Defective issue of savings certificates cannot defeat maturity payment where the public authority caused the irregularity and delayed release.

National Savings Certificates issued by postal authorities in a firm's name despite a statutory prohibition were not treated as void to defeat payment, because the irregularity arose from the department's own officers. The complainant remained entitled to the full maturity value. The wrongful issuance and subsequent withholding of payment also constituted deficiency in service, and the postal department was directed to pay interest at the Saving Bank Account rate from the date of maturity until actual payment. The complainant's relief was maintained, with post-maturity interest added.

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Issues: (i) Whether National Savings Certificates issued in the name of a firm in contravention of Rule 4 of the NSCs Vth Issue Rules, 1973 could be treated as void so as to deny the complainant the maturity amount; (ii) Whether the postal department was guilty of deficiency in service and whether interest at the Saving Bank Account rate was payable from the date of maturity till payment.

Issue (i): Whether National Savings Certificates issued in the name of a firm in contravention of Rule 4 of the NSCs Vth Issue Rules, 1973 could be treated as void so as to deny the complainant the maturity amount.

Analysis: The certificates were issued by the postal authorities despite the statutory restriction on issue to a firm. The defect arose from the department's own act in accepting and processing the request and issuing the certificates in the firm's name. Since the complainant had purchased the certificates through the department's officers and the instruments were allowed to be issued, the department could not avoid liability by relying on the very irregularity caused by its own officers.

Conclusion: The complainant was entitled to the full maturity value of the certificates, and the plea that the certificates were void did not succeed.

Issue (ii): Whether the postal department was guilty of deficiency in service and whether interest at the Saving Bank Account rate was payable from the date of maturity till payment.

Analysis: The wrongful issuance of the certificates in prohibited form constituted negligence on the part of the postal officials and amounted to deficiency in service. The complainant suffered loss after maturity because payment was withheld, and compensation had to reflect not only the maturity amount but also the delay in release. The appropriate measure adopted was interest at the rate applicable to a Saving Bank Account from the date of maturity until actual payment.

Conclusion: The postal department was held liable for deficiency in service, and interest at the Saving Bank Account rate from maturity until payment was directed to be paid.

Final Conclusion: The appeal failed, and the award in favour of the complainant was maintained with an additional direction for post-maturity interest.

Ratio Decidendi: A public authority that issues savings instruments in contravention of the governing rules cannot rely on that irregularity to deny payment where the defect is attributable to its own officers, and the delayed payment may attract interest for the period after maturity.

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