Interest on abkari dues under revenue recovery law is treated as compensation for delayed payment, not under the Interest Act.

Interest on abkari dues recoverable as arrears under the Revenue Recovery Act is described as arising under the revenue recovery scheme itself, because Section 6 expressly allows recovery of interest on the principal amount. The text contrasts this with Section 3 of the Interest Act and states that the liability to pay interest is governed by the Revenue Recovery Act rather than the Interest Act. It further notes that where money due to the State is retained for years, interest operates as reasonable compensation for the delay. On that basis, the demand for interest under the Revenue Recovery Act was upheld.

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Issues: Whether interest on abkari dues recoverable as arrears under the Revenue Recovery Act was governed by Section 6 of that Act or by Section 3 of the Interest Act.

Analysis: The dues were recoverable under the Revenue Recovery Act, and Section 6 expressly provides for recovery of interest on the principal amount. On that basis, the liability to pay interest was held to arise under the revenue recovery scheme itself, not under Section 3 of the Interest Act. The appellant had retained money due to the State for years, and the State was entitled to compensation for the loss caused by the delay in payment. The interest contemplated was treated as the reasonable interest recoverable under Section 6 of the Revenue Recovery Act.

Conclusion: The challenge to the levy of interest failed, and the demand of interest under Section 6 of the Revenue Recovery Act was upheld against the appellant.

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