Restitution of wrongfully retained seized money includes earned interest, but writ relief does not extend to interest on that interest

Writ jurisdiction under Article 226 can extend to consequential restitution where seized money was wrongfully retained and the authority earned interest on it; the accretion belongs with the restored principal, and the claim was maintainable to that extent. The principles of restitution and unjust enrichment supported relief because the facts were undisputed and the State could not retain the benefit of the fixed deposit interest after belated refund. A further claim for interest on that accrued interest was not ordinarily maintainable in writ proceedings and was left to be pursued in civil suit.

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Issues: (i) Whether a writ petition under Article 226 of the Constitution of India was maintainable to claim interest earned by the respondent on seized money that was later found to have been illegally retained and refunded belatedly; (ii) Whether a writ petition could be entertained for interest claimed on the amount of interest earned by the respondent after refund of the principal sum.

Issue (i): Whether a writ petition under Article 226 of the Constitution of India was maintainable to claim interest earned by the respondent on seized money that was later found to have been illegally retained and refunded belatedly.

Analysis: The seizure and retention of the principal amount had already been held to be without authority of law. In such a situation, the power under Article 226 could be invoked to grant consequential relief where the facts were undisputed and the State or its authority had retained the money during the interregnum and earned accretion thereon. The retention of the benefit of the fixed deposit interest by the authority was treated as inconsistent with the obligation to restore not only the principal but also the accretions arising from the wrongfully retained amount. The principles of restitution and unjust enrichment were applied, and the authority was expected to act as a model litigant and not to resist a plainly meritorious claim on technical grounds.

Conclusion: The writ petition was maintainable to the extent of the claim for Rs. 4,42,500/- being the interest actually earned by the respondent on the seized amount.

Issue (ii): Whether a writ petition could be entertained for interest claimed on the amount of interest earned by the respondent after refund of the principal sum.

Analysis: The further claim was for interest upon the amount of Rs. 4,42,500/- from the date of refund onwards. That claim required adjudication beyond the scope of a writ proceeding and was not covered by the rule relating to interest on seized currency, which operated on the principal amount from the date of seizure till the date of payment. The Court held that this further claim was more appropriately pursued in a civil suit and not in writ jurisdiction.

Conclusion: The writ petition was not maintainable for the claim of interest on Rs. 4,42,500/- from 1 December 2009 onwards.

Final Conclusion: The appeal succeeded only in part. The dismissal of the writ petition was set aside only with respect to the amount representing interest earned by the respondent on the seized money, while the separate claim for future interest on that amount was left undisturbed.

Ratio Decidendi: Where seized money is ultimately found to have been wrongfully retained, the authority must restore the accretions earned on that money as consequential relief under Article 226, but a further claim for interest on such accreted interest is not ordinarily maintainable in writ jurisdiction.

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