CUTTACK: In a significant judgment, the Orissa High Court has allowed a petitioner to prematurely encash her fixed deposits to meet urgent expenses related to a family marriage, rejecting the strict interpretation of the National Savings Time Deposit Scheme, 2019, by postal authorities.
The petitioner, Priyadarsini Das, had approached the court after being denied permission by postal authorities to prematurely withdraw her own funds held in five-year fixed deposits. Her counsel cited pressing familial obligations and referred to the amended Rule 8(d) of the scheme, notified on November 7, 2023, which provides for premature withdrawal after four years, albeit at a lower rate of interest.
The postal authorities contended that the rule clearly prohibits any withdrawal before the four-year mark and defended the denial based on an official order dated November 14, 2023. However, the single judge bench of Justice Dixit Krishna Shripad observed that the rule in question, being part of subordinate legislation, should not be interpreted rigidly.
“It does not begin with negative phraseology such as ‘No premature encashment permitted’,” he noted, adding, “The Rule 8(d) specifically provides for premature encashment. However, the thrust of the rule is the rate of interest payable on the deposit, when it is withdrawn after four years, but before maturity. Such a rule, with the text reproduced above, cannot be treated as putting a complete embargo against premature withdrawal.”
Justice Shripad drew upon traditional Hindu law principles, recognising “aapaatkaale, vyaahaarike & kutumbaarthe” (emergency, social obligations, and family needs) as valid grounds for financial flexibility. “After all, the funds in deposit belong to her and not to the entity, which holds her money in deposit. Ordinarily, owner of a thing is entitled to make use of it in any way he/she desires, unless the law otherwise provides for,” he remarked.
While allowing the petition, Justice Shripad quashed the impugned letter dated August 5, 2025, and issued a writ of mandamus directing the chief post master general (Bhubaneswar), post master of HSG post office (Paradip) and post master of Barakolikhola to facilitate the withdrawal within two weeks. The court also warned that any delay would attract personal liability, with interest at one pc per month payable by the officials responsible.