Sawarmal Khemka and Sons HUF Vs the Union of India

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GAHC010024612025

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WP(C)/714/2025

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SAWARMAL KHEMKA AND SONS HUF REPRESENTED BY ITS KARTA SRI AMIT KHEMKA, AGE 48 YRS. S/O- SAWARMAL KHEMKA,

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HAVING ITS OFFICE ADDRESS AT M/S SENUA HARDWARE STORE, FANCY BAZAR, GUWAHATI-01, KAMRUP METRO, ASSAM

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VERSUS

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THE UNION OF INDIA

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MINISTRY OF COMMUNICATIONS, DEPARTMENT OF POSTS, GOVT OF INDIA, NEW DELHI-01

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2:THE CHIEF POSTMASTER GENERAL ASSAM CIRCLE MEGHDOOT BHAWAN 5TH FLOOR KACHARI PAN BAZAR GUWAHATI-01 KAMRUP METRO ASSAM

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3:THE POSTMASTER GPO MEGHDOOT BHAWAN KACHARI PAN BAZAAR GUWAHATI-01 KAMRUP METRO ASSAM

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4:THE SENIOR SUPERINTENDENT OF POST OFFICES DEPARTMENT OF POSTS INDIA

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GUWAHATI DIVISION GUWAHATI-01

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5:THE SENIOR POSTMASTER DEPARTMENT OF POSTS GUWAHATI GPO MEGHDOOT BHAWAN KACHARI PAN BAZAAR GUWAHATI-01 KAMRUP METRO ASSA

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Advocate for the Petitioner : MS. NAMRATA BARUAH, MR. MEHUL SHAH,M KABRA,MR. S AGARWAL,MR. A KABRA

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Advocate for the Respondent : DY.S.G.I., MR. B CHAKRAVARTY (C.G.C.)

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BEFORE

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HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI

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ORDER

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17.07.2026

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Heard Shri A. Kabra, learned counsel for the petitioner.Also heard Shri B. Chakraborty, learned CGC, representing the respondents.

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The instant application under Article 226 of the Constitution of India has been filed for the following relief:

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“A. It is therefore, prayed that your Lordships may be pleased to issue Rule, calling upon the respondents to show cause, as to why the impugned letter/communication dated 10/08/2024 and 23/10/2024 shall not be set aside and quashed after declaring that the same is illegal and void and why the petitioner shall not be entitled to a sum of Rs.33,33,217/- (Rupees Thirty Three Lakhs Thirty Three Thousand Two Hundred Seventeen) only, as was reflected in the petitioner's passbook as on 31.03.2022, alongwith further interest calculated at the rate as applicable in the PPF account and further interest for the period from the order of the Hon'ble Court thereafter till the date of

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payment, and after hearing the causes, that may be shown, the Rule may be made absolute and any other order/orders as your Lordships may deem fit and proper may also be passed.

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B. This Court may be pleased to accept and allow the petition filed by the petitioner and be further pleased to declare that the action of the respondents of denying the payment of interest over the amounts deposited by the petitioner from time to time is illegal, arbitrary and without authority of law and the same may be set aside.

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C. This court may be pleased to direct the respondents to calculate the amount of interest payable in the PPF account at the rates applicable during the period in question and allowed to other account-holders during the period in question and to make the payment to the petitioner accordingly.

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D. This Hon'ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ, order or direction quashing and setting aside the impugned letter/communication dated 10/08/2024 and 23/10/2024 issued by the Respondents.

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E. Pending disposal of this Application, the Court may be pleased to direct the Respondent Authorities to forthwith release the principal amount of Rs.17,40,000/-(Rupees Seventeen Lakhs Forty Thousand) only deposited by the Petitioner in the PPFaccount (Account ID No. 0057336275 and CIF ID 004438983.

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F. Ex parte ad interim relief in terms of prayer (E) may kindly be granted.

