2013(7) ALL MR 823
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(PANAJI BENCH)

A.P. LAVANDE AND U.V. BAKRE, JJ.

Mormugao Municipal Council Vs. Union Of India & Ors.

Writ Petition No. 177 of 2012

8th May, 2012

Petitioner Counsel: Mr. S.D. Padiyar
Respondent Counsel: Mr. M. Amonkar

Constitution of India, Art.226 - Kisan Vikas Patra (KVP) Scheme - Investment by Municipal Council - Non-payment of maturity amount on ground that petitioner was not entitled to invest in KVPs and since certificates were irregularly issued, they were required to be regularized - Held, when the amount of investment was accepted by respondents without bringing it to the notice of petitioner Municipal Council that it cannot invest in KVPs, payment of maturity amount cannot be denied - If the petitioner was intimated of irregularity in the beginning itself, it would have invested the amount in any other scheme - Petitioner entitled to maturity amount along with interest - Cost of Rs. 5000/- also directed to be paid as the petitioner was required to contest legitimate claim for considerable period.

AIR 2003 Bom. 452, AIR 2007 Guj. 72. Rel.on. [Para 11,15]

Cases Cited:
Romeo Sam Arambhan Vs. Union of India and ors., AIR 2003 Bom. 452 [Para 6,10]
Mulund Ambe Maiya Co-op. Hsg. Society Ltd. Vs. Union of India and ors., W.P. No.3392/2004, Dt.9/10/2006 [Para 6,9]
Mahila Sewa Sahakari Bank Ltd. Vs. Chief Post Master and 2 ors., AIR 2007 Guj. 72 [Para 6,11]
Chiloda Seva Sahakari Mandli Ltd. Vs. Sub Post Master & ors., Special Civil Application No.3249/2007, Dt.5/12/2008 [Para 6,12]
Poonithura Service Cooperative Bank Ltd.. Vs. The Post Master and ors., WP(C) No.202000/2010(Y), Dt.13/8/2010 [Para 6]


JUDGMENT

A.P. LAVANDE, J. :- Heard Mr. Padiyar, learned Counsel for the petitioner and Mr. Amonkar, learned Central Government Standing Counsel for the respondents. Rule. By consent heard forthwith.

2. By this petition, the petitioner seeks the following reliefs :

"a) For writ of mandamus and/or any other appropriate writ, order or direction in the nature of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India commanding and directing the respondents to release and pay to the Petitioner total maturity amount of Rs.12,00,000/- (Rupees twelve lakhs only) on the Kisan Vikas Patra certificates under certificate Nos. 99CC348491 to 99CC348550 of Rs.10,000/- each, Registration No.9572 dated 15/04/2002 at Annexure A-1 (colly).

b) For interest at the rate of 18% per annum on the total maturity amount of Rs.12,00,000/- (Rupees twelve lakhs only) on the Kisan Vikas Patra certificates under certificate Nos. 99CC348491 to 99CC348550 of Rs.10,000/- each, Registration No.9572 dated 15/04/2002 at Annexure A-1 (colly) from the date of their maturity till its actual payment and/or realization."

3. Briefly, the case of the petitioner is as follows :

The petitioner is a Municipal Council, established and incorporated under the Goa Municipalities Act, 1968. On 15.4.2002, the petitioner invested a sum of Rs. 6,00,000/- (Rupees six lakhs only), with the respondents in fixed deposit scheme "Kisan Vikas Patra" ("KVP" for short) under certificate Nos. 99CC348491 to 99CC348550 of Rs.10,000/- each. Upon maturity, the respondents were bound to pay an amount of Rs.12,00,000/- (Rupees twelve lakhs only) to the petitioner. On 14th December, 2009, the petitioner wrote a letter to respondent No.3, asking him to pay the amount of Rs.12,00,000/- to the petitioner. By letter dated 17th December, 2009, respondent No.3 informed the petitioner that the letter of the petitioner was forwarded to respondent No.2 for further necessary action. The petitioner, thereafter, sent a reminder dated 29th December, 2009 with a copy to respondent No.2. On 7th January, 2010, the petitioner requested respondent No.3 for closing balance certificate of the aforesaid KVP certificates, as the same was required for audit purpose.

