2001 (7) TMI 1290 - SC - Indian Laws

Summary

Issues:
- Demand of interest by Oil and Natural Gas Commission (ONGC) from respondents post the appeal regarding natural gas price fixation.

Analysis:
1. The main issue in this judgment revolves around the demand for interest by ONGC from the respondents after a court appeal decided the price of natural gas. The contracts between the parties ended in 1979, but subsequent court orders impliedly continued the terms of the agreements. ONGC sought interest on the principal amount due to delayed payment by the respondents. The Supreme Court held that ONGC is entitled to claim interest as per the terms of the agreements, even though the main judgment did not specifically mention interest payment.

2. The Supreme Court referred to various legal precedents to support the principle of restitution, stating that when interim orders prevent payment initially but the final judgment requires payment, the recipient can claim interest by way of restitution. The Court emphasized that ONGC had the right to claim the money due to it, including interest, despite the absence of a specific direction in the main judgment regarding interest payment. The judgment upheld the price charged by ONGC and allowed the claim for interest as per the contractual terms.

3. The Court allowed ONGC to claim interest from the respondents at the rate specified in the previous agreements. However, two respondents were dealt with separately and adjourned for further proceedings. ONGC was granted the right to recover the entire amount due if the respondents failed to provide undertakings for payment in instalments within two months. The judgment outlined a payment plan for the respondents to clear the interest amount in monthly instalments over five years, with provisions for immediate payment in case of defaults.

4. In conclusion, the Supreme Court ruled in favor of ONGC, allowing the claim for interest on the principal amount from the respondents. The judgment provided a structured approach for the respondents to repay the interest amount in instalments, ensuring compliance with the contractual terms and facilitating the recovery of the outstanding dues by ONGC.