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Issues: (i) Whether the confiscated foreign exchange was required to be returned in US dollars or could be paid in Indian rupees at the prevailing exchange rate. (ii) Whether the rate of interest fixed in the earlier order should be altered.
Issue (i): Whether the confiscated foreign exchange was required to be returned in US dollars or could be paid in Indian rupees at the prevailing exchange rate.
Analysis: The earlier order had specifically directed return of the foreign exchange. The provisions relied upon did not show any legal basis for substituting payment in Indian rupees for seized foreign currency. The Court noted that foreign exchange had been contemplated for return in its original form, and the long pendency of the application could not justify penalising the recipient by depriving him of the currency direction already granted. At the same time, since the applicant was willing to accept rupee equivalent to bring quietus to the dispute, the Court directed conversion at the prevailing rate on the date of the order.
Conclusion: The foreign exchange amount was to be paid in Indian rupees equivalent to US$ 1,300 at the prevailing rate as on 14 June 2022.
Issue (ii): Whether the rate of interest fixed in the earlier order should be altered.
Analysis: The earlier order stipulated interest at 10%. The Department's failure to comply with the return direction and the absence of any legal basis to depart from the earlier terms justified maintaining the same rate. The Court declined to reduce or vary the interest component.
Conclusion: The rate of interest of 10% was maintained.
Final Conclusion: The modification application failed in substance, and the original return direction was enforced with rupee conversion at the prevailing rate together with the same interest terms.
Ratio Decidendi: Where a court has directed return of confiscated foreign exchange, the enforcing authority cannot unilaterally substitute the obligation with a different mode of payment unless the order or governing law authorises such substitution.
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