2001 (6) TMI 780 - Commission - Companies Law

Summary

Issues:
1. Interpretation of NSCs Vth Issue Rules, 1973 regarding issuance of National Saving Certificates in the name of a firm.
2. Liability of the Postal Department for deficiency in service.
3. Entitlement of the complainant to receive the maturity amount of NSCs and interest.

Interpretation of NSCs Vth Issue Rules, 1973:
The case involved a dispute regarding the issuance of National Saving Certificates (NSCs) in the name of a firm, which was challenged by the postal department citing violation of NSCs Vth Issue Rules, 1973. The appellant argued that any certificates purchased against the rules are void and no interest should be paid. However, the Commission disagreed, holding the postal office accountable for issuing the certificates in the firm's name and failing to point out the violation. The Commission established the department's responsibility for negligence and deficiency in service, emphasizing that the certificates were issued with the partner's name, indicating shared responsibility. The Commission ruled in favor of the complainant, stating that the department was at fault for allowing the purchase and issuance of the NSCs in question.

Liability of the Postal Department:
The District Forum found deficiency in service on the part of the Postal Department and ordered the opposite party to pay the maturity amount of NSCs along with compensation for mental torture. The Commission upheld this decision, highlighting the department's negligence in allowing the purchase and issuance of NSCs in the firm's name. The Commission emphasized that the officials should have refused the application for NSCs and pointed out the rule violation. The Commission held the department responsible for the deficiency in service and confirmed the District Forum's order for payment of the maturity amount and additional compensation.

Entitlement to Maturity Amount and Interest:
The appellant challenged the correctness of the District Forum's order, arguing against the payment of interest on the irregular certificates. The Commission, after reviewing the evidence, concluded that the complainant was entitled to receive the full maturity value of the NSCs along with interest at the rate applicable on Saving Bank Account from the date of maturity till the date of payment. The Commission criticized the District Consumer Forum for not considering the loss incurred by the complainant during this period and directed the payment of interest in addition to the maturity value. The Commission dismissed the appeal and confirmed the District Forum's judgment with the modification of including interest on the Saving Bank Account applicable from time to time.

In conclusion, the judgment by the Uttar Pradesh State Consumer Disputes Redressal Commission addressed the interpretation of NSCs Vth Issue Rules, 1973, the liability of the Postal Department for deficiency in service, and the entitlement of the complainant to receive the maturity amount of NSCs along with interest. The Commission held the department accountable for negligence in allowing the purchase and issuance of NSCs in the firm's name, emphasizing the responsibility of officials to point out rule violations. The Commission confirmed the District Forum's order for payment of the maturity amount and additional compensation, while also directing the payment of interest on the Saving Bank Account from the date of maturity till the date of payment.