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TMI Blog2017 (9) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... nforcement Directorate (hereafter 'ED'). During the search, the respondent seized a total amount of Rs.3,44,62,040/- and certain other documents. Thereafter, on 24.12.2007, a complaint was lodged under Section 16(3) of the Foreign Exchange Management Act, 1999 (hereafter as 'FEMA') before the Adjudicating Authority. 3. Pursuant to the complaint, the Adjudicating Authority issued a Show Cause Notice (SCN) dated 12.05.2008 to the petitioner. The petitioner participated in the adjudication proceedings which culminated in the order dated 09.02.2009. By the aforesaid order dated 09.02.2009, the Adjudicating Authority directed confiscation of the seized amount and also imposed penalties on the appellant and its partners. 4. Aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the said deposit. 10. It is in the aforesaid context, the petitioner has moved this Court claiming (a) actual interest accrued on seized amount invested in the fixed deposit and (b) further interest at the rate of 6% on the amount of interest withheld by the respondent (from 25.10.2012 to 05.04.2013). 11. Mr. Dev P. Bhardwaj, learned counsel appearing for the respondent submitted that the respondent had paid the entire principal and also the interest at the rate of 6% per annum albeit belatedly and, therefore, no further amount was payable to the petitioner. He submitted that in terms of Rule 8 of the Foreign Exchange Management (Encashment of Draft, Cheque, Instrument and Payment of interest) Rules, 2000 (hereafter 'the Rules' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a nationalized bank in the name of Directorate of Enforcement. Rule 8 of the Rules provides for payment of interest on the amount seized and reads as under:- "8. Payment of interest on the seized Indian currency.- (i) Where it is found after completion of the investigation that the Indian currency seized under section 37 of the Act is not involved in the contravention and is to be returned, the same shall be returned to such persons together with interest at the rate of 6% per annum from the date of seizure till the date of payment. (ii) Where it has been found during the course of adjudication that the seized Indian currency is not relevant for such adjudication, the Adjudicating Authority may pass such order returning such Indian c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the aforesaid view. 19. The interest on the fixed deposit represents an accretion to the amount seized from the petitioner and, thus, plainly the petitioner would be entitled to the same. The provisions of Rule 8 of the Rules, must be considered in the context of the respondent depositing the money in the account of the ED and is intended to ensure that the person from whom the amounts are seized is paid an interest at the rate of 6% per annum from the date of seizure till the date of payment. This provision would obviously not be applicable where the funds were directly invested in a separate fixed deposit bearing a higher rate of interest. In such cases the interest on the funds of the owner would represent accretion on the amount and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for denial of the right to utilise the money due. In Thazhathe Purayil Sarabi & Ors v. Union of India: AIR (2009) SC 3098, the Supreme Court observed that "As has been frequently explained by this Court and various High Courts, interest is essentially a compensation payable on account of denial of the right to utilise the money due, which has been, in fact, utilized by the person withholding the same. Accordingly, payment of interest follows as a matter of course when a money decree is passed". 22. Thus, this Court is of the view that the respondent be also directed to pay interest at the rate of 6% per annum on the said sum of Rs.1,19,09,803/- (which was concededly due to the petitioner on 25.10.2012) for the period from 25.10.2012 to 05 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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