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30.[1)If an account is opened in contravention of the P.O.S.B.

General Rules, 1981, the account should be

closed under the orders of the Head Postmaster. No further transaction should be allowed in it .If any

annual interest has been credited in the account, it should be adjusted at the time of closure of the account

through the register of rectification of interest and a remark of adjustment made in the ledger card. A

written notice in the following form should be sent to the depositor indicating the irregular opening with a

request to close the account and take the withdrawal payment personally or through an agent. If the

depositor does not comply with the request, the account may be closed and the amount remitted by

CHEQUE/MO deducting the usual money order commission from the amount of credit.




(From the order dated 25.10.2001 in Appeal No.A-2146/01
of the State Commission, Delhi)

K.M. Singh … Petitioner

Senior Post Master, Ramesh Nagar New Delhi … Respondent


Indian Post Office Act, 1898 - Post Office (monthly income account) Rules 1987
framed under Government Saving Banks Act, 1873 - statutory nature of rule,
decision of National Commission in Department of Post and Telegraphs vs. Dr.
R.C. Saxena - 1997 (1) CPR 74 - held no good law - prohibition of opening of
more than one account under Rule 4 of the Post Office (monthly income
account) Rules, 1987.

DATED THE 15th November, 2002


K.M. Singh, the complainant is the petitioner before us. He

had various monthly income accounts in two different Post Offices, Rajouri Garden

and Ramesh Nagar, Head Office. There were 16 such accounts starting from 1993 to

1998. One of such account was closed on 18.12.2000 and five in 2001. It is not

necessary for us to give the details of these accounts except to note that a letter dated

16.7.1999 was written by the Post Office to Singh pointing out that two of his

accounts were irregular as total share of investment exceeded Rs.2,04,000/-. The

accounts had No.84667 dated 3.1.98 and 82934 dated 8.9.95. Therefore, decision

was taken to stop crediting interest in these accounts. Singh complained that he

was never told of excess deposit or there was any limit of deposits. In any case he

wanted the regularisation of irregular accounts. For that he even approached Post

Office. Ultimately complaining deficiency in service Singh went to the District

It was the case of the Post Office that monthly income scheme is

governed by Post Office (monthly income account) Rules 1987 framed by the Central

Government in the exercise of its power conferred under Section 15 of the

Government Saving Banks Act, 1873. Rule 4 of the said Rules provided that a

depositor may open more than one account subject to the condition that deposits in all

accounts taken together do not exceed Rs.2,04,000/- which was for a single account

and Rs. 4,08,000/- in joint account and from 1.2.2000 this limit was further

enhanced respectively to Rs.3.00 lakhs and Rs.6.00 lakhs. Under Rule 17 of the

Rules decision was, therefore, taken by the Head Post Office who was competent to

take such decision to cause the accounts in excess to be closed and deposits made in
these accounts to be refunded to the depositor without interest. Rule 10 no

doubt empowers the Central Government to relax the Rules.

It was the case of the complainant that the rule was of administrative

nature and meant for the administrative convenience of the Post Office and it did

not bar payment of interest in case depositor opened accounts in violation

thereof. His other plea was that it was the fault of the agent and the employees of the

Post office in getting the accounts opened and not being told of the bar in opening

more than prescribed accounts. Singh said that he was quite ignorant of the intricacy

of the Rules.

District Forum held that it could not question the virus or illegality of

the statutory rules made under the Government Saving Bank Act , 1873 and held

that the rule would prevail. On the question of deficiency of service District Forum

was of the view that certainly the Post Office was deficient as the agent and

employees of the Post Office at the time of opening of the account did not

inform Singh of the limit imposed under the Rules. District Forum, therefore,

directed the Post office to pay interest on the amounts which exceeded the

limits and to be refunded to Singh 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 Singh which exceeded the prescribed limit @ 12% per annum. A

Sum of Rs.2000/- was also awarded as compensation.

Singh went in appeal to the State Commission which dismissed the

same in limine. Aggrieved from the order of the State Commission, Singh has come

to the National Commission.

We have examined the relevant provisions of the Government

Saving Bank Act, 1873 and the rules framed thereunder. These rules are statutory

and have been framed by the Central Government in the exercise of its power

conferred by the Act. Singh cannot feign ignorance of these rules. In fact the

number of accounts opened by him would rather show that he was quite well versed

in the opening of monthly income accounts. Singh referred to the decision of this
Commission in the case of Department of Post and Telegraphs vs. Dr. R.C. Saxena -

1997 (1) CPR 74 wherein in somewhat similar circumstances this Commission held

that Rule 4 of the Post Office Savings Bank General Rules 1981 was made for the

administrative convenience of the Department and did not bar the payment of

interest on an account opened by the depositor in ignorance of that Rule. We are

afraid, we are unable to accept the view so expressed earlier. Perhaps in that

case National Commission was guided by the facts and circumstance of that

case. Here the rules were National Savings Scheme rules, 1987 also framed by the

Central Government in exercise of powers conferred on it under Section 15 of

the Government Saving Bank Act, 1873. Rule 4 provided that depositor may

open not more than one account under the scheme. This Rule is the law and cannot

be said merely administrative instructions. The judgment in the case of Department

of Posts & Telegraphs vs. Dr. R.C. Saxena does not, therefore, lay a good

law. Singh then referred Rule 10 which as noted above, empowers the Central

Government if it is satisfied that operation of any of the provisions of the Rules

caused undue hardship to the depositor then it may by order, for reasons to be

recorded in laying relxation, requirement of that provision in a manner not

inconsistent with the provisions of the Act. We are afraid the Central

Government should have exercised that power or not under Rule 10 is not for us to

decide or comment on.

We, therefore do not find any error in the order of the District Forum

which was affirmed by the State Commission to express a contrary view. This

petition is, therefore, dismissed.