2003 (9) TMI 770 - SC - Indian Laws

Summary

Issues:
Reduction of interest rate from 12% to 9% by the High Court on the amount to be refunded by the respondent.

Analysis:

1. Background:
- The appellant deposited &8377; 20 lacs as earnest money with the respondent pursuant to a tender notification.
- Appellant requested a refund due to withdrawal of offer, but the respondent refused, claiming forfeiture.
- Legal battle ensued, with the trial court decreeing refund with 12% interest.

2. High Court Proceedings:
- The High Court modified the interest rate awarded by the trial court from 12% to 9%.
- The appellant challenged this reduction, arguing that the respondent wrongfully retained the money, leading to prolonged litigation.

3. Supreme Court Decision:
- The Supreme Court found that the respondent had unlawfully withheld the appellant's money, justifying the interest awarded by the trial court.
- Emphasized that interest calculation should be based on case-specific facts, not precedent, unless limited by statute.
- Criticized the High Court for not providing substantial reasons for reducing the interest rate, as the facts did not align with previous judgments cited.

4. Conclusion:
- The appeal was allowed, setting aside the High Court's decision to reduce the interest rate from 12% to 9%.
- The original trial court's directive of 12% interest on the refunded amount of &8377; 20 lacs was reinstated.
- The respondent was ordered to pay costs amounting to &8377; 15,000.

This detailed analysis highlights the progression of the case from the initial deposit to the final Supreme Court ruling, focusing on the pivotal issue of interest rate reduction by the High Court and the subsequent decision to restore the original interest rate awarded by the trial court.