1998 (3) TMI 139 - SC - Central Excise

Whether the orders of dismissal/disposal of Notices of Motion 400/92 and 503/92 had been vacated and these Notices of Motion had been restored to the file? Held that - We are distressed that the High Court should have passed orders allowing Notices of Motion 400/92 and 503/92 when these Notices of Motion had already been dismissed in 1993. We are distressed that the Union of India (the respondents) did not bring it to the knowledge of the Division Bench when the judgment and order under appeal was delivered or thereafter that these Notices of Motion had already been disposed of and that it contested these appeals. The appeals are allowed with costs. The judgment and order under appeal is set aside. It is made clear that the earlier orders dismissing Notice of Motion 400/92 and disposing of Notice of Motion 503/92 are the operative orders thereon.

Issues:
1. Interpretation of orders regarding the release of interest accrued on fixed deposits.
2. Validity of judgment allowing release of interest amounts.
3. Effectiveness of judgment based on dismissed/disposed Notices of Motion.
4. Applicability of earlier orders dismissing/disposing Notices of Motion.
5. Authority to release interest accrued on fixed deposits.

Analysis:
The judgment dealt with an appeal concerning the release of interest accrued on fixed deposits related to a writ petition filed by the appellant regarding manufacturing activities and assessable value of processed fabric. The appellant was required to provide a bank guarantee and deposit the disputed amount during the appeal process. The question arose regarding the entitlement to the interest accrued on the fixed deposits, as there was no specific order addressing this issue. The Prothonotary initially ordered the release of the interest amount to the appellant, which was challenged by the respondents through a Notice of Motion in the High Court. The subsequent clarification application by the respondents was dismissed by the Supreme Court. The appellants then requested the release of the interest amount, leading to a Division Bench judgment in Notice of Motion 400/92 allowing the release of interest to the respondents.

In a similar appeal, Notice of Motion 503/92 had also been disposed of without any specific order for the release of interest to the appellant. The counsel for the appellants argued that the judgments allowing the release of interest were ineffective as the original Notices of Motion had not been restored to the file. The respondents' failure to bring this to the court's attention was noted with concern. The Supreme Court found that the judgments based on dismissed/disposed Notices of Motion were invalid and set them aside. It was emphasized that the earlier orders dismissing/disposing of the Notices of Motion were the operative decisions, directing the High Court to release the accrued interest amounts to the respective appellants.

The Supreme Court expressed distress over the oversight in allowing the release of interest amounts when the original Notices of Motion had already been dealt with in 1993. The respondents were advised to seek appropriate relief through the High Court if necessary. Ultimately, the appeals were allowed, with costs, and the judgment permitting the release of interest amounts was overturned. The Prothonotary was instructed to release the accrued interest on fixed deposits to the appellants based on the earlier dismissed/disposed Notices of Motion.

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