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“  REPORTABLE”   

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4854 OF 2009

M/s. Bhagwati Vanaspati Traders …. Appellant

versus

Senior Superintendent of Post Offices, Meerut …. Respondent

J U D G M E N T

Jagdish Singh Khehar, J.

1. M/s. Bhagwati Vanaspati Traders, the appellant before us, is a proprietorship  

concern.  Mr. B.K. Garg is its sole proprietor.  On 28.4.1995, M/s. Bhagwati Vanaspati  

Traders purchased one, six years’ National Savings Certificate (hereinafter referred to  

as, NSC) bearing number 6NS/06DD 387742, by investing a sum of Rs.5,000/-.  The  

above NSC was to mature on 28.4.2001.  The maturity amount payable on 28.4.2001  

was Rs.10,075/-.

2. Since  M/s.  Bhagwati  Vanaspati  Traders  was  not  paid  the  amount  due  on  

maturity,  B.K.  Garg  made  repeated  visits  to  the  office  from where  the  NSC was  

purchased.  He was informed, that an NSC could only be issued in the name of an  

individual, and that, the NSC taken in the name of M/s. Bhagwati Vanaspati Traders,  

was not valid.  He was also informed, that the matter had been referred for advice to  

the Post Master General, Bareilly, and that, the question of payment of the maturity  

amount would be considered only after the receipt of inputs from Bareilly.  Having  

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waited for a substantial length of time, and realizing that no further action had been  

taken at the hands of the respondent, B.K. Garg visited the office of the Post Master  

General, Bareilly.  At Bareilly he was informed, that the matter had been referred to  

the Director General (Post), Department of Posts, New Delhi, and that, he would have  

to await  the decision of the Director General  (Post).   Having waited long enough,  

without any fruitful result, M/s. Bhagwati Vanaspati Traders preferred Complaint Case  

no.  513 of  2004 before the District  Consumer Disputes Redressal  Forum,  Meerut  

(hereinafter referred to as, the District Forum).  The District Forum, by its order dated  

1.2.2007 accepted the claim of M/s. Bhagwati Vanaspati  Traders, and accordingly,  

directed the respondent to pay the maturity amount of Rs.10,075/- with 12% interest,  

from the date of maturity till the date of payment.  The respondent was additionally  

directed to pay, a sum of Rs.5,000/- as compensation, and also cost of Rs.2,000/-, to  

the appellant proprietorship concern.

3. Dissatisfied  with  the order  dated  1.2.2007,  passed by  the  District  Forum in  

favour  of  the  appellant,  the  respondent  Senior  Superintendent  of  Post  Offices,  

Meerut,  preferred  Appeal  no.  460  of  2007  before  the  State  Consumer  Disputes  

Redressal Commission, Lucknow.  The aforestated appeal was allowed by the State  

Commission vide its order dated 21.1.2008.  The appellant concern then preferred  

Revision Petition no. 1456 of 2008 before the National Consumer Disputes Redressal  

Commission, New Delhi.  The National Commission dismissed the revision petition,  

vide the impugned order dated 4.9.2008.  The special leave to appeal preferred by  

the appellant, against the impugned order dated 4.9.2008, was granted by this Court  

on 27.7.2009.

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4. A perusal of the orders passed by the State Commission, as also, the National  

Commission  reveals,  that  the  same  were  premised  on  the  fact,  that  the  NSC  

purchased by M/s. Bhagwati Vanaspati Traders, had an irregularity, inasmuch as, an  

NSC could only be purchased by an individual, and the same could not be issued in  

the  name of  a  concern,  firm,  institution,  banking  institution  or  company  etc.   On  

account of the aforesaid irregularity, the respondent placed reliance on rule 17 of the  

Post Office Savings Bank General Rules, 1981.  The above rule is being extracted  

hereunder:-

“17. Account opened in contravention of rules:- Subject to the provision of rule  16, where an account is found to have been opened in contravention of any  relevant rule for the time being in force and applicable to the account kept in the  Post Office Savings Bank, the relevant Head Savings Bank may, at any time,  cause the account to be closed and the deposits made in the account refunded  to the depositor without interest.”

In addition to the above, the respondent had placed reliance on a decision rendered  

by this Court in Post Master, Dargamitta HPO, Nellor v. Raja Prameeelamma, (1998)  

9 SCC 706, wherein this Court had held as under:-

“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 either in terms of the law or in  terms of the contract as defined in Section 2(1)(g) of the Consumer Protection  Act, 1986.”