Thereafter, on 28th October, 2010, the petitioner addressed letter to respondent No.3, calling upon him to make payment of Rs.12.00 lakhs, along with interest, within 15 days. The petitioner received a letter dated 22.11.2010 from respondent No.2 informing the petitioner that KVP certificates had been irregularly issued and were required to be regularised on submission of proposal for regularising, provided the petitioner is ready to accept the maturity amount at simple interest at the rate of 3.5%. The petitioner, therefore, through its Advocate addressed notice dated 5th February, 2011, calling upon the respondents to make payment of Rs.12.00 lakhs, with interest at the rate of 18% per annum, from the date of maturity i.e. 15th December, 2009, till actual payment of the maturity amount, within fifteen days from the receipt of the notice. Respondent No.2, through his Advocate sent reply dated 11th March, 2011, reiterating that the investment was irregular and further claimed that the petitioner was also equally responsible for irregular investment as it had failed to obtain the opinion of the finance advisor. It was further stated that respondent No.2 was unable to take any steps unless and until the petitioner submitted the proposal for regularisation of the investment in KVP, undertaking and related documents, so as to facilitate the settlement of the payment. Thereafter, the petitioner filed the present petition, seeking the above reliefs.

4. On 19th March, 2012, this Court directed the respondents to deposit the maturity amount with simple interest at the rate of 3.5 % p.a., from the date of maturity, in this Court, within four weeks, without prejudice to the rights and contentions of both sides. Pursuant to the said order, an amount of Rs.12,95,047/- (Rupees twelve lakhs ninety five thousand, forty seven only) has been deposited by the respondents.

5. An affidavit has been filed by respondent No.2, in which it has been stated that the investment made by the petitioner in KVP was discontinued as per letter dated 9th March, 1995 and, as such, the certificates were irregularly issued to the petitioner and, therefore, the Postmaster, Vasco-Da-Gama had not effected the payment of maturity value to the petitioner. It has been further stated that the maturity amount of Rs.12.00 lakhs could not be paid to the petitioner in contravention of the Rules and the petitioner was requested to submit a proposal for regularisation of the investment made in KVP and for acceptance of maturity amount at the simple interest at the rate of 3.5% p.a. It has been further stated that since the investment was made in contravention of the Rules, the same had to be regularised by the concerned Authority.

6. Mr. Padiyar, learned Counsel appearing for the petitioner submitted that the respondents are bound to effect the payment of maturity value of the KVP certificates i.e. Rs.12.00 lakhs, along with reasonable interest thereon and the respondents are not entitled to contend that the investment made by the petitioner was irregular and in contravention of the Rules. Mr. Padiyar further submitted that the respondents having accepted the amount of Rs.6,00,000/- for investment in KVP, are not entitled now to contend that the investment made is irregular and that the petitioner is only entitled to simple interest at the rate of 3.5% p.a. on the amount invested i.e. Rs.6,00,000/-. Mr. Padiyar further submitted that the issue involved in the present petition is squarely covered in favour of the petitioner by several judgments of different High Courts. Mr. Padiyar placed reliance upon the following judgments :

(1) Romeo Sam Arambhan vs. Union of India and ors., AIR 2003 Bom. 452;

(2) Unreported Judgment dated 9th October, 2006, passed by this Court in Mulund Ambe Maiya Co-op. Hsg. Society Ltd., vs. Union of India and ors., (Writ Petition No.3392 of 2004);

(3) Mahila Sewa Sahakari Bank Ltd., vs. Chief Post Master and 2 ors., AIR 2007 Guj. 72;

(4) Unreported Judgment dated 5th December, 2008 passed by Gujarat High Court in Chiloda Seva Sahakari Mandli Ltd., vs. Sub Post Master & ors., (Special Civil Application No.3249 of 2007);

(5) Unreported Judgment dated 13th August, 2010 passed by Kerala High Court in Poonithura Service Cooperative Bank Ltd.. vs. The Post Master and ors. (WP(C) No.202000 of 2010(Y)).

7. Mr. Amonkar, learned Counsel appearing for the respondents fairly conceded that in view of the Judgments of several High Courts, including this Court, the petitioner is entitled to the maturity amount i.e. Rs.12.00 lakhs. Mr. Amonkar further submitted that the respondents may not be saddled with any liability by way of interest on the said amount and the amount deposited by the respondents be paid to the petitioner.

8. We have carefully considered the submissions made by Shri Padiyar appearing for the petitioner and perused the Judgments relied upon.

9. In our considered view, the issue involved in the present petition is squarely covered against the respondents. In the case of Mulund Ambe Maiya Co-op. Hsg. Society Ltd., vs. Union of India and ors. (supra), the Division Bench of this Court was dealing with a case in which the Co-operative Society had deposited with the respondents monies in KVP in 1992 and 1993 and the amount was reinvested in the KVP in the year 1998. The Division Bench held that the respondents could not enrich themselves at the cost of the citizen who invested monies in their scheme and was not informed on that date or subsequently till the amount matured, that amount could not be invested. The Division Bench further held that the petitioner, like other depositors, would be entitled to the same interest which the respondents were giving to the individuals. Accordingly, the Division Bench directed the respondents to release the maturity amount, after the petitioner deposits the certificate duly endorsed to the Prothonotary and Senior Master who, in turn, was directed to hand over to the respondents before the amount deposited was paid.

