Interest on refunded plot consideration allowed for arbitrary retention of money, but only from actual payment date.

A public authority that arbitrarily withholds and retains an allottee's money after a justified refund request may be required to pay interest as compensation for use and retention of the funds. The Court treated the authority's silence and differential treatment of similarly placed allottees as arbitrary and discriminatory, which justified interest on the refunded plot consideration. However, interest could not begin from the date only the earnest money was paid; it had to run from the date the principal consideration was actually remitted. The liability to pay interest was therefore affirmed, subject to correction of the commencement date.

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Issues: Whether the Board was liable to pay interest on the refunded plot consideration, and if so, from which date such interest was payable.

Analysis: The dispute arose from a public authority's retention of the plot consideration after the allottee complained that the allotted site was unusable and sought refund. The material on record showed that similarly placed allottees had obtained refunds with interest, while the Board remained silent on the allottee's repeated requests and effectively compelled it to approach the court. In those circumstances, the Court held that the Board's conduct was arbitrary and discriminatory, and that interest was justified as compensation for the use and retention of the money. However, the Court also found that interest could not run from the date on which only the earnest money was paid, because the principal consideration was remitted later.

Conclusion: The Board was liable to pay interest, but only from the date the principal consideration was actually remitted, not from the earlier date fixed by the High Court; the appeal therefore failed, subject to this modification.

Final Conclusion: The decision affirms liability of a public body to compensate for wrongful retention of money by awarding interest, while correcting the commencement date to match the actual date of payment.

Ratio Decidendi: When a public authority arbitrarily withholds and retains a citizen's money despite a justified request for refund, interest may be awarded as compensation for use and retention of the money, but it must be computed from the date the amount was actually paid.

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