(emphasis is ours)

During the course of hearing, learned counsel for the respondent, in addition to the  

judgment extracted hereinabove, placed reliance on a recent decision rendered by  

this  Court  in  Arulmighu  Dhandayadhapaniswamy  Thirukoil,  Palani,  Tamil  Nadu  v.  

Director General of Post Offices, Department of Posts & Ors., (2011) 13 SCC 220,  

and drew our attention to the following conclusions recorded therein;-

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“18. This Court in Raja Prameeelamma case, (1998) 9 SCC 706, held that  even  though  the  certificates  contained  the  terms  of  contract  between  the  Government of India and the holders of the National Savings Certificate, the  terms in the contract were contrary to the Notification and therefore the terms of  contract being unlawful and void were not binding on the Government of India  and as such the Government refusing to pay interest at the rate mentioned in  the Certificate is not a case of deficiency in service either in terms of law or in  terms of contract as defined under Section 2(1)(g) of the Consumer Protection  Act, 1986. The above said decision is squarely applicable to the case on hand. 19. It is true that when the Appellant deposited a huge amount with the third  Respondent from 5.5.1995 to 16.8.1995 under the Scheme for a period of five  years, it was but proper on the part of the Post Master to have taken a note of  the  correct  Scheme  applicable  to  the  deposit.  It  was  also  possible  for  the  Postmaster  to  have  ascertained  from  the  records,  could  have  applied  the  correct  Scheme and if the Appellant, being an institution, was not eligible to  avail the Scheme and advised them properly. Though Mr. S. Aravindh, learned  Counsel for the Appellant requested this Court to direct the third     Respondent to    pay some reasonable amount for his lapse, inasmuch as such direction would  go contrary to the Rules and payment of interest is prohibited for such Scheme  in terms of Rule 17, we are not inclined to accept the same.  ”   

(emphasis is ours)

Based on the decision of this Court relied upon by the State Commission, as also, the  

National  Commission  in  the  impugned  orders  dated  21.1.2008  and  4.9.2008  

respectively,  as  also,  the  latest  judgment  rendered  by  this  Court  in  Arulmighu  

Dhandayadhapaniswamy Thirukoil case (supra), it was the emphatic contention of the  

learned counsel  for  the respondent,  that  there  was no question  of  release of  the  

maturity amount to the appellant.   

5. It was also the contention of the learned counsel for the respondent, that the  

mistake at  the hands of  the postal  authorities was innocent.   After the appellant’s  

claim was examined, a preliminary enquiry disclosed, that the NSC was issued to  

M/s. Bhagwati Vanaspati Traders by Ved Bahadur Singh (an employee of the postal  

department).  A departmental proceeding was held against the above employee, and  

he was duly punished.  Accordingly it was sought to be asserted, that it was not as if,   

the postal authorities were intentionally depriving the appellant of the benefits of the  

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NSC purchased by him on 28.4.1995.  The deprivation of the appellant, according to  

learned  counsel,  was  based  on  a  pure  determination  of  the  legal  rights  of  the  

appellant.

6. The  first  contention  advanced  at  the  hands  of  the  learned  counsel  for  the  

appellant was based on the decision rendered by this Court in Tata Iron & Steel Co.  

Ltd. v. Union of India & Ors., (2001) 2 SCC 41, wherefrom learned counsel invited our  

attention to the following observations:-

“20. Estoppel  by  conduct  in  modern  times  stands  elucidated  with  the  decisions of the English Courts in Pickard v. Sears, 1837 6 Ad. & El. 469, and  its gradual elaboration until placement of its true principles by the Privy Council  in the case of  Sarat Chunder Dey v.  Gopal  Chunder Laha, (1891-92) 19 IA  203, whereas earlier Lord Esher in the case of Seton Laing Co. v. Lafone, 1887  19 Q.B.D. 68, evolved three basic elements of the doctrine of Estoppel to wit:

“Firstly, where a man makes a fraudulent misrepresentation and another  man acts upon it to its true detriment: Secondly, another may be where a  man  makes  a  false  statement  negligently  though  without  fraud  and  another person acts upon it:  And thirdly,  there may be circumstances  under  which,  where  a  misrepresentation  is  made  without  fraud  and  without negligence, there may be an Estoppel.”

