Madras High Court
S.Sankaran vs Sub Post Master on 22 May, 2025
Author: D.Bharatha Chakravarthy
Bench: D. Bharatha Chakravarthy
2025:MHC:1196
W.P.No.4508 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders reserved on : 30.04.2025
Orders pronounced on : 22.05.2025
CORAM :
THE HON'BLE MR.JUSTICE D. BHARATHA CHAKRAVARTHY
W.P.No.4508 of 2023
S.Sankaran .. Petitioner
Versus
Sub Post Master
RA Puram,
Chennai - 600 028. .. Respondent
Prayer : Writ Petition filed under Article 226 of the Constitution of India
praying for a Writ of Certiorarifed Mandamus calling for the records
impugned letter, dated 04.03.2021 bearing No./528/RAP/dlgs/20-21, dated
@ Rap Chennai - 600 028 and the impugned letter, dated 20.03.2021
bearing No./572/RAP/dlgs/20-21 dated @ Rap Chennai - 600 028 issued by
the respondent and quash the same and consequentially direct the respondent
to pay the petitioner an amount equivalent to the interest for the period
commencing from 21.02.2017 till the date of payment towards the
1/18
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W.P.No.4508 of 2023
petitioner's Public Provident Fund Account bearing No.1782471163.
For Petitioner : Mrs.Ashwini Vaidialingam
For Respondent : Mr.AR.L.Sundaresan,
Additional Solicitor General of India,
Asstd. by Mr.K.Gangadaran,
Central Government Standing Counsel
ORDER
This Writ Petition is filed for the issuance of a Certiorarified
Mandamus to call for the records relating to the impugned orders dated
04.03.2021 and 20.03.2021, to quash them, and consequently direct the
respondent to pay the petitioner an amount equivalent to the interest for the
period commencing from 21.02.2017 until the date of payment towards the
petitioner's Public Provident Fund Account bearing No.1782471163.
2. The case of the petitioner is that he is a senior citizen, now aged 79
years. He is also the Kartha of a Hindu undivided family. He was
originally residing in Ernakulam, and from the year 2000, he began making
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deposits under various schemes, including the Public Provident Fund
Scheme. On 02.05.2000, he opened an account for the HUF bearing
No.1001 at the Ernakulam Girinagar Post Office. Until 19.01.2012, he
continued making several deposits. In 2012, the petitioner relocated to
Chennai, and the said accounts were transferred from the Ernakulam
Girinagar Post Office to RA Puram Post Office, Chennai, in a new PPF
Account No.1782471163. Thereafter, the petitioner continued to make
deposits. The balance amount credited to the PPF account as of 31.03.2016
was Rs.4,84,119/-. This amount of deposit was renewed for a period of 5
years from 21.02.2017. The petitioner also made deposits on several dates
up to 02.07.2020, totalling Rs.10,45,119/-. As of 31.03.2020, the interest
that remained payable on these sums was Rs.2,33,781/-.
3. While so, on 07.12.2020, the petitioner received a telephone call to
come to the Post Office. He was directed to close the account with
immediate effect and was informed that if he did not close it, it would be
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difficult for him to subsequently obtain even the principal sum. Therefore,
the said account was closed on 08.12.2020, and the petitioner was paid only
the principal amount of Rs.10,45,119/- alone. The due interest amounts,
namely the interest for the period between 21.02.2017 and 31.03.2020,
totaling Rs.2,33,781/-, and the interest amount of Rs.59,658/- between
01.04.2020 and 08.12.2020, were never paid to the petitioner. The
petitioner, therefore, made representations on 09.12.2020 and 10.02.2021.
4. On 04.03.2021, the impugned order stated that the petitioner's
grievance was rejected in accordance with the existing rules, as no SB rate
of interest is applicable. Subsequently, the petitioner was informed that the
PPF for HUF accounts had been stopped in the year 2005. When a legal
notice was issued to the petitioner, the second impugned order, dated
10.02.2021, was passed, stating that according to Rule 112 of the POSB
(CBS) Manual Volume, the SB rate of interest is not applicable in the case
of the petitioner. Therefore, the petitioner has filed the present Writ
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Petition.
5. This Writ Petition is opposed by the respondent through a detailed
counter-affidavit. The details of the deposits are accepted. It is stated in
paragraph No.5 that according to SB Order No.23/2010, dated 13.12.2010,
PPF HUF accounts, opened prior to 13.05.2005, cannot be extended after
maturity, and no further deposits can be accepted in such accounts after
maturity. The irregularity was noted via the Savings Bank Control
Organization Objection Memo, dated 14.09.2020, in which the respondent
was requested to reconcile the extension of the PPF HUF account. To settle
the objection, the irregular interest that accrued, amounting to Rs.2,33,782/-,
was debited from the PPF HUF account, and the account was closed on
08.12.2020. The eligible balance deposits were paid to the petitioner. The
interest, as claimed, is not payable, and the Writ Petition is liable to be
dismissed.
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6. Ms.Ashwini Vaidialingam, the learned Counsel for the petitioner,
submits that the petitioner has been making continuous deposits between
2016 and 2020. Suddenly, when the irregularity above was reported and the
deposits were closed, interest was not paid to the petitioner, now aged 79.
