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TMI Blog2013 (11) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... authority of law, which is found to be absolutely illegal by the court of law when challenged in the court of law - the petitioner succeeded in the first round of litigation before the learned Single Judge, but lost the battle in the second round before the Division Bench and ultimately succeeded in third round before the Supreme Court – thus, it cannot be said that the respondents had no legal right to raise the demand at the time when the position of law was not very clear because of the reason that ultimately the view taken by the respondent-Department was found to be erroneous - Petitioner is entitled to interest from the date of the judgment of Hon’ble Supreme Court dated 22-1-1997 till the refund of the amount of Rs. 50 lacs on 12-1-1999 - for quantification the petitioner is entitled to interest @ 15% over Rs. 50 lacs from 22-1-1997 to 12-1-1999 – Decided in favour of Petitioner. - CWJC No. 2516 of 1998R - - - Dated:- 11-10-2012 - Prakash Tatia and Jaya Roy, J. Shri M.S. Mittal, Senior Advocate and A.R. Choudhary, for the Petitioner. Shri D. Roshan, Sr. S.C. (Central Excise), A. Kumar and R. Kumar, for the Respondent. ORDER By Court : Heard learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14th October, 1986 and to furnish bank guarantee for Rs. 50 lacs within eight weeks from the date of the order. In pursuance of the order of the Hon ble Supreme Court, dated 12th August, 1986, the petitioner deposited Rs. 25 lacs on 12th September, 1986 through cheque no. 067889 dated 13th September, 1986 and another sum of Rs. 25 lacs on 7th October, 1986 through cheque no. 068479, dated 8th October, 1986. 5. The petitioner s writ petition was allowed, vide order dated 19th August, 1988. At this juncture, we may mention here that in the order dated 30th April, 1986 and in the order passed by the Hon ble Supreme Court on 12th August, 1986, there was no condition for payment of interest over this amount by the respondent-Revenue, but in the appeal, being L.P.A. No. 71/1988R, filed by the Union of India, Revenue, a Division Bench of Patna High Court, on 7th February, 1989, passed an interim order, staying the operation of the impugned judgment dated 19th August, 1988 passed in the petitioner s writ petition and because of that reason, the Department was not supposed to repay the amount and therefore, to safeguard the interest of the writ petitioner, in the order dated 7th February, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of deposit till its refund to the writ petitioner on 12-1-1999 and the respondents took the stand that firstly interest is not provided in any statutory provision, in case of recovery of any amount; however, subsequently a provision was inserted in Section 11BB of the Central Excise Act with effect from 26-5-1995 and therefore, prior to this period, no interest can be claimed by the writ petitioner; secondly if the petitioner is found to be entitled to interest, then the interest can only be paid from the date of decision of Hon ble Supreme Court, i.e. from 12-1-1997 because of the reason that the interim order passed by this Court in L.P.A. No. 71/1988R providing the award of payment of interest @ 15% per annum merged in the final judgment passed by the Division Bench of this Court dismissing the writ petition of the writ petitioner and therefore, the writ petitioner could have claimed interest from the date of the decision of Hon ble Supreme Court, if the petitioner is entitled to interest. 7. Learned counsel for the petitioner submitted that there are catena of authorities wherein it has clearly been said by various High Courts and also by Hon ble Supreme Court tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner further relied upon the judgment of Hon ble Supreme Court rendered in the case of Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune Ors. reported in (2006) 2 SCC 508 = 2006 (196) E.L.T. 257 = 2007 (8) S.T.R. 193 wherein issue of award of interest in various contingencies have been considered in detail including the issue when there is no provision in the Act for payment of compensation or interest on delayed payment by the statutory authority as well as also considered the issue of general principle of law by which aggrieved ought to have been compensated in case of inordinate delay in refunding money due to it. Yet another judgment of Hon ble Supreme Court relied upon by the learned counsel for the petitioner is the judgment delivered in the case of O.N.G.C Ltd. v. Commissioner of Customs, Mumbai reported in 2007 (215) E.L.T 166 (S.C.) wherein from the facts it appears that the deposit was not with the condition of refund of the amount with interest, yet Hon ble Supreme Court allowed interest and that too, to the tune of Rs. 9,51,21,999.50 relying upon earlier judgments of Supreme Court merely on the ground of delay in refund by the Department. 9. Learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of interest. If the order contains condition of payment of interest, then irrespective of whether there is statutory provision for payment of interest or any statutory restriction of rate of interest, interest beyond that can be awarded in terms of the order, because of which one party has deposited the amount with the other. This has been laid down by Hon ble Supreme Court in the case of Tata Refractories Ltd. Ano. (supra). 13. Here in this case, the petitioner approached this Court and in the petitioner s own writ petition, this Court passed an order that no further steps in pursuance of Annexure-8 creating liability and demand against the petitioner shall be taken during the pendency of the writ petition, if the petitioner deposits a sum of Rs. one crore within four months from the date of the order. The petitioner not satisfied with the order dated 30th April, 1986 passed in CWJC No. 219/1986R approached Hon ble Supreme Court by filing Civil Appeal No. 2796/1986, wherein Hon ble Supreme Court modified the order and permitted the petitioner to deposit Rs. 50 lacs in two instalments on or before given dates and permitted the petitioner to furnish bank guarantee of Rs. 50 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30th April, 1986 was modified by Hon ble Supreme Court, vide order dated 12th August, 1986, the petitioner deposited Rs. 50 lacs in two instalments. Therefore, the amount, which was deposited by the writ petitioner, was not illegally recovered by the Department in any manner but it was the petitioner, who deposited the amount obviously to take the benefit of the interim order, may it be under the threat of recovery of the amount by the respondents. In the present facts, the petitioner deposited Rs. 50 lacs to take the benefit of the interim order and it is not the case of illegal recovery of the amount by the respondents. 15. The petitioner s writ petition, CWJC No. 219/1986R, was allowed by this Court but on 7th February, 1989, operation of the judgment dated 19th August, 1988 passed in CWJC No. 219/1986R was stayed by the Division Bench of this Court. Therefore, the respondents were not liable to refund the amount in view of the interim order. However, the interim order dated 7th February, 1989 has put a condition upon the Department that in case appellant, Union of India/Department, fails in appeal, then they will refund the amount with 15% interest. However, the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... award of interest cannot be confined to the statutory limit of interest and it can be the interest at the rate as ordered by the Court, which may be in excess of the statutory limit and for this, there is no dispute, which can be raised by the Department. However, in the judgments of O.N.G.C Ltd., Redihot Electricals and Jyoti Limited, Baroda (supra), it has been held that when Department recovers the amount for no justifiable reason or illegally or without authority of law, then in that situation, the Court can award interest. For this legal position also, there is no dispute but the condition precedent is that there must be totally unjustifiable recovery of the amount or it should be illegal recovery including recovery of the amount from the citizen in colourable exercise of power, interest can be awarded by the Court. This interest is awarded following the general principle of law that one, who deprives other from his property (money), is liable to refund the property/money with reasonable compensation. When it is a matter of illegal recovery and consequent retention of money, which is not governed by the statutory award of interest and is not be governed by contractual obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited the amount to take benefit of the interim order. Initially, in the order dated 30th April, 1986, the Court did not put any condition of payment of interest and Hon ble Supreme Court, in the order dated 12th August, 1986 modifying the order dated 30th April, 1986, did not put any condition for payment of interest over the deposited amount and the condition of payment of interest was put in the order dated 7th February, 1989 in L.P.A. filed by the Union of India against the judgment of learned Single Judge dated 19th August, 1988, quantifying the rate of interest @ 15% and thus, the benefit of that order is not available to the writ petitioner because of the reason that L.P.A. was allowed and the condition of payment of interest @ 15% was subject to failure of the appellant, Union of India, in succeeding L.P.A. and Union of India/Department not failed but succeeded in L.P.A. In Civil Appeal No. 1460/1990 before the Hon ble Supreme Court, no prayer was made by the petitioner for award of interest over the deposited amount and therefore, no such relief was granted by Hon ble Supreme Court in the petitioner s Civil Appeal No. 1460/1990. Therefore, claim of the writ petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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