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G. The court may be pleased to direct the Respondent authorities to remit a sum of Rs.33,33,217/- (Rupees Thirty Three Lakhs Thirty Three Thousand Two Hundred Seventeen) only, as was reflected in the petitioner's passbook as on 31-03-2022, alongwith further interest calculated at the rate as applicable in the PPF account and further interest for the period from the order of the Hon'ble Court thereafter till the date of payment.

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H. Such further relief(s)/consequential reliefs as deemed fit and proper in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray.

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And for this Act of kindness, the Petitioner as in duty bound shall ever pray.”

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As per the facts projected, the petitioner is an HUF firm, represented by

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the Karta, which had opened a PPF account, being account ID No. 0057336275 and CIF ID No. 004438983 in the GPO Guwahati on 06.06.2005 for a period of 15 years which was to expire on 31.03.2021.The deposits were made every year which were also accepted and interest were shown to be accruing in the passbook/ account statement maintained by the petitioner with the GPO.On attaining the maturity date, a total amount of Rs.33,33,217/- (Rupees Thirty Three Lakhs Thirty Three Thousand Two Hundred Seventeen) onlywas shown to be standing to the credit of the petitioner.However, when the amount was demanded, the same was not paid to the petitioner on one pretext or the other.

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Ultimately, the petitioner had issued a legal notice on 22.07.2024 which however was replied on 10.08.2024 by informing that the account was irregular and no interest would be paid.Further correspondence by the petitioner had failed to impress upon the respondents to make the full paymentwith the interest andaccordingly, the present writ petition has been instituted.

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Shri Kabra, the learned counsel has submitted that the account was opened in the name of the HUF which is a legal entity on 06.08.2005 and deposits were made every year for a period of 15 years and such deposits were accepted without any complaint.He has also drawn the attention of this Court to the statement of accounts issued by the Postal Department which has reflected the interest component accruing from year to year, whereby the total amount of Rs.33,33,217/- (Rupees Thirty Three Lakhs Thirty Three Thousand Two Hundred Seventeen) only was reflected. He has submitted that from the correspondence exchanged, more particularly, the response to the legal notice would reflect that the respondents have taken support of an amendment made in May,2005 whereby PPF account in the name of HUF was discontinued.He has submitted

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that though the account was opened subsequent to such amendment, the authorities being fully aware had opened such account which was also followed by receipt of the yearly deposits for a period of long 15 years. Under such facts and circumstances, it would be wholly unreasonable to deny the interest upon this amount.

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In this connection, the learnedcounsel for the petitioner has relied upon a number of case law, including the case of M/S Bhagwati Vanaspati Traders vs. Senior Superintendent of Post Offices, Meerut reported in AIR 2015 SC 901 .In the said case, an NSC was opened in the name of a proprietorship firm and the interest component was refused on the ground of certain irregularities while opening such account. The Hon’ble Supreme Court had however held that because of such irregularities, the amount in question cannot be denied to the account holder. For ready reference, the relevant observations of the Hon’ble Supreme Court are abstracted herein below:

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“9. We find merit in the second contention advanced at the hands of the learned counsel for the appellant. It is indeed true, that the NSC was purchased in the name of M/s. Bhagwati Vanaspati Traders. It is also equally true, that M/s. Bhagwati Vanaspati Traders is a sole proprietorship concern of B.K. Garg, and as such, the irregularity committed while issuing the NSC in the name of M/s. Bhagwati Vanaspati Traders, could have easily been corrected by substituting the name of M/s. Bhagwati VanaspatiTraders with that of B.K. Garg. For, in a sole proprietorship concern an individual uses a fictional trade name, in place of his own name. The rigidity adopted by the authorities is clearly ununderstandable. The postal authorities having permitted M/s. Bhagwati Vanaspati Traders to purchase the NSC in the year 1995, could not have legitimately raised a challenge of irregularity after the maturity thereof in the year 2001, specially when the irregularity was curable. Legally, rule 17 of the Post Office Savings Bank General Rules, 1981, would apply only when an applicant is irreregularly allowed something more, than what is contemplated under a scheme. As for instance, if the scheme contemplates an interest of Y% and the certificate issued records the interest of Y+2% as payable on maturity, the certificate holder cannot be deprived of the interest as a whole, on account

