Interest on security deposit released where the opposing party's interests were already protected by the disputed amount and related components.

Where a fixed deposit receipt is furnished as security under an interim court order because the applicant could not provide a bank guarantee, the interest earned on that deposit need not be retained if the opposing party's interest is already safeguarded by the disputed amount and the relevant interest and penalty components. On that basis, the court held there was no justification for withholding the accrued interest on the fixed deposit receipt and directed its release to the applicant.

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Issues: Whether the interest accrued on the fixed deposit receipt furnished as security pursuant to the Court's interim order was liable to be released to the applicant.

Analysis: The security deposit was made only because the applicant could not furnish the bank guarantee required by the earlier order. The Court noted that the respondents' interest was already safeguarded by the deposit of the disputed amount together with the components of interest and penalty then taken into account. In that situation, there was no justification for retaining the interest earned on the fixed deposit receipt.

Conclusion: The accrued interest on the fixed deposit receipt was directed to be released to the applicant.

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