Lord Shand, however, was pleased to add one further element to the effect that  there may be statements made, which have induced other party to do that from  which  otherwise  he  would  have  abstained  and  which  cannot  properly  be  characterized as misrepresentation. In this context, reference may be made to  the decisions of the High Court of Australia in the case of Craine v. Colonial  Mutual Fire Insurance Co. Ltd., 1920 28 C.L.R. 305. Dixon, J. in his judgment in  Grundt  v.  The  Great  Boulder  Pty.  Gold  Mines  Pty.  Ltd., 1938  59  C.L.R.  641, stated that:  

"In measuring the detriment, or demonstrating its existence, one does not  compare the position of the representee, before and after acting upon the  representation,  upon  the  assumption  that  the  representation  is  to  be  regarded as true, the question of estoppel does not arise. It is only when  the  representor  wished  to  disavow  the  assumption  contained  in  his  representation that an estoppel arises, and the question of detriment is  considered, accordingly, in the light of the position which the representee  would be in if the representor were allowed to disavow the truth of the  representation."

(In this context see Spencer Bower and Turner: Estoppel by Representation,  3rd Ed.). Lord Denning also in the case of Central Newbury Car Auctions Ltd. v.  Unity Finance Ltd., 1956 (3) All ER 905, appears to have subscribed to the view  of Lord Dixon, J. pertaining to the test of 'detriment' to the effect as to whether it  

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appears unjust or unequitable that the representator should now be allowed to  resile from his representation, having regard to what the representee has done  or refrained from doing in reliance on the representation,  in short,  the party  asserting the estoppel must have been induced to act to his detriment. So long  as the assumption is adhered to, the party who altered the situation upon the  faith of it cannot complain. His complaint is that when afterwards the other party  makes a different state of affairs, the basis of an assertion of right against him  then,  if  it  is  allowed,  his  own  original  change  of  position  will  operate  as  a  detriment, (vide Grundts: High Court of Australia (supra)). 21. Phipson on  Evidence (Fourteenth  Edn.)  has  the  following  to  state  as  regards estoppels by conduct.

“Estoppels by conduct, or, as they are still sometimes called, estoppels  by matter in pais, were anciently acts of notoriety not less solemn and  formal  than  the  execution  of  a  deed,  such  as  livery  of  seisin,  entry,  acceptance of an estate and the like, and whether a party had or had not  concurred in an act of this sort was deemed a matter which there could  be no difficulty in ascertaining, and then the legal consequences followed  (Lyon v.  Reed, (1844) 13 M & W 285 (at  p.  309).   The doctrine has,  however, in modern times, been extended so as to embrace practically  any act  or  statement  by a party  which it  would  be unconscionable  to  permit him to deny.  The rule has been authoritatively stated as follows:  ‘Where one by his words or conduct willfully causes another to believe  the existence of a certain state of things and induces him to act on that  belief so as to alter this own previous position, the former is concluded  from averring against the latter a different state of things as existing at  the same time.’ (Pickard v. Sears (supra)).   And whatever a man's real  intention may be, he is deemed to act willfully ‘if he so conducts himself  that  a  reasonable  man  would  take  the  representation  to  be  true  and  believe  that  it  was  meant  that  he  should  act  upon  it.’   (Freeman  v.  Cooke, 1848 (2) Exch. 654: at p. 663).

Where  the  conduct  is  negligent  or  consists  wholly  of  omission,  there must be a duty to the person misled (Mercantile Bank v. Central  Bank, 1938  AC  287  at  p.  304, and  National  Westminster  Bank  v.  Barclays Bank International, 1975 Q.B.  654).   This  principle  sits  oddly  with  the  rest  of  the  law  of  estoppel,  but  it  appears  to  have  been  reaffirmed, at least by implication, by the House of Lords comparatively  recently  (Moorgate  Mercantile  Co.  Ltd.  v.  Twitchings, (1977)  AC 890).   The explanation is no doubt that this aspect of estoppel is properly to be  considered a part of the law relating to negligent representations, rather  than estoppel properly so-called.  If two people with the same source of  information assert the same truth or agree to assert the same falsehood  at  the same time,  neither  can be estopped as against  the other  from  asserting differently at another time (Square v. Square, 1935 P. 120).”

22. A  bare  perusal  of  the  same  would  go  to  show  that  the  issue  of  an  estoppel by conduct can only be said to be available in the event of there being  a precise and unambiguous representation and on that score a further question  arises  as  to  whether  there  was  any  unequivocal  assurance  prompting  the  

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assured to alter  his position or  status. The contextual  facts  however,  depict  otherwise.  Annexure 2 to the application form for  benefit  of  price protection  contains an undertaking to the following effect:-

“We hereby undertake to refund to EEPC Rs… the amount paid to us in  full or part thereof against our application for price protection.  In terms of  our  application  dated  against  exports  made  during...  In  case  any  particular  declaration/certificate  furnished  by  us  against  our  above  referred to claims are found to be incorrect  or any excess payment is  determine to have been made due to oversight/wrong calculation etc. at  any time.  We also undertake to  refund the amount  within  10 days of  receipt  of  the  notice  asking  for  the  refund,  failing  which  the  amount  erroneously paid or paid in excess shall be recovered from or adjusted  against any other claim for export benefits by EEPC or by the licensing  authorities of CCI & C.”

