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Issues: Interpretation of Rule 9A of the Post Office Recurring Deposit Rules, 1981 before and after its amendment, retrospective application of rules, contractual rights of depositors.
Summary: 1. The petitioners sought premature closure of their recurring deposit accounts based on the unamended Rule 9A, which allowed closure after one year with reduced interest. The respondents argued that the amended rule, which disallowed premature closure, applied to existing accounts, citing a communication from the Ministry of Finance and an agreement by the petitioners to abide by government rules. 2. The single Judge found that the Government lacked power to make rules retrospectively under Section 15 of the Government Savings Bank Act. The petitioners' agreement to follow rules did not make the rules retrospective. Thus, the petitioners were granted the benefit of premature closure under the unamended rules applicable at the time of deposit. 3. The appellants contended that depositors must abide by amended rules, even if the account was opened under different rules, as per the contractual agreement. However, the Court held that the depositors were informed of the original terms and should not be bound by subsequent amendments unilaterally. 4. The Court emphasized that the source of rule-making power was Section 15 of the Act, which did not allow retrospective rules. The contractual nature of the relationship required fairness and reasonableness in rule changes, as established in previous judicial decisions. 5. The Court dismissed the appeal, stating that the amendment to Rule 9A was not retrospective, and it was improper to assume that existing accounts would be governed by the amended rule. The presumption was that amendments, except in procedural matters, operated prospectively.
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