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TMI Blog2025 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... r the deprivation, call it by any name. It may be called interest, compensation or damages. This is also the principle of Section 34 of the Civil Procedure Code. Interest of normal accretion on capital - HELD THAT:- If on facts of a case, the doctrine of restitution is attracted, interest should follow. Restitution in its etymological sense means restoring to a party on the modification, variation or reversal of a decree or order what has been lost to him in execution of decree or order of the Court or in direct consequence of a decree or order. The term "restitution" is used in three senses, firstly, return or restoration of some specific thing to its rightful owner or status, secondly, the compensation for benefits derived from wrong done to another and, thirdly, compensation or reparation for the loss caused to another. In Hari Chand v. State of U.P. [2011 (2) TMI 1638 - ALLAHABAD HIGH COURT], the Allahabad High Court dealing with similar controversy in a stamp matter held that the payment of interest is a necessary corollary to the retention of the money to be returned under order of the appellate or revisional authority. The High Court directed the State to pay interest @ 8% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he consideration to be paid for consummating the sale transaction; and (iv) the value of e-stamp paper. 4.4 According to the petitioners, though initially, the intention was to execute the sale deed concerning subject property in July,2016, since, there was some delay in closing the loan transaction via which the transaction was to be funded, the execution of the sale deed was delayed. 4.5 This delay proved to be fatal, inasmuch as, on 4.8.2016, the petitioners were told by the broker, who had the custody of the e-stamp paper, that the e-stamp paper dated 6.7.2016 had been misplaced. 4.6 The petitioners realizing the enormity of the loss, filed a complaint with the Crime Branch, Delhi Police, on that very day i.e. 4.8.2016. As a follow up action, on 06.08.2016, the petitioners got public notices issued in two newspapers, namely, Asian Age (English edition) and Rashtriya Sahara (Hindi edition). 4.7 Since, the petitioners were desirous of taking the sale transaction in respect of subject property forward, they were left with no choice but to purchase a fresh e-stamp paper, which they did, on 6.8.2016. 4.8 This stamp paper bore the No. INDL80452882772240. The money f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Single Judge adjudicated the writ petition and ultimately thought fit to partly allow the same. The learned Single Judge issued a writ of mandamus to the respondents herein to refund a sum of Rs. 28,10,000/- within a period of two weeks from the date of pronouncement of the judgment. 7. It appears that the petition was partly allowed as only the principal amount was ordered to be refunded whereas the interest on the same was declined. We take notice of few relevant observations made by the learned Single Judge while ordering refund of the principal amount referred to above:- "19. Therefore, the question before me is: should the Court, in such circumstances, fold its hands and deny a person, who has lost the stamp paper, relief only because the draftsman has omitted the use of such expression explicitly in the Statute. As noticed above, it is not unknown to law that when Courts have encountered such creases in the Statute they have proceeded to iron them out without destroying the fabric which forms the core of the Statute. The expression obliterate appearing in Section 49 (a) of the Act should, in my opinion, include cases where the Stamp paper is lost by an applicant seeking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost e-stamp paper dated 06.07.2016 adverts to the same property qua which sale transaction stands effected via the new stamp paper dated 06.08.2016, the possibility of misuse of the old e-stamp paper dated 06.07.2016, to my mind, does not arise. (iii) The lost e-stamp paper dated 06.07.2016 having been locked and cancelled, there is, to my mind, given the technology in place, no possibility of the lost e-stamp paper being mis-utilized. The Collector of Stamps invariably checks the website of Stock Holding Corporation Ltd. to ascertain whether or not the stamp paper is genuine. The order dated 11.03.2015, passed by the Divisional Commissioner, clearly casts such an obligation on the Collector of Stamps. (iv) Lastly, in any case, the petitioners have furnished an indemnity bond, and therefore, loss or damages, if any, suffered by the respondents can always be recovered. 23. Before I proceed further, I need to touch upon the argument raised by Mr. Ramesh Singh that the view held by a Single Judge of this Court in Piyush Aggarwal's case requires reconsideration. This was a case where the petitioners had sought refund of stamp duty on account of the fact that before the instrum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Even as regards applicability of Section 52 of the Act, the matter can be looked at in another perspective. The "chargeable event" being the date of execution of the document and if on that date higher than the admissible stamp duty is levied or collected, it would fall within the ambit of excess payment being "inadvertently" collected on the said date from the petitioner. Thus, it could even be urged that Section 52 of the Act was applicable. Further as noticed earlier dehors the applicability of Section 52 of the Act, stamp duty collected without authority of law cannot be retained in terms of Article 265 of the Constitution of India in the absence of any statutory provision requiring refund application to be submitted within a specified period or prohibiting the refund unless made within the specified period. In the instant case, it may be noted, that application for refund had been made within the stipulated period of six months under Section 52 of the Act....." (Emphasis is mine) 23.6 Having regard to the facts which obtained in Piyush Aggarwal's case and enunciation of law by the Court, I am not persuaded to hold that the judgment requires reconsideration, as was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was faced with a question as to whether refund of stamp duty ought to be ordered in a case where the petitioners had misplaced i.e. lost the stamp papers. 