No deficiency in service where savings deposits were closed without interest under the governing postal savings rules.

Postal authorities were not liable for deficiency in service where deposits were accepted in contravention of the savings rules. The scheme under Section 15 of the Government Savings Banks Act, 1873, and Rule 17 of the Post Office Savings Bank General Rules, 1981, allowed closure of an improperly opened account and refund of the deposit without interest. Rule 16 applied only to incorrect opening under the wrong category where conversion could be considered if eligibility existed. As the deposits were made after institutional investment had been discontinued, refusal to pay interest complied with the governing rules and did not amount to deficiency in service under the Consumer Protection Act, 1986.

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Issues: Whether the postal authorities were guilty of deficiency in service for refusing interest on deposits accepted from an institution in contravention of the governing savings rules, and whether the depositor was entitled to interest.

Analysis: The governing scheme, framed under Section 15 of the Government Savings Banks Act, 1873, permitted closure and refund without interest where an account had been opened in contravention of the applicable rules. Rule 17 of the Post Office Savings Bank General Rules, 1981 expressly authorised closure of such an account and refund of the deposit without interest, while Rule 16 dealt with cases of incorrect opening under a wrong category where conversion could be considered only if eligibility existed. The deposits were made after the date from which institutional investment under the scheme had been discontinued, and the communication issued by the postal authorities required closure without interest. In these circumstances, refusal to pay interest was in accordance with the rules and could not amount to deficiency in service within Section 2(1)(g) of the Consumer Protection Act, 1986.

Conclusion: No deficiency in service was made out, and the claim for interest was not sustainable.

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