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of the above irregularity. He can only be deprived of 2%, i.e., the excess amount, beyond the permissible interest, contemplated under the scheme. A certificate holder, would have an absolute right, in the above illustration, to claim interest at Y%, i.e., in consonance with the scheme, despite rule 17. Ordinarily, when the authorities have issued a certificate which they could not have issued, they cannot be allowed to enrich themselves, by retaining the deposit made. This may well be possible if the transaction is a sham or wholly illegal. Not so, if the irregularity is curable. In such circumstances, the postal authorities should devise means to regularize the irregularity, if possible.”

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Per contra, Shri Chakraborty, the learned CGC has submitted that the Department has never refused to pay the principal amount and the objection is only with regard to the interest component. He has submitted that vide the amendment dated13.05.2005, there is a clear stipulation that PPF account cannot be opened in the name of an HUF. By referring to the said amendment in the scheme termed as Public Provident Fund (Amendment)Scheme 2005, which hasbeen enclosed in the affidavit-in-opposition dated 21.04.2026, the learned CGC has submitted that the stand of the respondent cannot be faulted with. He has also reiterated that so far as the principal amount is concerned, being Rs.17,40,000/- (Rupees Seventeen Lakhs Forty Thousand) only the same is ready to be refunded to the petitioner.

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Shri Chakraborty, the learned counsel has also submitted that the issue would have been raised in a consumer forum and not in a writ court.

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The rival submissions have been duly considered and the materials placed before this Court have been carefully examined.

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At the outset, dealing with the preliminary objection on the aspect of maintainability, this Court is of the opinion that the jurisdiction exercised under Article 226 of the Constitution of India being plenary in nature and to secure the

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ends of justice, the facts of circumstances of the instant case would not, in the considered opinion oust the petitioner from invoking the writ jurisdiction.

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The projected defence, as revealed from the affidavit-in-opposition filed on 21.04.2026 is an amendment of the scheme made on 13.05.2005. Though the said scheme has omitted the expression HUF from the earlier scheme towards opening of PPF indicating that after the said notification, no PPF can be opened in the name of an HUF, it is not in dispute that a PPF account was indeed opened in the name of the petitioner HUF on 06.08.2005. While opening such account, the petitioner would not have any control and rather the respondents were the sole authorities which had consciously opened the account. The further fact is that for the following 15 years, yearly deposits were made coupled with the fact that in the statement of accounts, the interest was shown to be accruing.The dispute had arisen when there has been a refusal to pay the matured amount on expiry on fulfillment of the date of maturity which is 31.03.2021.

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While the respondents are relying upon the notification dated 13.05.2005, this Court is of the opinion that the account having been opened consciously even after such notification and the amount received every year from the HUF petitioner and interest also being reflected in the statement of accounts, the mere irregularity in opening the account and maintaining the same would not be a reasonable ground to deny the interest component to the petitioner. The Hon’ble Supreme Court in the aforesaid case of Bhagwati Vanaspati Traders (supra)had, in a similar circumstance concerning purchasing of NSC in the name of a proprietorship firm had directed payment of the interest component to the entity.

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This Court is of the opinion that in the present facts and circumstances, the respondents would not be justified in taking the defence of the notification dated 13.05.2005 to deny the legal entitlement of the petitioner. This Court is of the opinion that the petitioner would have otherwise been entitled to interest over the amount which had it been deposited in any Savings / Recurring Deposit Account

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The writ petitionaccordingly stands allowed by directing the respondents to pay the matured amount including the interest component to the petitioner within a period of 60 days from the date of receipt of a certified copy of this order.

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No order as to cost.

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JUDGE

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Comparing Assistant

Sawarmal Khemka and Sons HUF v. the Union of India

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Sawarmal Khemka and Sons HUF v. the Union of India

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