According to her, Rule 112 of the POSB (CBS) Manual states that PPF
accounts opened in the name of HUF prior to 13.05.2005 will be closed
upon maturity on 31st March of the 16th financial year. Regarding the
accounts not closed, it indicates that they would be closed by 31.03.2011,
after which no interest is admissible. The same cannot be applied to the
present case, where the renewal was accepted even in the year 2017.
7. Further, concerning the reliance placed on Rule 24(4) of the
Government Savings Promotion General Rules, 2018, she would submit that
the entire Rule 24(4) pertains to the inter se liability of the Accounts Office
vis-à-vis the concerned Government Savings Bank. A reading of Rule 24(4)
and 24(5) clearly indicates that, in such cases, the interest should be borne
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by the concerned Government Savings Bank. The learned Counsel would
argue that the matter is no longer res integra and has been repeatedly
considered by this Court and other High Courts in the following judgments,
where it has been held that the interest is to be paid:-
(i) The judgment of this Court in R.Velayutham Vs. The Chief
Postmaster General, Chennai - 2 and Ors., reported in 2014 SCC OnLine
Mad 6481;
(ii) The judgment of the High Court of Delhi in Balkrishan Malhotra
Vs. Department of Post and Ors., reported in 2019 SCC OnLine Del 9249;
(iii) The judgment of the High Court of Calcutta in Murari Kedia
Huf and Anr. Vs. Postmaster, Barabazar Post Office and Anr., reported in
2023 SCC OnLine Cal 2103;
(iv) The order of the High Court of Karnataka in K.Shankarlal Vs.
The Postmaster, in W.P.No.2042 of 2023.
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8. Per contra, Mr. AR.L. Sundaresan, the learned Additional Solicitor
General of India, would first rely upon the SB Order No. 23/2010, wherein it
is stated as follows:
•PPF accounts opened in the name of HUF prior to
13.5.2005 will be closed on maturity i.e 31st March of the
16th Financial Year from the year in which account was
opened. No further interest will be admissible.
•PPF accounts opened in the name of HUF prior to
13.5.2005 but have already been matured but not yet
closed, shall be closed on 31st March 2011 after which no
further interest shall be admissible.
9. He would thereafter rely on Rule 112 of the POSB (CBS) Manual,
which reads as follows:
"112. Withdrawal when account is extended with
deposits:- When account is extended within 1 year of
maturity by submitting Form-H, the depositor can make
one withdrawal in a financial year limited to Max. 60% of
the balance at credit at the time of extension of account.
This limit of withdrawal will apply on commencement of
every extension of block period of 5 years.
Note:- PPF accounts opened in the name of HUF prior to
13.5.2005 will be closed on maturity i.e 31st March of
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16th financial year from the year in which the account was
opened. PPF (HUF) accounts opened prior to 13.5.2005
but have already matured but not yet closed shall be closed
by 31.3.2011 after which no interest shall be admissible."
10. Further reliance was placed on Rule 24(4) of the Government
Savings Promotion General Rules, and the entire Rule 24 is extracted
hereunder for ready reference:
"24. Responsibility of Accounts Office.- (1) The
Accounts Office shall be responsible for;
(a)opening of Accounts, accepting deposits, making
payments, closing and transferring accounts under these
rules and maintaining records thereof;
(b)providing services and facilities to the depositor as
provided in these rules as well as in the provisions of the
Savings Schemes.
(2) The Accounts Officer shall furnish such data, reports,
information, documents and evidence as may be required,
and facilitate inspection of records, as may be deemed
necessary in relation to any account by the Central
Government.
(3) The Accounts Officer shall create adequate
technological infrastructure to carry out the provisions of
these rules and those of various savings schemes, and to
promote digital transactions by the depositors.
(4) If at any stage it is found that an account has been
opened, or a deposit made, in contravention of the rules,
the Accounts Office shall close the account forthwith and
refund the amount deposited without any interest
(5) In case of any loss caused or liability incurred to the
Government on account of non Implementation or wrong
implementation of the provisions of the Act or any of the
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rules made thereunder, the Government Savings Bank
concerned shall be liable to bear the entire liability which
may so arise.
(6) The responsibility shall not vest with the Accounts
Office under the following circumstances; namely:-
(a)for any fraudulent withdrawal by a person by obtaining
possession of a passbook or savings certificate or the
cheque book while in the custody of the depositor, and
where the Accounts Office has applied all due diligence
and caution while making such payment.
(b)for any act, whatsoever, committed by a person or
agent duly authorised by the depositor to act on his behalf
with respect to the operation of an account.
(c)for any action taken in good faith by the
Authorised Officer of the Accounts Office."
11. The learned Additional Solicitor General of India would then rely
on the following judgments to contend that interest is not payable:
S.No. Case Citation Proposition
1 Suganmal Vs. State of AIR 1965 SC Supreme Court of India
Madhya Pradesh and 1740 held that a writ of
Ors. mandamus under
Article 226 of the
Constitution is not
ordinarily maintainable
solely for the purpose of
seeking a refund of
money illegally
collected as tax. The
proposition is that a
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party seeking such a
refund must typically
pursue a civil suit,
rather than a writ
petition, for such relief.
