2024 (2) TMI 1153 - SC - Indian Laws

Respondents must refund excess payment with 12% annual interest, not 3.5% bank rate as incorrectly applied

SC held that respondents failed to comply with HC order regarding refund of excess payment. Appellant entitled to refund for period January 2007-March ... Contempt application preferred by the appellant alleging non-compliance of order passed by the learned Single Judge of the High Court - entitlement to refund of the excess payment made by the petitioner over and above the notified price - requirement of furnishing all documents relating to refund of the excess amount - HELD THAT:- Suffice it to say that the claim of the appellant for refund pertaining to the third period, i.e. 1st January, 2007 till March, 2008 stands concluded with the rejection of SLP(Civil) No. 21019 of 2010 vide order dated 9th September, 2010 passed by this Court. Admittedly, the appellant has not been refunded the amount for the period running from 1st January, 2007 till March, 2008 and, therefore, the learned Single Judge was not justified in discharging the respondents in the contempt case without ensuring payment of the refund amount with interest to the appellant herein. Regarding the issue of interest on the refund for the period running from 1st January, 2005 to 11th December, 2005, the learned Single Judge rejected the claim of the appellant herein holding the said demand to be exaggerated. While drawing such inference, the learned Single Judge completely ignored the judgment rendered by this Court in Ashoka Smokeless Coal Industries(P) Ltd. and Ors. [2005 (12) TMI 610 - SUPREME COURT] wherein a pertinent direction had been given to make the refund of the excess amount with interest @ 12% per annum. Admittedly, as per the affidavit filed by the respondents, the interest which has been applied on the refund amount for the period between 1st January, 2005 to 11th December, 2005 is at the bank rate i.e. 3.5% per annum. Evidently thus, the respondents have failed to faithfully comply with the orders passed by the Jharkhand High Court as well as this Court. Thus, it is hereby directed that the appellant shall be entitled to interest @ 12% per annum on the refund amount for the period running from 1st January, 2005 to 11th December, 2005. The interest @ 3.5% per annum, already paid, shall be deducted from the differential amount. The appellant shall also be entitled to receive refund of the excess amount paid for the period between 1st January, 2007 till March, 2008 with interest @ 12% per annum in the same terms as directed by this Court vide order dated 9th September, 2010. The amount as directed above shall be paid to the appellant within a period of two months from today failing which, the officers concerned shall be made personally liable to pay the interest amount to the appellant. Appeal disposed off. Issues Involved:1. Non-compliance of the High Court order dated 22nd September, 2008.2. Entitlement to refund of excess price paid over the notified price.3. Entitlement to interest on the refund amount.Issue-wise Summary:1. Non-compliance of the High Court order dated 22nd September, 2008:The appellant approached the Supreme Court challenging the dismissal of their contempt application by the High Court of Jharkhand. The High Court had earlier directed the respondents to refund the excess price paid over the notified price for coal, but the appellant alleged non-compliance of this order. The Supreme Court noted that the High Court had directed the respondents to refund the amount within one month, which was not adhered to.2. Entitlement to refund of excess price paid over the notified price:The appellant claimed a refund for the excess price paid during an e-auction conducted by the respondent. The Supreme Court had previously adjudicated a similar issue in the case of Somal Pipes Pvt. Ltd. v. Coal India Ltd., where it was decided that the excess price paid between 12th December, 2005, and 1st December, 2006, should be refunded. The appellant sought a similar refund for the period from January 2005 to October 2007. The High Court had directed the respondents to refund the excess amount, but the appellant claimed that the refund for the period from 1st January, 2007, to March 2008 was still pending.3. Entitlement to interest on the refund amount:The appellant argued that they were entitled to interest at the rate of 12% per annum on the refund amount, as per the Supreme Court's order in Ashoka Smokeless Coal Industries(P) Ltd. v. Union of India. The respondents, however, had refunded the amount with interest at the bank rate of 3.5% per annum. The Supreme Court found that the respondents had failed to comply with the orders regarding the interest rate and directed that the appellant should receive interest at 12% per annum for the period from 1st January, 2005, to 11th December, 2005, after deducting the already paid 3.5% per annum. Additionally, the appellant was entitled to a refund of the excess amount paid for the period from 1st January, 2007, to March 2008 with interest at 12% per annum.Conclusion:The Supreme Court directed the respondents to pay the appellant the differential interest amount and the refund for the period from 1st January, 2007, to March 2008, with interest at 12% per annum. The payment was to be made within two months, failing which the concerned officers would be personally liable. The appeal was disposed of with no order as to costs.