Telangana High Court
B.N. Madhukar Rao vs Reserve Bank Of India on 5 August, 2025
THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH
AND
THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN
WRIT APPEAL No.1044 of 2024
JUDGMENT:
Mr. Hemanth Kumar, learned counsel representing
Ms. Kirthi Teja Kondaveeti, learned counsel for the appellant.
Mr. B.Nalin Kumar, learned Senior Counsel
representing M/s. N Legal Hyderabad, appearing for
respondent Nos.1 and 2.
2. Heard learned counsel for the parties.
3. Bereft of unnecessary details, the issue raised
before this Court in appeal by the aggrieved writ petitioner is
on the question of interest claimed beyond the maturity date
of the three Savings Bonds invested by his maternal aunt in
respect of which a Will was made in his favour by her before
death. After successfully fighting litigation, by virtue of the
order dated 28.06.2012 passed in W.A.No.425 of 2011, the
respondent-Reserve Bank of India (RBI) released the bond
amount in his favour. The three Bonds were to attain
maturity as on 09.12.2008, 04.01.2009 and 24.09.2008.
Undisputably, writ petitioner has lodged a claim for release
of the maturity amount in his favour before the maturity
date. The ensuing litigation led to some delay in release of
the maturity amount, which was finally released on
26.07.2012 with interest up to the date of maturity i.e.,
09.12.2008 and 04.01.2009 for 7% Bonds and 24.09.2008
for 6.5% Bond. Writ petitioner pursued the W.P.No.11616 of
2014 for payment of interest for the delayed period i.e., from
the date of maturity till the date of actual payment and
claimed a sum of Rs.24,97,659/- interest on delayed
payment as on the date of the filing of the writ petition. The
learned writ Court on this aspect held in the following
manner:
"13.Taking into consideration
i) The aforesaid facts and circumstances of the case
ii) Taking into consideration the restriction imposed under
Section 21 of the Government Securities Act, 2006
(No.38 of 2006) which clearly indicates that in terms of
a Government Security, no person shall be entitled to
claim interest on such security in respect of any period
which has elapsed after the earliest date on which
demand could have been made for the payment of
amount due on such security.
iii) Taking into consideration the remedy available to the
Petitioner under Section 23 of the Government
Securities Act, 2006 (No.38 of 2006) to approach the
Government to address the grievance of the Petitioner as
put-forth in the present writ petition.
iv) Taking into consideration the subject issue before this
Court relates to payment of post maturity interest in
respect of Government Securities governed by a Special
Law i.e., Government Securities Act, 2006, (No.38 of
2006) this Court opines that the Petitioner has no legal
right to claim post maturity interest and is not entitled
to any interest for post maturity period in respect of the
Savings Bonds in question, since there is no provision
for payment of post maturity interest in terms of the
Government of India Notifications dated 05.09.2002 and
13.03.2003 respectively and the petitioner admittedly
had not challenged the legality of the said notifications.
v) Taking into consideration the observations of the Apex
court in the judgment reported in (1977) 4 SCC 145,
dated 01.09.1977 in the Bihar Eastern Gangetic
Fishermen Co-operative Society Limited Vs. Sipahi
Singh & Others [(1977) 4 SCCC 145], this Court opines
that the Petitioner is not entitled for the relief as prayed
for in the present writ petition as per Sections 21 and
23 of the Government Securities Act, 2006 (No.38 of
2006), it is however observed that it is open for the
Petitioner to approach the Government under Section
23 of the Government Securities Act, 2006 (No. 38 of
2006) for grant of relief as prayed for in the present writ
petition, since admittedly the money of the Petitioner
was lying with the Respondent Bank from the date of
maturity till the date of release for a long time.
14. With these observations, the Writ Petition is disposed of.
However, there shall be no order as to costs."
4. It is not in dispute that the deposit and release of
investment bonds like the Savings Bonds in question with
the Government of India are governed by the Government
Securities Act, 2006 (hereinafter referred to as 'the Act of
2006'). The learned writ Court took into note the provisions
of the Act of 2006 in particular, Sections 21 and 23 thereof
and gave liberty to the writ petitioner to approach the
Government under Section 23 of the Act of 2006 for relief
while observing that admittedly, the money of the writ
petitioner was lying with the respondent-RBI from the date of
maturity till the date of release for a long time.
5. We have considered the submissions of learned
counsel for the appellant and learned Senior Counsel
appearing for the respondent-RBI.
6. On a careful scrutiny of the chronology of facts,
as has also been taken note of by the learned writ Court, and
the applicable statutory provisions, we are also in agreement
with the view expressed by the learned writ Court that
Section 21 of the Act of 2006 does not permit claim for
interest in respect of any period which has elapsed after the
earliest date i.e., the maturity date on which demand could
have been made for the payment of the amount due on such
security. Section 23 of the Act of 2006 is the only provision
which provides for exception for the Government to allow a
bona fide claim for payment of interest after the expiry of the
period of six years in cases where the holders of security
could not prefer their claims within the said period of six
years. Though the writ petitioner had made a claim before
the maturity date, but in his case, the amount could not be
released on account of the pending litigation. However, the
learned writ Court has granted liberty to the writ petitioner
to approach the Central Government for payment of interest
after the period of six years taking into note that admittedly,
the maturity amount could be released only after some delay
due to the pendency of the litigation. We, therefore, do not
find any reason to take a different view in the matter.
7. The Writ Appeal is, accordingly, disposed of.
However, there shall be no order as to costs.
Miscellaneous applications pending, if any, shall stand
closed.
______________________________________
APARESH KUMAR SINGH, CJ
______________________________________
G.M.MOHIUDDIN, J
Date: 05.08.2025
KL
