LI Network
Published on: 8 September 2023 at 11:32 IST
The Supreme Court has dismissed the claim for interest on a deposited amount during the pendente lite period in appeals related to the refund of funds deposited by charitable institutions with the Delhi Development Authority (DDA) to avail additional floor area ratio (FAR) for construction.
In a case presided over by a two-judge Bench consisting of Justice A.S. Bopanna and Justice Prashant Kumar Mishra, the Court held that in the absence of an adjudication and determination of the appellant’s right and a declaration that the amount was illegally demanded and retained by the respondent, the direction to pay interest or compensate for the pendente lite period would not apply.
The matter revolved around the DDA’s notification specifying rates for various charges related to enhanced FAR in accordance with the Master Plan of Delhi 2021.
The appellant challenged this notification in a writ petition before the High Court, and in light of an interim order, the appellants voluntarily deposited the disputed amount demanded for additional FAR charges while their writ petitions were pending.
Later, the DDA issued a notification exempting certain categories of institutions, including those with Income Tax Exemption, from additional FAR charges.
This prompted the disposal of the appellants’ writ petitions challenging the earlier notifications by the High Court.
One of the appellants sought interest on the deposited amount during the writ petition, which was denied by the High Court.
The other appellant also sought interest in a separate matter but did not succeed. Both cases were brought before the Supreme Court.
The appellants relied on various legal principles from previous court decisions, including principles from the Constitutional Bench decision in Central Bank of India vs. Ravindra & Ors., the principle of restitution, the maxim “Actus Curiae Neminem Gravabit” (An act of the court shall prejudice no one), and the principle applied in Food Corporation of India vs. M/s Seil Ltd. & Ors. They argued that these principles justified their claim for interest.
However, after careful examination of the facts and legal arguments, the Supreme Court concluded that none of these legal principles applied in this case.
The Court emphasized that the deposit made by the appellants was voluntary and did not involve any act of the court prejudicing them.
The notification imposing additional FAR charges was valid at the time of deposit, and the subsequent exemption was granted by the DDA itself. Therefore, the Court found no basis for the claim for interest during the pendente lite period.
Nevertheless, the Court noted that one of the appellants had initiated separate proceedings regarding the non-refund of the deposited amount for an extended period, and all contentions related to this issue were left open.
Similarly, the other appellant was advised to pursue its remedy for interest in appropriate proceedings. The Court also upheld the High Court’s decision to dispose of the contempt petition in one of the cases.
In conclusion, the Supreme Court denied the claim for interest on the deposited amount during the pendente lite period in both appeals, citing the specific circumstances and legal principles involved. It allowed the appellants to pursue their remedies in separate proceedings regarding the retention of the deposited money beyond the stipulated period.
Case Title: Lal Bahadur Shastri Educational Society & Anr. v. Delhi Development Authority & Ors., 2023 INSC 797