Deficient issuance of savings certificates to ineligible purchasers attracted restitution, interest, and compensation for official negligence.

Postal officials issued National Savings Certificates to ineligible purchasers despite the restrictions in Rule 7 of the National Savings Certificates (6th Issue) Rules, 1961. Failure to scrutinise the application forms and reject ineligible requests at the issue stage constituted negligence and deficiency in service. Because the certificates were issued through the department's own mistake, the department remained liable at maturity and could not avoid restitution by relying on the purchasers' ineligibility. The complainants were entitled to interest for the period their money remained blocked, together with compensation for inconvenience and loss, and the relief was modified accordingly.

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Issues: Whether the postal department was liable in deficiency in service for issuing National Savings Certificates in the name of ineligible purchasers, and what relief the complainants were entitled to on maturity.

Analysis: The certificates were issued by the postal officials despite the restrictions in Rule 7 of the National Savings Certificates (6th Issue) Rules, 1961. The failure to scrutinise the application forms and reject ineligible requests at the time of issue constituted negligence on the part of the department. Since the certificates had been wrongly issued through official action, the department could not avoid liability at maturity merely by relying on the rule of ineligibility. The complainants were therefore entitled to restitutionary relief, together with interest for the period during which their money remained blocked, and compensation for the inconvenience and loss caused by the departmental lapse.

Conclusion: The postal department was held liable for deficiency in service, and the complainants were awarded savings bank rate interest from the date of issue of the certificates up to the filing of the complaint, along with compensation, with the District Forum's order modified accordingly.

Final Conclusion: The appeals succeeded only to the extent of modification of relief, while the finding of departmental liability and the grant of monetary relief to the complainants were maintained.

Ratio Decidendi: Where a public authority issues a savings instrument to an ineligible purchaser through its own negligence, it commits deficiency in service and remains liable to restore the monetary loss and reasonable compensation.

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