Refund delay and improper cheque location justified interest on refund money plus reimbursement of collection charges.

Refund of unallotted share application money attracted interest from expiry of the stipulated ten-week refund period, because the company remained in possession of the amount beyond that period and the delay in RBI permission did not displace the refund obligation. The complainant was therefore entitled to interest up to the date the refund order was prepared and acted upon. Where the refund cheque was made payable at a place other than the local branch, causing avoidable bank collection charges, reimbursement was also allowed as part of proper refund practice. The remaining relief was left undisturbed.

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Issues: (i) Whether the complainant was entitled to interest on the refund amount from the expiry of the stipulated period of ten weeks after closure of the issue up to the date of the refund order. (ii) Whether the complainant was entitled to reimbursement of bank collection charges incurred because the refund cheque was made payable at a place other than the local branch.

Issue (i): Whether the complainant was entitled to interest on the refund amount from the expiry of the stipulated period of ten weeks after closure of the issue up to the date of the refund order.

Analysis: The refund amount representing unallotted shares remained with the company beyond the prescribed period. The obligation to refund within ten weeks was not displaced by the delay in RBI permission. Interest was therefore payable from the expiry of ten weeks after closure of the issue until the date when the refund order was prepared and acted upon.

Conclusion: The complainant was held entitled to interest on Rs. 2,59,000 for the period from 6-1-1995 to 28-7-1995 at 15% per annum.

Issue (ii): Whether the complainant was entitled to reimbursement of bank collection charges incurred because the refund cheque was made payable at a place other than the local branch.

Analysis: The refund cheque ought to have been sent through a local branch at Delhi in accordance with the applicable refund practice, but it was made payable at Baroda, resulting in avoidable collection expenses.

Conclusion: The complainant was held entitled to Rs. 658 towards collection charges.

Final Conclusion: The appeal succeeded only to the extent of enhancing the interest period and granting reimbursement of collection charges, while the rest of the relief remained undisturbed.

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