THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON'BLE SRI JUSTICE G. CHANDRAIAH W.P.No.20456 of 2006 ORDER: (Per Sri Justice Ghulam Mohammed) This writ petition is filed seeking a writ of certiorari to declare the orders, dated 28.02.2006 and 10.07.2006 passed in C.D.No.69 of 2005 and F.A.No.708 of 2006 by the District Consumer Forum, Warangal and Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad, respectively, as illegal and arbitrary and to set aside the same. 2. The brief facts of the case are that the first respondent’s School, as per the directions of the District Collector, Warangal, obtained five National Savings Certificates (for short ‘the certificates’) for the face value of Rs.10,000/- each on 22.03.1996 with the maturity value of Rs.20,150/-each on 22.03.2002, from the petitioner-post office. After the maturity date, when the first respondent approached the petitioner by surrendering the said certificates, it paid only the total face value of Rs.50,000/-without the accrued interest of Rs.50,750/- stating that the said certificates were issued irregularly as they cannot be issued in the name of the Institutions. Hence, the first respondent filed C.D.No.69 of 2005 on the file of the District Consumer Forum, Warangal, which in turn, allowed the same on 28.02.2006 directing the petitioner to pay a sum of Rs.50,000/- towards compensation to the first respondent for committing deficiency of service towards it and interest thereon at 6% per annum from 22.03.2002, the date on which the certificates were matured and till the date of deposit and also a sum of Rs.2,000/-towards costs of the litigation. Aggrieved by the same, the petitioner preferred appeal being F.A.No.708 of 2006 before the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad, which in turn, allowed the same in part on 10.07.2006 directing the petitioner to pay a sum of Rs.50,000/-towards compensation, but set aside the interest @ 6% per annum awarded by the District Forum and granted time for compliance of the said order within a period of six weeks. Challenging the same, the petitioner filed the present writ petition stating that the National Savings Certificate Rules came into force from 01.04.1995 i.e., before purchase of the said certificates by the first respondent and that as per the modified Rule 4 of N.S.C.VIII issue Rules, 1989 and Rule 13 of Post Office Savings Certificates Rules, 1960, the said certificates can be sold to the individuals only, but not to the Institutions and therefore, no interest can be paid to the first respondent. 3. Heard the learned Assistant Solicitor General for petitioner. 4. Learned counsel for the petitioner vehemently contended that both the Forums below erred in directing the petitioner to pay an amount of Rs.50,000/- towards compensation for committing deficiency of service though not granted interest accrued on the certificates. He has drawn the attention of this Court to the notification, dated 08.03.1995, as per which, Rule 4(2)(a) of the earlier Notification, dated 01.05.1989, was amended to the effect that a single holder type certificate may be issued to (1) an adult for himself or on behalf of a minor or to a minor, (ii) a trust and therefore, as the said certificates were issued on 22.03.1996 i.e., after 08.05.1995, the first respondent is not entitled to any interest or compensation on the said certificates. He has also drawn the attention of this Court to the judgment of the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad in C.C.No.23 of 2007 dated 10.11.2009, wherein it was held as under: “In the light of the decision of the Supreme Court i n The Post Master, Dargamitta, HPO, Nellore V. Ms. Raja Prameelamma ((1998) 9 SCC 706) in categorical terms, when the purchase itself is illegal and irregular the complainant is not entitled to the amount claimed. The rules are very clear and unambiguous. What is prohibited by the rules cannot be permitted by this Commission.” As regards the deficiency of service, the petitioner has further drawn the attention of this Court to the order, dated 01.05.1995, passed by the Apex Court in Special Leave Petition (civil) No.38 of 1995, wherein it was held as under: “As regards the contract, no doubt the sale of National Savings Certificates with the terms and conditions embodied thereon constitutes a contract between the Government of India as seller and the holders of the National Savings Certificates. But as this contract was contrary to the terms notified by the Government of India and this was due to inadvertence of the staff. In my opinion it does not become a contract binding the Government of India being unlawful and void. As such, this is not a case of deficiency in service contract as defined in Section 2(1)(g) of the Consumer Protection Act.” 5. As per the Notification, dated 01.05.1989, Rule 4 of the National Savings Certificates (VIII Issue) Rules, 1989, reads as under: “(1) the certificates shall be of the following types, namely:- (a) Single Holder Type Certificates; (b) Joint ‘A’ Type Certificates; and (c) Joint ‘B’ Type Certificates; (2) (a) A Single Holder Type Certificate may be issued to- (i) An adult for himself or on behalf of a minor or to a minor; (ii) a banking company excluding a Cooperative bank; (iii) a company; (iv) a Corporation; (v)an association, institution or a body registered as a society under any law for the time being in force excluding cooperative society; (vi) a firm; (vii) a local authority; (viii) a trust, (b) A Joint ‘A’ Type certificate may be issued jointly to two adults payable to both the holders jointly or to the survivor. (c) A joint ‘B’ Type certificate may be issued jointly to two adults payable to either of the holders or to the survivor. As on the date of the said Notification, the certificates were issued to the Institutions, but after 08.03.1995, on which date, the amendment was made, they cannot be issued in the name of the Institutions. The said amendment reads as under: 2. In the National Savings Certificates (VIII Issue) Rules, 1989, (a) in rule 2, under the heading ‘Definitions’, the Clauses(ii),(v) and (vii) shall be deleted. (b) In rule 4, under the heading Types of Certificates and issue thereof’-for clause (a) of sub rule (2), the following shall be substituted, namely:- (c) (a) A single Holder Type Certificate may be issued to:- (d) (i) an adult for himself or on behalf of a minor or to a minor, (e) (ii) a trust.” In the instant case, as the certificates were issued to the first respondent on 22.03.1996 i.e., after the amendment, the petitioner objected for payment of the interest accrued on those certificates since it is contrary to the Rules. 6. Admittedly, both the Forums below held that the first respondent is not entitled to earn any interest accrued on the said certificates, but, because of the acts of the petitioner in causing loss to the first respondent in not paying the interest accrued on the certificates though the certificates were issued contrary to the Rules, it will amount to deficiency of service and imposed on the petitioner to pay a sum of Rs.50,000/- towards compensation. Section 2(1)(g) of the Consumer Protection Act, 1986, gave definition to the word ‘deficiency’ which is as under: “’deficiency’ means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service”. 7. Inasmuch as the Apex Court in Special Leave Petition (civil) No.38 of 1995 dated 01.05.1995 held that as the contract was contrary to the terms notified by the Government of India and was due to inadvertence of the staff, it does not become a contract and this is not a case of deficiency in service contract as defined in Section 2(1)(g) of the Act, we are of the opinion that there is no deficiency of service on the part of the petitioner. When there is no such deficiency of service, the question of payment of compensation for a sum of Rs.50,000/-, as awarded by both the Forums below, does not arise. 8. In view of the aforesaid reasons, the Writ Petition is allowed setting aside the orders impugned. No order as to costs. _____________________ GHULAM MOHAMMED, J _________________ G. CHANDRAIAH, J Date:27.07.2010. sj