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Issues Involved:
1. Entitlement of plaintiffs to claim interest on 7-Year National Savings Certificates (II Issue). 2. Validity of Rule 13 of the Post Office Savings Certificates Rules, 1960. 3. Entitlement of plaintiffs to reasonable compensation. 4. Relief to be granted. Detailed Analysis: Issue 1: Entitlement to Claim Interest The plaintiffs, trustees of a public charitable trust, purchased 7-Year National Savings Certificates (II Issue) worth Rs. 1,00,000. Upon maturity, the defendants refused to pay the interest, citing a contravention of the Savings Certificates Rules, which allegedly prohibited charitable trusts exempt from income tax from purchasing such certificates. The court examined the relevant rules and found no explicit prohibition against charitable trusts purchasing these certificates. Rule 4(2) and Rule 5(iv) of the Post Office Savings Certificates Rules, 1960, were interpreted to include associations, institutions, or bodies registered under any law and exempt from income tax, allowing them to invest up to Rs. 1,00,000. The court concluded that the plaintiffs were entitled to the interest, and the defendants' refusal was based on an erroneous interpretation of the rules. Issue 2: Validity of Rule 13 The plaintiffs challenged Rule 13, which mandates that certificates purchased in contravention of the rules be encashed at face value without interest. However, the court did not find it necessary to decide on the validity of Rule 13, as it determined that the plaintiffs were entitled to the interest under the existing rules. Issue 3: Entitlement to Reasonable Compensation The court did not decide on the issue of reasonable compensation as the primary relief sought by the plaintiffs, i.e., the payment of interest, was granted based on the interpretation of the rules. Issue 4: Relief The court decreed that the plaintiffs were entitled to Rs. 41,000 as interest on the National Savings Certificates, along with 12% per annum interest from April 11, 1979, until payment, and the costs of the suit. However, the plaintiffs agreed to forgo the claim for costs if the defendants paid the decretal amount with interest by February 28, 1990. Conclusion: The court ruled in favor of the plaintiffs, affirming their right to claim interest on the National Savings Certificates and rejecting the defendants' interpretation of the rules that sought to exclude charitable trusts from such investments. The judgment emphasized the broad inclusion criteria under the relevant rules, ensuring that public charitable trusts could indeed benefit from the National Savings Certificates scheme.
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