2014 (9) TMI 234 - SC - Customs

Payment of interest to the petitioner - Held that - It is an admitted fact that a sum of ₹ 85 Lakhs had been paid to the respondent-State when Bank Guarantee was invoked. It is also an admitted fact that the said amount was repaid to the petitioner on 23-7-2011. Thus, the aforesaid amount of ₹ 85 Lakhs was retained by the State for more than 8 years without any justifiable reason. - Looking to the peculiar facts of the case, especially when the respondent-State had retained such a substantial amount belonging to the petitioner with it for more than 8 years, in our opinion, it would be just and appropriate to compensate the petitioner and therefore, we direct that the respondent-State shall pay an amount of ₹ 10,00,000/- (Rupees Ten Lakhs), by way of compensation to the petitioner within three months from today. - Decided in favor of assessee.

Summary

Issues:
Alleged non-payment of statutory interest on a sum of money retained by the State for over 8 years.

Analysis:
The judgment pertains to a contempt petition where the petitioner alleged non-payment of statutory interest on a sum of &8377; 85 lakhs retained by the State for more than 8 years. The respondent argued that no statutory provision mandated the payment of interest, hence no contempt was committed. The court noted that the amount was repaid to the petitioner after 8 years without any justifiable reason. The petitioner did not dispute the absence of a statutory provision for interest payment. Despite this, the court found it just and appropriate to compensate the petitioner due to the prolonged retention of the substantial amount by the State.

The court acknowledged that there was no statutory provision requiring the payment of interest on the sum retained by the State. However, considering the peculiar circumstances where the State held the amount for over 8 years without justification, the court deemed it fit to award compensation to the petitioner. The court directed the respondent-State to pay &8377; 10,00,000/- (Rupees Ten Lakhs) to the petitioner as compensation within three months from the date of the judgment. This compensation was ordered as a means to rectify the undue delay and unjust retention of the petitioner's money by the State.

In conclusion, the Supreme Court disposed of the Contempt Petition by ordering the respondent-State to pay compensation to the petitioner due to the extended retention of a significant sum of money without a valid reason. Despite the absence of a statutory provision for interest payment, the court exercised its discretion to grant compensation in light of the unjustifiable delay in returning the amount to the petitioner. The judgment highlights the court's commitment to ensuring fairness and justice in cases involving prolonged retention of funds by government entities.