2 Union of India (UOI) (1998) 3 SCC The Supreme Court
and Ors. Vs. Orient 501 addressed the issue of a
Enterprises and Ors. company’s right to
claim interest on a
redemption fine paid for
imported goods that
were later found to be
permissible under
international standards.
The judgment,
therefore, clarified that
the state cannot be
compelled to pay
interest on a refund of
redemption fine when
the original adjudication
order is overturned.
3 Arulmighu (2011) 13 SCC In essence, the
Dhandayudhapaniswam 220 proposition of the
y Thirukoil, Palani, judgment is that Rule 17
Tamil Nadu through its of the relevant post
Joint Commissioner Vs. office rules governs the
Director General of payment of interest on
Post Offices, deposits, and in this
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Department of Posts specific case, the
and Ors. respondents (including
the postmaster) were
not deficient in their
service as they acted in
accordance with the
rules.
4 Commissioner of (2014) 1 SCC In the facts of that case,
Income Tax, Gujarat 126 the Hon'ble Supreme
Vs. Gujarat Fluoro Court of India had
Chemicals come to the conclusion
that there was an
inordinate delay on the
part of the Revenue in
refunding certain
amount which included
the statutory interest
and therefore, directed
the Revenue to pay
compensation for the
same not an interest on
interest.
12. I have considered the rival submissions made on either side and
reviewed the material records of the case.
13. Firstly, it can be seen that SB Order No.23/2010 is an order passed
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by the Government of India, addressed to all heads of circles/regions and the
Additional Director General, APS, New Delhi. It altered the scheme
regarding PPF accounts opened in the name of HUF prior to 13.05.2005.
These accounts should be closed upon maturity on the 31st of March of the
16th Financial Year; in any event, those that remain open shall be closed by
31.03.2011, after which no further interest will be admissible. Thus, it
follows that the rule is that after 15 years, the PPF HUF account cannot be
further renewed and must be closed. In the case of the petitioner, the
account was opened in 2002 and therefore should have been closed in 2017.
The No Interest clause contained in the aforementioned SB Order is
applicable to the PPF account that has matured due to the order issued on
13.12.2010. Therefore, this clause cannot be invoked regarding the denial of
interest to the petitioner. It is reproduced in Rule 112 of the Manual.
14. Regarding Rule 24(4), which is relied upon, as rightly stated by
the learned Counsel for the petitioner, it mentions that the Accounts Office
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will close the account and refund the amount deposited without any interest.
However, it specifies that any liability incurred to the Government due to the
non-implementation or incorrect implementation of the provisions of the Act
or the Rules shall be borne entirely by the concerned Government Savings
Bank. In this case, since the Rule has already been established through SB
Order No.23/2010, even in 2017, the renewal was incorrectly accepted by
the relevant savings bank, namely the Post Office, Raja Annamalai Puram,
Chennai. Therefore, the respondents must bear the liability.
15. As a matter of fact, the very question is no longer res integra, as
this Court in R.Velayutham (cited supra) held, under identical facts and
circumstances, in paragraph No. 8 as follows:-
"8. From the averments made in the counter affidavit, it is
seen that the extension of the deposit has been admitted
and the interest credited has also been admitted. Now, the
respondents seek to deny payment of interest by referring
to Rule 17 of the said rules. The respondents did not on
their own volition take any action, but the action appears
to have been taken pursuant to the audit inspection
conducted in January-February 2012. Therefore, until such
time, the account was in operation and deposits were
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accepted and interest was periodically credited. From the
documents filed in the typed set of papers, more
particularly the copy of the passbook, it is evidently clear
that the respondents have credited interest. In such
circumstances, to deny payment of interest to the
petitioner on the deposits, which was in the hands of the
respondents, by referring to a rule and an audit report is
arbitrary."
16. As a matter of fact, all the other rulings referred to by the learned
Counsel for the petitioner reiterate the same legal position. In view thereof,
even if the respondent wrongfully resorted to renewing/extending the time
of the PPF HUF, the resultant burden incurred by way of interest is to be
borne solely by the respondent. Furthermore, as already held by this Court
in R.Velayutham (cited supra), the amount was held by the respondent.
Therefore, in any event, they are liable to pay the interest for the period
claimed by the petitioner.
17. In view thereof, this Writ Petition stands allowed. The respondent
is directed to pay a sum of Rs.2,93,439/-, which represents the interest on
the deposits up to the date of closure, i.e., 08.12.2020, within a period of
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eight weeks from the date of receipt of a copy of this order. If the said sum
is not paid within this period, it shall incur further interest at the rate of 6%
per annum from 08.12.2020 until the date of disbursement. There shall be
no order as to costs.
22.05.2025
Neutral Citation : yes
grs
To
The Sub Post Master,
RA Puram,
Chennai - 600 028.
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D.BHARATHA CHAKRAVARTHY, J.
grs
22.05.2025
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