NAGAR PALIKA PARISHAD MANDLA Vs. UNION OF INDIA

JUDGEMENT

(1.) This is a complainant's appeal against order dated 22.8.1997 passed in Case No.18/93 by the District Consumer Disputes Redressal Forum, Camp Court, Mandla (for short the 'district Forum' ).

(2.) Facts giving rise to this appeal are thus : Appellant Municipal Council constituted under Sec.5, Madhya Pradesh Municipalities Act, 1961 purchased 20 National Savings Certificates of Rs.5,000/- each of the maturity date of 20.12.1991 and of maturity amount of Rs.2,00,000/-. On 5.12.1991 certificates were presented for payment of the maturity amount. The Postal Authorities did not make the payment of the maturity amount for the reason that the certificates under National Savings Certificates (VI-Issue) Rules, 1981 (for short the 'rules') could not have been issued to Corporations, Companies, Institutions or Firms. Rule 4 of the NSCs (VI/vii-Issue) Rules, 1981 applies to NSCs VI/vii which provides that NSCs VI/vii Issues can only be issued to an adult for himself or on behalf of minor or jointly to two adults. Therefore, the Postal Authorities informed that on the maturity amount the simple interest and not cumulative interest would be payable at the rate of Savings Bank Account rate or payment of simple interest. Appellant did not agree to that and filed a complaint, which was resisted. The District Forum after appreciation of evidence and documents dismissed the complaint holding that, it was mistake of law, therefore, the Postal Authorities were not deficient in service.

(3.) Learned Counsel for the appellant submitted that the approach of the District Forum with an erroneous approach held that the contract in view of Sections 20 and 21 of the Contract Act was void. Appellant is an Authority under Article 12 of the Constitution of India, which would not have purchased the certificates, which carry simple interest. In the case principle of promissory estoppel applies and the Postal Authorities were bound to pay the amount of interest as agreed. Counsel cited decisions of Supreme Court in case of Century Spinning and Manufacturing Company Ltd. and Anr. V/s. The Ulhasnagar Municipal Council and Anr., 1971 AIR(SC) 1021; The Gujarat State Financial Corporation V/s. M/s. Lotus Hotels Pvt. Ltd., 1983 AIR(SC) 848; M/s. D. Navinchandra and Co. , Bombay and Anr. V/s. Union of India and Ors., 1987 AIR(SC) 1794, and I. T. C. Ltd. V/s. George Joseph Fernandes and Anr., 1989 AIR(SC) 839.