Restitution and statutory interest on refunded confiscated funds cannot be denied by silence in the appellate order.

Interest was payable on confiscated funds later refunded, because section 42(3) of the Foreign Exchange Regulation Act, 1973 contemplated payment to the entitled person with interest from the date the instrument came into custody until payment. Applying restitution, the Court held that retention of the amount by the department for a long period, followed by refund after confiscation was set aside, did not extinguish the petitioner's right to interest. Silence in the appellate order and reliance on section 34 CPC were rejected as no basis to deny the statutory and equitable claim. The respondents were directed to pay interest from confiscation to refund at the prevailing bank rate.

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Issues: Whether the petitioner was entitled to interest on the amount confiscated and later refunded, and whether the respondents could deny such interest in the absence of an express direction in the appellate order.

Analysis: Section 42(3) of the Foreign Exchange Regulation Act, 1973 contemplates payment of the proceeds to the entitled person together with interest at six per cent per annum from the date the instrument came into custody till the date of payment. The amount remained with the department for a long period and was ultimately refunded after the confiscation was set aside. The Court applied the principle of restitution and held that withholding and later returning the amount did not absolve the respondents from paying the interest that would have accrued to the petitioner. The reliance on a silence in the appellate order and on the analogy of Section 34 of the Code of Civil Procedure, 1908 was rejected as no justification to deny the statutory and equitable claim for interest.

Conclusion: The petitioner was held entitled to interest on the confiscated amount from the date of confiscation until the date of refund at the prevailing bank rate, and the respondents were directed to pay it.

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