Mandatory closure and payment procedures under the Monthly Income Scheme were breached, constituting deficiency in service and sustaining compensation.

The governing Monthly Income Scheme rules required premature closure only on the depositor's application, and the use of a withdrawal form could not substitute that mandatory step. On the facts, the postal authorities' premature closure of the accounts was contrary to the Rules and amounted to deficiency in service. The governing instructions also required payment by cheque where maturity proceeds exceeded the prescribed cash limit; cash payment on request was not shown to be a lawful exception. That deviation was likewise treated as service deficiency, and the compensation and consequential relief granted to the depositor were sustained.

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Issues: (i) Whether the postal authorities were justified in closing the Monthly Income Scheme accounts prematurely and making payment on the basis of withdrawal forms without an application by the depositor; (ii) Whether payment of the maturity value in cash, instead of by cheque, in excess of the prescribed limit amounted to deficiency in service and justified compensation.

Issue (i): Whether the postal authorities were justified in closing the Monthly Income Scheme accounts prematurely and making payment on the basis of withdrawal forms without an application by the depositor.

Analysis: Rule 5(2) of the Post Office (Monthly Income Account) Rules, 1987 prohibits withdrawal before maturity except as provided in Rule 10. Rule 10 permits premature closure only on an application by the depositor and authorises deduction from the deposit as prescribed. The record showed that the withdrawal form SB-7 was meant for withdrawal of interest from savings bank-linked accounts, not for premature closure of the Monthly Income Scheme accounts. No reliable material established any authorised practice permitting use of SB-7 as a substitute for the depositor's application for closure.

Conclusion: The premature closure of the accounts was not in accordance with the Rules and amounted to deficiency in service.

Issue (ii): Whether payment of the maturity value in cash, instead of by cheque, in excess of the prescribed limit amounted to deficiency in service and justified compensation.

Analysis: Clause (vii)(b) of Chapter 21 relating to Monthly Income Scheme and Clause 6 of Order No. 5-20/UP-06/2000 INV dated 28/29-08-2001 required payment by cheque where the amount exceeded the prescribed cash limit. The evidence did not support any lawful exception for paying the maturity proceeds in cash on request. The cash payment was therefore contrary to the governing instructions and was treated as an improper service deficiency causing loss and hardship to the depositor.

Conclusion: The cash payment was unauthorised and the direction granting compensation and consequential relief was upheld.

Final Conclusion: The writ petition failed, and the consumer forum and appellate commission's findings of deficiency in service, together with the relief granted to the complainant, were sustained.

Ratio Decidendi: Where the governing scheme requires a depositor's application for premature closure and prescribes cheque payment beyond the cash limit, deviation from those mandatory procedures constitutes deficiency in service.

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