and it is on this score it may be noted that in the event of there being a specific   undertaking  to refund for  any  amount erroneously  paid  or  paid  in  excess (emphasis supplied), question of there being any estoppel in our view  would not arise. In this context correspondence exchanged between the parties  are rather significant. In particular letter dated 30.11.1990 from the Assistant  Development  Commissioner  for  Iron  &  Steel  and  the  reply  thereto  dated  8.3.1991 which unmistakably record the factum of non-payment of JPC price.”

(emphasis is ours)

Based on the aforesaid observations it was the emphatic contention of the learned  

counsel  for  the  appellant,  that  the  rule  of  estoppel  would  come to  the aid  of  the  

appellant, inasmuch as, the appellant having been consciously permitted to purchase  

the NSC, could not be denied the benefit of the maturity amount by asserting, that  

there was some irregularity in the purchase of the NSC.

7. It is not possible for us to accept the applicability of the principle of estoppel in  

the facts and circumstances of this case.  No representation is ever shown to have  

been made to the appellant.  It was the appellant’s individual decision to purchase the  

NSC.  It is not shown, that a fraudulent representation was made to the appellant.  It   

is also not shown, that a false statement was negligently made to the appellant.  The  

rule  of  estoppel,  in  the  present  case,  could  have  only  been  premised  on  some  

conduct of the respondent, which had willfully induced the appellant to invest in the  

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NSC.  Unfortunately, for the appellant, no such willful conduct has been brought to  

our notice.   Having given our thoughtful  consideration to the instant aspect of  the  

matter,  we  feel  that  this  case  would  be  governed  by  the  proposition  evolved  in  

Moorgate  Mercantile  Co.  Ltd.  v.  Twitchings, (1977)  AC  890,  namely,  where  two  

people with the same source of information assert the same truth or agree to assert  

the same falsehood at the same time, neither can be estopped against  the other.  

Therefore,  whilst  it  cannot  be disputed,  that  the authorities issuing the NSC were  

required to ensure, that the same was issued to only such persons who were eligible  

in  law  to  purchase  the  same,  yet  in  terms  of  the  mandate  of  rule  17  extracted  

hereinabove, the vires whereof is not subject matter of challenge, it is not possible for  

us  to  accept,  that  the rule  of  estoppel  could  be relied upon at  the behest  of  the  

appellant, for any fruitful benefit.

8. To  overcome  the  mandate  of  rule  17  extracted  hereinabove,  as  also,  the  

decision  rendered  by  this  Court  in  Raja  Prameeelamma  case  (supra),  and  the  

proposition  of  law  declared  in  Arulmighu  Dhandayadhapaniswamy  Thirukoil  case  

(supra), learned counsel for the appellant placed emphatic reliance on the decision of  

this Court in Ashok Transport Agency v. Awadhesh Kumar & another., (1998) 5 SCC  

567.  He invited our attention to the following observations recorded therein:-

“6. A  partnership  firm  differs  from  a  proprietary  concern  owned  by  an  individual. A partnership is governed by the provisions of the Indian Partnership  Act, 1932. Though a partnership is not a juristic person but Order XXX Rule 1  CPC enables the partners of a partnership firm to sue or to be sued in the  name of the firm. A proprietary concern is only the business name in which the  proprietor  of  the  business  carries  on  the  business.  A  suit  by  or  against  a  proprietary concern is by or against the proprietor of the business. In the event  of  the  death  of  the  proprietor  of  a  proprietary  concern,  it  is  the  legal  representatives of the proprietor who alone can sue or be sued in respect of the  dealings of the proprietary business. The provisions of Rule 10 of Order XXX  which make applicable the provisions of Order XXX to a proprietary concern,  

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enable  the  proprietor  of  a  proprietary  business  to  be  sued  in  the  business  names  of  his  proprietary  concern.  The real  party  who is  being  sued is  the  proprietor of the said business. The said provision does not have the effect of  converting the proprietary business into a partnership firm. The provisions of  Rule 4 of Order XXX have no application to such a suit as by virtue of Order  XXX Rule 10 the other provisions of Order XXX are applicable to a suit against   the  proprietor  of  proprietary  business  "insofar  as  the  nature  of  such  case  permits".  This means that only those provisions of Order XXX can be made  applicable to proprietary concern which can be so made applicable keeping in  view the nature of the case.”