24.2 The Additional Advocate General resisted the writ petition, broadly, on the ground that there was no provision for grant of refund of stamp paper, in cases where it was lost and that if such a relief was granted, it would result in loss to the national exchequer. 24.3 I must confess that, though, in that case, the Court noticed the existence of Rule 5 of the Punjab Non Judicial Stamp Refund, Renewal and Disposal Rules, 1954 which provided for refund of stamp duty in case of its loss, albeit, in specified circumstances i.e., where stamp paper was stolen or lost in transit by Government officials. The Court, after noting that there was a discrimination, inasmuch as, Rule 5 permitted write off where stamp papers were lost by public functionaries, whereas, a similar facility was not given to private person, went on to deal with the other arguments, that is, whether it could order refund in exercise of its constitutional powers in the absence of specific provision for refund, the possibility of loss to the national excheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers of the superior Courts to abridge the distance between the legislator and the public-at-large has inter-alia observed as under: "The judge must reflect these fundamental values in the interpretation of legislation. The judge should not narrow interpretation to the exclusive search for subjective legislative intent. He must also consider the "intention" of the legal system, for the statute is always wiser than the legislature. By doing so the judge gives the statute a dynamic meaning and thus bridges the gap between law and society." If refusal on the part of the respondents to issue refund in favour of the petitioner is adjudged on the touchstone of aforequoted cases, I am of the humble opinion that the same is not tenable for the reason that when the legislator has framed rules for refund of spoiled/unused/lost Stamp Papers, how the respondents can interpret said rules according to their own whims just to damage the case of the claimants. xxx xxx xxx In this scenario, the objection raised by the learned Additional Advocate General that the refund is not permissible without production of original Stamp Papers is of no worth at all. The bona fide of the petitioner is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this view of the matter, the objection posed by the learned Law Officer is hereby spurned. 13. Now taking up plea of learned Additional Advocate General that in case refund is allowed in absence of original Stamp Papers not only scrupulous persons would be able to use them for any other purpose but they would also succeed to get refund while causing colossal loss to the National Exchequer. In this regard, I am of the view that strict criteria can be laid to avoid such apprehension but in no way same can be made a ground to deprive a person from refund of the amount whose claim has been admitted by the relevant forums. In case the respondents have the apprehension that the Misplaced Stamp Papers were or would be used for any other purpose they can proceed against the culprit under the relevant law in addition to getting registered a criminal case against the petitioner. 14. Admittedly, the Misplaced Stamp Papers were used for preparation of sale deed as is evident from the recitals of copy of sale deed (Annexure-C of this petition), thus, the possibility of using the Misplaced Stamp Papers for any other purpose is totally ruled out. Moreover, execution of sale deed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that the respondents are not going to pay anything either from their own pockets or from the National Exchequer either they have to repay the amount twice deposited by the petitioner. Had the petitioner claimed anything in addition to that he deposited at the time of issuance of Stamp Papers then the said contention would have some substance. Considering from another angle in the cases where spoiled or unused Stamp Papers are returned by the persons concerned they are issued refund without taking into consideration that the said amount is being repaid from the National Exchequer. This fact alone amounts to discrimination on the part of competent authority......" (Emphasis is mine) xxx xxx xxx 25. As would be noticed, the Aziz Ullah Khan's case, on facts, was pari materia with the facts obtaining in the instant case. In that case, the stamp paper was lost, which was required for consummation of the sale transaction concerning the subject immovable property. The petitioner, as in the instant case, had bought a new stamp paper and had gone on to consummate the sale transaction qua the very same property. 