Restoration of seized property requires market value payment, with interest, when return becomes impossible after unlawful retention.

When seized property is found not liable to confiscation, the seizing authority must restore it; if the property is unavailable because it was lost or cannot be returned while in official custody, the obligation shifts to payment of its market value as on the date the duty to restore arose. The text further states that wrongful retention of that value warrants interest from the date liability accrued until payment, because the owner has been deprived of the use of the property's value during the period of non-restoration.

---

---

Issues: (i) Whether the respondents were bound to return the seized gold ornaments or pay their market value when the adjudicating authority found the seizure unsustainable and the ornaments were not available for return; (ii) Whether the petitioners were entitled to interest on the amount representing the market value of the seized ornaments.

Issue (i): Whether the respondents were bound to return the seized gold ornaments or pay their market value when the adjudicating authority found the seizure unsustainable and the ornaments were not available for return.

Analysis: The seizure was made under the statutory power under Section 66(1) of the Gold (Control) Act, 1968, and not under any sovereign power. Once the Additional Collector concluded that the ornaments were not liable to confiscation and the show-cause notice was discharged, the respondents became bound to restore the seized property. If the ornaments were unavailable because of loss or negligence while in departmental custody, the obligation did not disappear; it shifted to payment of the market value as on the date when the liability to return arose.

Conclusion: The respondents were bound to pay the market value of the seized gold ornaments, assessed as on 22 February 1983, in place of returning the ornaments themselves.

Issue (ii): Whether the petitioners were entitled to interest on the amount representing the market value of the seized ornaments.

Analysis: The petitioners had been deprived of the value of the ornaments from the date on which the respondents became liable to restore them, and the withheld amount represented money wrongfully retained by the authorities. In those circumstances, compensation for the deprivation required payment of interest from the date of accrual of liability until actual payment.

Conclusion: The petitioners were entitled to interest at 12% per annum from 22 February 1983 until the date of payment.

Final Conclusion: The writ petition succeeded, and the respondents were directed to pay the petitioners the market value of the seized ornaments with interest and costs.

Ratio Decidendi: When seized property is found not liable to confiscation, the seizing authority must restore it, and if restoration is impossible, pay its market value as on the date the duty to return arose, together with appropriate interest for wrongful retention.

---