Act, 1959. The petitioner No.2 is a Trust formed with the Principal object of ensuring proper collection and disbursement of the provident fund of the employees of petitioner No.1. They contend that the respondent Nos.2 to 8 are authorities mentioned in the Post Office Act, 1898 and are empowered under the Government Savings Certificate Act, 1959 to issue certificates aimed at encouraging savings. Accordingly, they were authorized to issue Kisan Vikas Patra offering interest on the savings. -4-
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3. The petitioner No.2 attracted by the offers made in the brochures issued by the respondent Nos.1 and 2 invested a sum of Rs.24,00,00,000/- by purchasing 13 Kisan Vikas Patras between 28.03.2002 and 30.03.2005 as it was assured that the maturity value would be Rs.48,00,00,000/- at the time of payout. However, it is stated that the respondent No.4 addressed a letter dated 24.04.2007 stating that the Kisan Vikas Patras have to be issued to entities which are registered in accordance with law and that petitioner No.2 was an unregistered trust. Therefore, respondent No.4 offered to refund the face value of the Kisan Vikas Patras. Likewise, another letter dated 28.11.2008 was addressed by the respondent No.5 enquiring with the petitioner No.1, whether the petitioners were ready to receive the face value of the Kisan Vikas Patras on or after the date of maturity or whether the petitioners wanted the full maturity value i.e. the face value and full interest. Following this, the respondent No.4 addressed a letter dated 28.03.2011 informing the petitioner No.1 that the Kisan Vikas Patra Nos.190463 to 190550 and 193001 to 193112 was paid up and the proceeds was credited into the account by allowing interest @ 3.5% per annum. The -5- NC: 2023:KHC:33598 WP No. 53807 of 2014 respondent No.6 followed suit by its communication dated 31.10.2011 informing the petitioner No.1 that the interest on the Kisan Vikas Patras subscribed by the petitioners would be allowed at the rates fixed for deposits in savings bank account. The petitioners contend that Kisan Vikas Patras subscribed by them with the respondent No.7 was requested to be released under protest. The petitioners therefore contend that the respondents having once issued the Kisan Vikas Patras cannot resile from their commitment to pay the full matured value on the mere ground that petitioner No.2 is not registered in accordance with law and that the rules prescribe that Kisan Vikas Patras could be issued only to entities which were registered.
4. Elaborating on the contentions of the petitioners, the learned counsel for the petitioners submitted that the respondents were aware of the fact that the petitioner No.2 is a provident fund and gratuity fund trust, constituted from amongst the management of petitioner No.1 as well certain employees as provided under the Employees Provident Fund Scheme, 1952 and therefore, the question of getting it -6- NC: 2023:KHC:33598 WP No. 53807 of 2014 registered did not arise and therefore, the respondents were bound to pay interest as agreed on the Kisan Vikas patra.
5. It is further contended that similar questions arose before the High Court of Gujarat at Ahmedabad in the case of Secretary Vs. Union of India (UOI) and Ors. - 2010 SCC Online Guj 3687 where a deposit was made by the society and that the post offices concerned did not pay the interest on the ground that the society was not entitled for any interest as per Post Office Rules, 1997. The High Court of Gujarath directed the concerned post offices to pay up the interest as agreed in terms of the judgment dated 21.04.2010.
6. Similarly in the case of Sukchain Hire Purchase Limited Vs. Union of India (UOI) and Ors., the High Court of Punjab and Haryana was considering a case of a company purchasing the Kisan Vikas Patras and the concerned post offices had refused to disburse the maturity amount on the ground that the company was not entitled to hold Kisan Vikas Patra. The High Court of Punjab and Haryana vide its judgment on 24.01.2008 held that the depositor had a legitimate expectation to receive the matured amount and the refusal by -7- NC: 2023:KHC:33598 WP No. 53807 of 2014 the concerned post offices on some irregular ground is unjustifiable.
7. Similarly in the case of Mormugao Municipal Council Vs. Union of India - 2012 SCC Online BOM. 709 the High Court of Bombay at Goa, was considering a similar case, held that if there is some irregularity in issuance of certificates, the same was due to the fault on the part of post offices and therefore it is not open for the postal authorities not to pay the holder the amount of certificates guaranteed under the certificates.
8. Likewise in the case of Union of India (UOI) Vs. Kashmir Finance Ltd., - AIR 2007 J.K. 4, the High Court of Jammu and Kashmir had taken a similar view. The learned counsel therefore, contended that the respondent Nos.1 to 4 cannot take a contra contention after having complied with the judgments of the various High Courts referred above. He also pointed out that the requirement of a registration of trust was dispensed with, in view of omission of Clause (va) of Rule 2 of Kisan Vikas Patra Rules 1988 with effect from 13.05.2005. He therefore, contended that the respondents cannot deny the -8- NC: 2023:KHC:33598 WP No. 53807 of 2014 benefit of the interest payable under the certificates held by petitioner No.2.