26. I may also indicate that insofar as other cases cited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered by the Court in Mafatlal Industries Ltd. case. Pertinently, the Court, while allowing the appeal of the State, directed the State to remit undue benefit obtained by the respondent company to a voluntary or charitable organization, since, the State during that period, could not have levied or collected the tax from the respondent company. This aspect of the matter is reflected in Paragraphs 32, 33, 36 & 37. For the sake of convenience, the same are extracted hereafter: "...32. In a given case, this Court in exercise of its jurisdiction under Article 142 of the Constitution of India may also issue other directions, as has been done in Indian Banks' Assn. v. Devkala Consultancy Service [(2004) 11 SCC 1] in a similar situation where it was difficult for the Court to direct refund of a huge amount to a large number of depositors from whom the bank had illegally collected, this Court directed that the amount be spent for the benefit of the disabled in terms of the provisions of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. This Court may take recourse to such a procedure as the State also having granted exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excises Act and Section 27 of the Customs Act. 26.6 Likewise, Sri Maganti Suryanarayana case cited for the proposition, that there is no inherent jurisdiction vested in the Collector of Stamps to grant refund as he is a creature of the statute or the judgment rendered in Govt. of A.P. & Ors. vs. P. Laxmi Devi (Smt.) case, cited for the proposition that there is no equity in tax are propositions, which have held the field for so long that they appear to be cast in stone. Having said so, the foregoing discussion would show that these propositions would not impede the cause of the petitioners, given the situation obtaining in the instant case." 8. Thus, in paragraph 19, the learned Single Judge posed a question for his consideration whether the circumstances in which the refund was prayed for by the appellants herein, would be a relevant consideration for ordering refund of the said amount. In other words, the learned Single Judge asked a question to himself whether the court, in such circumstances, should fold its hands and deny relief to a person, who has lost the e-stamp paper, only because the draftsman has omitted the use of such expression explicitly in the Statute. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on delayed payment has been explained by this Court in the case of Authorised Officer Karnataka Bank v. M/s R.M.S. Granites Pvt. Ltd. & Ors. in Civil Appeal No. 12294 of 2024, we quote the following observations:- "It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say ten years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B ten years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to [See: Alok Shanker Pandey v. Union of India : AIR 2007 SC 1198.]" 17. Thus, when a person is deprived of the use of his money to which he is legitimately entitled, he has a right to be compensated for the deprivation which may be called interest or compensation. Interest is paid for the deprivation of the use of money in general terms w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to another, or for the delay in paying money after it has become payable." (Emphasis supplied) 23. The appeal filed against aforesaid decision was dismissed by this Court in Sham Lal Narula Dr. v. CIT, AIR 1964 SC 1878. 24. In the case of Hello Minerals Water (P) Ltd. v. Union of India, (2004) 174 ELT 422, (paras 15 and 16), a Division Bench of the Allahabad High Court explained the concept of interest as under:- "15. We may mention that we are passing the direction for interest since interest is the normal accretion on capital. Often there is misconception about interest. Interest is not a penalty or punishment at all. 16. For instance, if A had to pay a certain sum of money to B at a particular time, but he pays it after a delay of several years, the result will be that the money remained with A and he would have earned interest thereon by investing it somewhere. Had he paid that amount at the time when it was payable then B would have invested it somewhere, and earned interest thereon. Hence, if a person has illegally retained some amount of money then he should ordinarily be directed to pay not only the principal amount but also the interest earned thereon. Money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances, an application was filed before this Court to direct the respondent to pay interest on the aforesaid amount w.e.f. the date of recovery till the date of payment. The appellants relied upon the judgment in the case of South Eastern Coal Field Ltd. v. State of M.P., (2003) 8 SCC 648. This Court explained the principles of restitution in the case of O.N.G.C. Ltd. (supra) as under:- "Appellant is a public sector undertaking. Respondent is the Central Government. We agree that in principle as also in equity the appellant is entitled to interest on the amount deposited on application of principle of restitution. In the facts and circumstances of this case and particularly having regard to the fact that the amount paid by the appellant has already been refunded, we direct that the amount deposited by the appellant shall carry interest at the rate of 6% per annum. Reference in this connection may be made to Pure Helium Indian (P) Ltd. v. Oil & Natural Gas Commission, JT 2003 (Suppl. 2) SC 596 and Mcdermott International Inc. v. Burn Standard Co. Ltd. JT 2006 (11) SC 376." (Emphasis supplied) COMPENSATION: 28. The word 'Compensation' has been defined in P. Ramanatha Aiyar& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd payable to the assessee is debt-owed and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course." (Emphasis supplied) 30. Considering the reasons assigned by the learned Single Judge while taking the view that the respondents could not have declined to refund the amount and the fact that the retention of the said amount was for a long time and further the appellants were left with no other option but to approach the High Court, we are of the view that the appellants are entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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