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2020 (12) TMI 486 - HC - FEMAInterest liability u/s 42(3) of FERA - main ground on which the Petitioner claims interest is that Section 42(3) of FERA stipulates that interest is payable at 6% p.a. in all cases other than cases relating to confiscation either under Section 63 of FERA or under the Customs Act, 1962 - HELD THAT - In present writ petition claiming interest was filed on or about 28.08.2009. It is clear that the writ petition was filed more than 9 years after receiving the rupee equivalent of UK Pounds 1800. Upon perusal of the affidavit, find that the Petitioner stated that she and her counsel visited the office of the 1st Respondent to request for the payment of interest and that she was constrained to file the writ petition on account of non-payment thereof. Apart from this statement, no explanation is offered for the delay and no written reminders are on record. If the Petitioner had filed a suit to recover interest, such suit would have been rejected in limine on the ground of limitation. A public law remedy is discretionary and, in the overall facts and circumstances, including the complete failure to provide a reasonable explanation for the delay not inclined to exercise discretion in favour of the Petitioner who has approached the Court rather belatedly. Thus, writ petition is liable to be rejected solely on the ground of laches. In addition, as stated earlier, the Petitioner did not seek a modification of or challenge the order so as to claim interest.
Issues Involved:
1. Entitlement to interest on the refunded amount. 2. Maintainability of the writ petition. 3. Applicability of Section 42(3) of the Foreign Exchange Regulation Act (FERA). 4. Delay and laches in filing the writ petition. Issue-wise Detailed Analysis: 1. Entitlement to Interest on the Refunded Amount: The petitioner sought interest on ?32,371/- from the date of seizure (16.08.1974) till the date of payment (16.03.2000). The petitioner argued that the confiscation was set aside by the court, triggering a statutory interest liability under Section 42(3) of FERA. The petitioner cited several judgments to support the claim for interest, including *Life Insurance Corporation of India v. Gangadhar Vishwanath Ranade*, *Northern Plastics Ltd v. Collector of Customs & Central Excise*, *Satinder Singh v. Umrao Singh*, and *Union of India v. Tata Chemicals*. The respondent countered that the petitioner should have sought modification of the court order or appealed for interest, as the original order did not include interest. The court concluded that interest under Section 42(3) of FERA pertains to proceeds realized under Section 42(1) and deposited in a separate account, which was not applicable in this case. 2. Maintainability of the Writ Petition: The respondent argued that the writ petition was not maintainable as the petitioner, being a Malaysian citizen, was not entitled to file it. Additionally, the respondent contended that the petitioner should have sought modification or appealed the original court order to claim interest. The court noted that the petitioner did not seek modification or challenge the order in C.M.A. No.82 of 1992 to claim interest, and thus, the writ petition for interest was not maintainable. 3. Applicability of Section 42(3) of FERA: The petitioner argued that Section 42(3) of FERA, which provides for interest at 6% per annum in cases other than confiscation under Section 63 of FERA or the Customs Act, 1962, applied to this case. The respondent relied on the judgment in *C. Arasakumar v. Union of India*, where it was held that Section 42(3) does not provide for interest on confiscated currency notes. The court agreed with the respondent, concluding that Section 42(3) pertains to proceeds realized under Section 42(1) and deposited in a separate account, which was not applicable here. 4. Delay and Laches in Filing the Writ Petition: The petitioner filed the writ petition more than nine years after receiving the refunded amount. The court noted that the petitioner was aware of the right to claim interest, as evidenced by a letter dated 18.02.2000, but failed to provide a reasonable explanation for the delay. The court cited the principle of laches, as established in *State of Maharashtra v. Digambar*, which disentitles a party from relief due to undue delay. The court concluded that the writ petition was liable to be rejected solely on the ground of laches. Conclusion: The writ petition was dismissed on the grounds of laches and failure to seek modification or appeal the original court order to claim interest. The connected Miscellaneous Petition was closed, and no costs were awarded.
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