9. Per contra, learned Assistant Solicitor General submitted that the rules mandated, that the holder of the certificate should be registered under any law for the time being in force. An unregistered body of persons claiming to be a trust is not entitled to hold any certificates and therefore, the petitioner No.2 is not entitled to any interest. He further contended that disciplinary action was initiated against the concerned, who had issued the Kisan Vikas Patras to the petitioner No.2 without verifying, whether it was registered in accordance with law or not. Furthermore, he contends that an opportunity was granted to the petitioner No.2 to register itself in accordance with law and since petitioner No.2 did not do so, it was not entitled to any interest. He relied upon the judgment of High court of Gujarath in the case of Devanth Co-operative Housing Society Limited, Ahmedabad Vs. Sub-Post Master, Jawahar Chowk P.O., Ahmedabad - 2004 SCC Online Guj 90, where a cooperative society had purchased the Kisan Vikas Patras and on the date of maturity, it approached the concerned post office. However, the post office pointed out -9- NC: 2023:KHC:33598 WP No. 53807 of 2014 that the petitioner therein was not entitled to purchase Kisan Vikas Patra under the Kisan Vikas Patra Rules and therefore, it was not entitled to interest payable as agreed. The High Court of Gujarat held that a co-operative society was not entitled to purchase Kisan Vikas Patras and therefore, it is not entitled to any interest. He therefore contended that petitioner No.2 is not entitled to any interest.
10. Learned Assistant Solicitor General also brought to the notice of the Court, the Post Office Saving Certificate Rules, 1960 which prescribes a limit under which a certificate may be purchased and submits that the maximum limit that could be deposited by a trust is a sum of Rs.50,000/-. Therefore, any amount in excess deposited by respondent No.2 cannot be treated to be a valid and therefore, the petitioner No.2 is not entitled to any interest. He further contended that the petitioners have not challenged the Rule 6 of sub-clause (2) of Kisan Vikas Patra Rules, 1988 and unless the petitioners did so, they were not entitled to the interest on the deposit.
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11. I have considered the submissions made by learned counsel for the petitioners and learned Assistant Solicitor General for respondents.
12. The Kisan Vikas Patra Rules, 1988 was issued by the Government of India in exercise of the powers conferred on it, under Section 12 of the Government Savings Certificates Act, 1959. Note to Rule 4 provided that the Central Government notified the Kisan Vikas Patra in denomination of Rs.50,000/-. Rule 5 provided that any number of certificates of the denomination of Rs.50,000/- could be purchased. Rule 6 provided as follows:
"6. Type 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 - (a) an adult for himself or on behalf of a minor or to a minor;
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(b) A Joint 'A' type Certificate may be issued jointly to two adults payable to both holders jointly or to the survivor.
(c) A Joint 'B' type Certificate may be issued jointly to two adults payable to either of holders or to the survivor."
A Trust is defined under Rule2(v)(a) of Kisan Vikas Patra Rules, 1988 as a "trust registered under any law for the time being in force".
13. As rightly contended by learned counsel for the petitioners, petitioner No.2 is a statutory trust created by the petitioner No.1 and certain employees of petitioner No.1 as provided under the EPF Scheme, 1952. The petitioner No.2 would obviously be registered before the concerned Provident Fund Commissioner, as deposits made by petitioner No.1 towards the PF would be kept in a trust created by petitioner No.1 along with its employees. Therefore, the requirement of the erstwhile Kisan Vikas Patra Rules 1988, that a trust must be registered under any law for the time being in force was duly satisfied and it did not necessarily mean that the constitution of petitioner No.2 must have been registered under the provisions of Registration Act, 1908. As a matter of fact, there is no stipulation under the Registration Act, 1908 for
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NC: 2023:KHC:33598 WP No. 53807 of 2014 compulsory registration of a trust. If the petitioner No.2 is registered as trust under the EPF Scheme, 1952, the contentions raised by learned Additional Solicitor General for respondent Nos.1 to 4 that the petitioner No.2 is not registered "under any law for the time being in force is liable to be rejected outrightly". Therefore, the reliance on the judgment of the Gujarath High Court is of no avail. This contention that the deposits could be treated as an erroneous acquisition by the petitioners and interest on the deposits as per the Post Office Saving Account Rules, 1981 may be allowed, is also rejected.
14. If the respondents have received deposits particularly a provident fund contribution by the petitioner No.1 as well as the employees of the petitioner No.1, in a Kisan Vikas Patra issued by the respondent Nos.4 to 8, assuring the repayment of double the amount deposited at the time of its maturity, the respondents cannot certainly wriggle out of the situation claiming that the petitioner No.2 was not registered under any law for the time being in force.
15. The further contention of the learned Additional Solicitor General that unless the petitioners challenged the
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NC: 2023:KHC:33598 WP No. 53807 of 2014 validity of the Rule 6, they are not entitled to any releifs in this writ petition, is referred only to be rejected as petitioner No.2 was a trust constituted validly under the statute and registered before the concerned Provident Fund Commissioner and therefore, there was no need for the petitioners to challenge the validity of any rule.
16. Once the deposit is made by the petitioners, they did expect legitimately that the money deposited by them would earn interest as offered by respondents. The respondents, therefore cannot deny the benefit on the bonafide deposits made by the petitioners. The conduct of the respondents in waiting till near the date of maternity and then claiming that the petitioner is not entitled to the maturity value therefore, is un-business like and this Court in exercise of its extraordinary jurisdiction under Articles 226 of the Constitution of India can haul up the respondents to pay interest on the matured value of Kisan Vikas Patras issued to the petitioners.
In that view of the matter, this writ petition is allowed. The concerned respondents are directed to pay up the interest as agreed on the deposits made by the petitioners in
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NC: 2023:KHC:33598 WP No. 53807 of 2014 their respective post office, after deducting the amount already paid.
If the respondents did not pay up the interest, as agreed by them under the respective certificates, within a period of one month from the date of receipt of a copy of this order, the respondents shall pay interest at the rate of 8% per annum from the date of default till the date of realization, which shall be recovered from the concerned person/s responsible for the delay.
Sd/-
JUDGE HJ List No.: 1 Sl No.: 25