10. In the case of Romeo Sam Arambhan (supra), the Division Bench of this Court was dealing with the investment made by the petitioner in Six Years National Savings Certificates, VIII issue. The certificates matured on 18th July, 2001 and the respondents refused to make payment after the petitioner presented the certificates, after making discharge endorsement on the reverse. The Division Bench held that even if there was some irregularity in issuance of the certificates, the same was surely due to fault of respondent No.3 and it was not open to the Postal authorities not to pay to the holder the amount of certificates. The Division Bench further held that by compelling the respondents to carry out the promise under the certificates issued to the petitioner, no injustice would be caused to the respondents, nor can such compliance be inequitable or unjust. Rather, the petitioner would suffer great hardship if he is deprived of the interest which has legitimately accrued to him on the investment made by him by purchase of National Savings Certificates and gross inequity would occasion. The Division Bench directed the respondents to pay the promised sum within one month, failing which the respondents would be held liable to pay interest at the rate of 6% p.a. on the principal amount of investment under the Certificates from the date of maturity till payment was made.

11. In the case of Mahila Sewa Sahakari Bank Ltd (supra), the learned Single Judge of Gujarat High Court made a reference to a Division Bench Judgment delivered by Gujarat High Court in Letters Patent Appeal No. 1509 of 2004, in which the Division Bench had observed that though there were specific rules for purchasing KVPs under which the appellant-Society would not be entitled to purchase KVP, the fact remains that the respondents, without informing or bringing it to the notice of the appellant-Society accepted the said amount in 1997 and only in the year 2002, after lapse of almost 5 and half years when the appellant-Society applied for renewal, the appellant-Society was told that neither the said amount could be renewed, nor it can get the amount with interest on it on its maturity date. The Division Bench therein held that if the appellant was told in 1997, it would have invested the amount in any other nationalised saving scheme. The Division Bench further held that having accepted the said amount from the appellant, without bringing to its notice that it was not entitled to purchase KVP, it would not lie in the mouth of respondent authority to say that the appellant-Society was not entitled for interest of KVP. It was further held that the principle of unjust enrichment would apply to the Government and its agencies. The respondents could not take the stand that it would not pay the interest, after having retained the amount of Rs.30,000/- for a period of more than 5 years. The Division Bench directed the respondents to pay principal amount of KVPs purchased by the petitioner with interest at the bank rate prevailing at the relevant time, from the date it became payable till the date of realisation.

12. Similar view was taken by the Division Bench of Gujarat High Court in the case of Chiloda Seva Sahakari Mandli Ltd. (supra), in respect of investment in KVPs by the petitioner, which was a Society. The learned Single Judge of Kerala High Court while dealing with the investment by Co-operative Society in KVPs, also took the same view.

13. Thus, this Court, as well as High Courts of Gujarat and Kerala have taken a consistent view that if the investment made by a body or a society in KVPs or National Savings Certificate is irregular, payment of maturity amount cannot be denied to such an authority or body on the ground that the same would amount to unjust enrichment and also on the ground that it would be unjust and inequitable to deprive the society/body from getting interest which it would have got had the amount invested in any nationalised savings scheme. We are in respectful agreement with the view taken by the Division Bench of this Court, as well as by the Division Bench of Gujarat High Court, as also by the learned Single Judge of Kerala High Court. Therefore, the petitioner is entitled to the maturity amount.

14. As stated above, pursuant to the order dated 19th March, 2012, the respondents have deposited an amount of Rs. 12,95,047/- (Rupees twelve lakhs ninety five thousand, forty seven only) in this court. In our considered opinion, it would be just and proper to permit the petitioner to withdraw the said amount, subject to the petitioner handing over the certificates duly endorsed to Registrar (Judicial). Accordingly, Registrar (Judicial) is directed to pay the amount of Rs.12,95,047/- (Rupees twelve lakhs ninety five thousand, forty seven only) to the petitioner, upon petitioner handing over the KVPs duly endorsed to the Registrar (Judicial) who, in turn, shall hand over the same to the respondents before the amount deposited is paid to the petitioner.

15. Considering that the respondents have contested the legitimate claim of the petitioner for considerable period and the fact that in reply to the notice issued by the petitioner through its Advocate, respondent No.2 chose to contest the claim of the petitioner by sending reply through his Advocate and also considering that even after filing of the petition, the same was opposed by filing an affidavit in reply, we deem it appropriate to impose costs in favour of the petitioner, which are quantified at Rs.5,000/- (Rupees five thousand only). The respondents shall pay the costs of Rs.5,000/- to the petitioner within a period of 12 weeks.

16. Rule is made absolute in the aforesaid terms.

Petition allowed.