1998 (3) TMI 526 - Commission - Companies Law

Summary

Issues:
1. Interpretation of National Savings Certificates (6th Issue) Rules, 1961 regarding eligibility to purchase.
2. Liability of Postal Department for negligence in issuing National Savings Certificates.
3. Entitlement of complainants to compensation and interest.

Analysis:
1. The main issue in this case revolved around the interpretation of Rule 7 of the National Savings Certificates (6th Issue) Rules, 1961, which specifies the eligibility criteria for purchasing these certificates. The appellant contended that only specific entities like Co-operative Societies, Banks, Government Officers, and certain authorized bodies can purchase these certificates. However, the District Forum found that the Postal Officers negligently issued the certificates to the complainants, who were not eligible entities. As a result, the Postal Department was held liable for the deficiency in service.

2. The judgment highlighted that the responsibility lies with the Postal Officers to ensure that the correct entities are purchasing the National Savings Certificates. Since the certificates were issued in the name of complainants who were not eligible, the Postal Department was deemed negligent. The District Forum ordered the appellant to pay compensation to the complainants for the financial loss and mental agony caused by the blocked money for six years.

3. In terms of compensation, the appellant was directed to pay interest at the Savings Bank Account rate from the date of the certificates' issue to the filing of the complaint. Additionally, the appellant was ordered to compensate the complainants financially. The judgment specified the amounts to be paid as compensation to the complainants within a month, failing which interest at 18% per annum would be applicable until the actual payment date.

Overall, the judgment emphasized the importance of adhering to the eligibility criteria for purchasing National Savings Certificates and held the Postal Department accountable for negligence in issuing certificates to ineligible entities. The ruling provided detailed instructions for compensation and interest payments to the complainants, ensuring redressal for the financial and mental distress caused by the mishandling of the certificates.