Bhaskaran, J. 1. The respondents in O.P. No. 11095 of 2000 are the appellants in the appeal. The petitioners were having deposits in the post office under the recurring deposit scheme. They opened their accounts on different dates prior to the amendment of Rule 9A of the Post Office Recurring Deposit Rules, 1981. As per the unamended Rules, the holder of an account could prematurely close the account after one year from the date of opening of the account provided that interest at the rate of Post Office Savings Account shall alone be payable on premature closure of the account. Rule 9A was amended by Notification dated 4-11-1999. By this amendment, the facility of premature closure was taken away. Therefore, the petitioners filed the original petition for the issuance of direction to the respondents to allow the petitioners to have premature closure of the recurring deposits maintained by them with the third respondent as allowed in unamended Rule 9A of the Post Office Recurring Deposit Rules, 1981.
2. The respondents in the original petition filed a counter-affidavit stating that it is the amended Rule 9A that is applicable to the deposits made by the petitioners. They also relied on a communication by the Ministry of Finance informing that the amended Rule will apply to Recurring Deposit Accounts which are already in existence on the date of Notification. They further relied on Ext. R2(b), wherein the petitioners have agreed that they would abide by the Rules framed by the Central Government from time to time. It is their further case that the petitioners have no vested right and that it is only a contractual right.
3. The learned single Judge has found that Section 15 of the Government Savings Bank Act, under which the Recurring Deposit Rules are made does not give the Government the power to make Rules retrospectively. The amendment also does not say that the Rules have been made with retrospective effect. All amendments are presumed to be only of prospective operation. Retrospectivity has to be made explicit. The learned single Judge also found that the undertaking in the application form to abide by the Rules in force from time to time also will not help the Department since the Rules are not made retrospective. In view of the above reasoning, the learned single Judge allowed the original petition and held that the petitioners are entitled to have the benefit of the closure of the accounts prematurely on the basis of the unamended Rules which were applicable at the time when the deposit was made.
4. The learned Central Government Standing Counsel for the appellants submitted that Section 15 of the Act gives power to the Central Government to make Rules for carrying out the purpose of the Act. It is also contended that the statutory form for receiving deposits provide for an undertaking that the deposit holders would agree to abide by the Rules framed by the Central Government from time to time. It is the case of the appellants that once the Rules are amended, the depositors are prevented from closing the account prematurely even though at the time when they started the account the, Rule was that they could close the account after one year. It is further contended that the savings Bank account is operated on the basis of a contract executed between the parties and in the contract there is a clause requiring the depositors to abide by the Rules in force from time to time. Their further contention is that where the intention of the amendment is to impose new burdens or to impair the existing obligations, the deposit holders cannot escape from the liability created to such amendments especially when they have undertaken to abide by the Rules in force from time to time. It is further contended that inasmuch as the petitioners have not challenged Section 15 of the Act and they have not challenged the validity of Rule 9A as amended, the petitioners are not entitled to succeed in the original petition.
5. We do not think that the Union of India and the Chief Post Master General are right in stating that the petitioners are governed by the amended Rule 9A when the contract for deposit was made when the unamended Rule was in force. At the time when the deposits were started, the petitioners were told that they were free to close the account after one year for which the only liability was the reduction in the rate of interest which will be only at the rate of post office savings Bank account. If the petitioners were told that they can close the accounts only after the entire period of the scheme is over, they might not have joined the scheme. They can as well deposit the money in the ordinary savings Bank account of the post office or in some other Bank. Having made the petitioners to deposit the amounts with the above-said condition, it is not permissible for the appellants to deny the benefit of premature closing on the presumption that the amended Rules are intended to have effect for deposits which were already commenced prior to the amended Rules. Even according to the Central Government Standing Counsel, it is only a contractual liability and merely because the appellants have got the power to amend the Rules unilaterally, it cannot be presumed that such amendments should affect, without anything more, the existing accounts started under the unamended Rules.
6. As already noticed by the learned single Judge, the source of the Rule making power is Section 15 of the Government Savings Bank Act. It does not give any power to make Rules with retrospective effect. The amendment also does not show that they are made with retrospective effect. Since the appellants case is that the relationship between the parties is contractual in nature, we have to consider whether they can act arbitrarily affecting the rights of the parties. In Mahabir Auto Stores v. Indian Oil Corporation, (1990) 3 SCC 752 : (AIR 1990 SC 1031), Sabyasachi Mukharji, C. J., held that "even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealings as in the present case."
7. Inasmuch as the amendment to the Rule is not made retrospective, it is not necessary to consider the question whether the appellants can amend the Rules with retrospective effect affecting vested right of parties. It is enough to observe that it is not possible to assume that when the Rule was amended after the respondents started their deposits under the unamended Rule that the rights will be governed by the amended Rule. Since the law presumes that all amendments except in cases of procedural matters, are only prospective in operation.
8. We therefore dismiss the writ appeal.