Thursday, 12 January 2012

Post office in dock for being indifferent

Subject: A joint deposit cannot be treated as an individual deposit after the death of one of the joint holders. Post office indicted for refusing to pay interest to account holder. 

Backdrop: There are several instances of government officials being indifferent to consumers but the extent to which harassment is meted out to the consumer is shocking. 

Case Study: Yogesh Vachharajan, who was working in the Bombay Port Trust, had opened two joint accounts with the post office under the 
Monthly Income Scheme (MIS). One investment was of Rs 4,20,000, where he was the first account holder with his wife Geeta being the joint holder. The second investment was of Rs 1,80,000, where his wife Geeta was the first account holder and he was the joint holder. 

After opening the account, during the subsistence of the deposit scheme, Yogesh expired. Geeta then approached the postal authorities to make the necessary changes but was advised that it was not necessary as the deposits were payable to either or survivor. She was told to intimate about the death at the time of maturity of the deposits. 

On maturity of the deposits, Geeta was told by the authorities that the investment limit under the scheme was Rs 3 lakh for individual deposits and Rs 6 lakh for joint deposits. At the time of investment, the amount was within the prescribed limits for a joint deposit. However, in view of the subsequent death of her husband, the deposits would have to be treated as individual deposits. Considering the aggregate value of the two deposits as Rs 6,00,000 (Rs 4,20,000 + Rs 1,80,000 ), she was told that she had violated the rules, which prescribed a limit of Rs 3 lakh for individual deposits. Hence for committing a breach of the rules, the bonus would not be paid, the interest paid on the excess deposit would be recovered, and in addition a penalty would be levied, which would be adjusted and deducted from the maturity value of the deposits. 

An aggrieved Geeta filed a complaint before the Mumbai Suburban District Forum. The postal authorities contested the complaint and placed the relevant rules on record. Advocates Hitesh Buch and Shailesh More, who represented Geeta, pointed out rule 20, which provides that when the death of a joint holder is reported, the post master has to instruct the surviving depositor to withdraw the amount that is in excess of the prescribed limit for deposits in single name. Hence, it was the responsibility of postal department to ask Geeta, as the surviving depositor, to withdraw the amount in excess . Yet, the authorities had failed to advise her and had misguided her that no changes were needed. 

In a judgment dated December 2, 2011- delivered by president of the forum, JL Deshpande, on behalf of the Bench comprising himself and Bidnurkar, the forum noted that the postal authorities had not disputed the fact that Geeta had approached them and that such advice had been given. Also, while other rules were printed in the passbook, the rule 20 was not printed. Accordingly, the forum held that the postal department was guilty of deficiency in service. The total deductions made amounted to Rs 1,67,870 but during the proceedings before the forum the postal authorities refunded the penal interest of Rs 46,670. Accordingly, the forum directed the postal authorities to pay the balance amount of Rs 1,21,200, along with the interest at the rate of 9%, and Rs 5,000 as costs. 

Impact: The postal authorities who deal with deposits on a day-to-day basis are expected to have proper and better knowledge than the common man. It is expected that they give correct guidance. Yet, due to their apathy, it is the consumer who needlessly suffers. This judgment should hopefully make the authorities realize that they too have certain duties and responsibilities.