(emphasis is ours)

Based on the observations recorded in the aforesaid judgment, the second contention  

advanced by the learned counsel for the appellant was, that in sum and substance, a  

sole proprietorship concern allows the fictional use of a trade name on behalf of an  

individual.  It was contended, that truthfully only one individual is the owner of a sole  

proprietorship concern.  As such, according to learned counsel, the name of the sole  

proprietorship concern, can again be substituted with the name of the sole proprietor.  

If that is allowed, the NSC purchased by the appellant would strictly conform to the  

mandate of law.  According to learned counsel, it makes no difference whether the  

individual’s name, or the proprietorship’s name is recorded while purchasing an NSC.  

It was pointed out, that if the respondent was not agreeable in accepting the trade  

name, the respondent ought to have corrected the NSC by substituting the name of  

M/s. Bhagwati Vanaspati Traders with that of its sole proprietor, namely, B.K. Garg.

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  

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Vanaspati Traders 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 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.   

10. It is not possible for us to deny relief to the appellant, based on the judgments  

rendered  by  this  Court  in  Raja  Prameeelamma  case  (supra)  and  Arulmighu  

Dhandayadhapaniswamy Thirukoil case (supra), in view of the fact that, the matter  

was never examined in the perspective determined by us hereinabove.  In neither of  

the two judgments, the amendment of the NSC was sought.  The instant proposition  

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of  law,  was also not  projected on behalf  of  the certificate holders,  in  the manner  

expressed above.

11. There was seriously no difficulty at all  in the facts and circumstances of the  

present case, to regularize the defect pointed out, because M/s. Bhagwati Vanaspati  

Traders,  is  admittedly  the  sole  proprietorship  concern  of  B.K.  Garg.   The  postal  

authorities  should  have solicited  the  change  of  the  name in  the  NSC,  through  a  

representation by B.K. Garg himself.  On receipt of such a representation, the alleged  

irregularity would have been cured, and the beneficiary of the deposit, would have  

legitimately reaped the fruits thereof.  Rather than adopting the above simple course,  

the postal authorities chose to strictly and rigidly interpret the terms of the scheme.  

This  resulted  in  the  denial  of  the  legitimate  claims  of  the  sole  proprietor  of  the  

appellant concern, i.e., B.K. Garg, of the investment made by him.  In the above view  

of the matter, we consider it just and appropriate, in exercise of our jurisdiction under  

Article 142 of the Constitution of India, to direct the Senior Superintendent of Post  

Offices, Meerut, to correct the NSC issued in the name of M/s. Bhagwati Vanaspati  

Traders, by substituting the appellant’s name, with that of B.K. Garg.   

12. The  irregularity  having  been  cured,  we  hope  that  B.K.  Garg  will  now  be  

released all the payments due to him, in terms of the order passed by the District  

Forum.  The respondent  is accordingly  directed to pay to B.K. Garg,  the maturity  

amount of Rs.10,075/- with 12% interest, from the date of maturity, till  the date of  

payment.  He would be entitled to Rs.5,000/- towards compensation, as was awarded  

to him by the District Forum.  In addition, we consider it just and appropriate to award  

him litigation costs of  Rs.10,000/-.   The entire  amount  aforementioned,  should be  

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released to B.K. Garg, the sole proprietor of M/s. Bhagwati Vanaspati Traders, within  

one month from the date of receipt of a certified copy of this judgment.   

13. The instant appeal is allowed in the aforesaid terms.

…………………………….J.  (Jagdish Singh Khehar)

…………………………….J.  (C. Nagappan)

New Delhi; October 10, 2014.

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ITEM NO.1A               COURT NO.6               SECTION XVII                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal  No(s).  4854/2009 M/S.BHAGWATI VANASPATI TRADERS                     Appellant(s)                                 VERSUS SR.SUPERIN.OF POST OFFICE,MEERUT                   Respondent(s) [HEARD BY HON'BLE JAGDISH SINGH KHEHAR AND HON'BLE C.NAGAPPAN, JJ.] Date : 10/10/2014 This appeal was called on for Judgment today.

For Appellant(s) Mr. V. K. Monga,Adv.(Not present)                       For Respondent(s) Mr. Kamal Mohan Gupta,Adv.(Not present)                       

Hon'ble Mr. Justice Jagdish Singh Khehar pronounced the  judgment  of  the  Bench  comprising  his  Lordship  and  Hon'ble  Mr.  Justice C. Nagappan.

For the reasons recorded in the Reportable judgment, which  is placed on the file, the appeal is allowed.

(Parveen Kr. Chawla) (Phoolan Wati Arora)     Court Master  Assistant Registrar

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