Savings certificate eligibility turns on the scheme as a whole: registered charitable trusts may invest and receive interest.

A public charitable trust was treated as a permissible investor under the Government Savings Certificates framework because the scheme was intended to promote savings and the rules had to be read consistently with that purpose. Rule 4(2)(vi) covered an association, institution or body registered under any law, and rule 5(iv) allowed such bodies, including those whose donations were exempt from income-tax, to invest within the prescribed limit. The exclusion of a charitable trust in one sub-clause did not disqualify it from the scheme as a whole. On that construction, the trust was entitled to purchase and encash the certificates and to receive interest.

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Issues: Whether a public charitable trust was entitled to purchase and encash 7-Year National Savings Certificates (II Issue) with interest under the Post Office Savings Certificates Rules, 1960.

Analysis: The scheme under the Government Savings Certificates Act, 1959 and the rules framed thereunder was intended to promote savings, and the rule-making power could not be construed so as to defeat that object. Rule 4(2)(vi) included an association, institution or body registered under any law, and rule 5(iv) expressly permitted such bodies, including those whose donations were exempt from income-tax, to invest up to the prescribed limit. The exclusion of a charitable trust in rule 5(iii) did not mean that such a trust was excluded from all parts of rule 5. On a proper reading of the scheme, the plaintiffs-trust fell within the class of permissible investors, and the refusal to pay interest was based on an erroneous construction of the rules.

Conclusion: The plaintiffs were entitled to receive the principal amount together with interest, and the challenge to the denial of interest failed.

Ratio Decidendi: Where the governing rules expressly permit registered institutions or bodies exempt from income-tax to invest in a savings scheme, an exclusion in one sub-clause cannot be used to deny eligibility altogether when the scheme as a whole otherwise authorises the investment.

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