HINDUSTAN COPPER LIMITED Vs. BANK OF BAODA

JUDGEMENT

(1.) The Court : This is an application for modification and/or correction of the order dated 9th February, 1999 passed by a Division Bench presided over by Ruma Pal, J and Ansari J. (as Their Lordships then were). The appeal arose out of an order passed under section 9 of the Arbitration and Conciliation Act, 1996 by which the learned Trial Court passed an order dated 4th May, 1998 directing the appellant to return the two bank drafts both dated 8th January, 1998 to the bank for cancellation and the Branch Manager, Sayajigunj Branch of Bank of Baroda was directed to invest the money in a separate fixed deposit account free from any lien. It was further directed that the money shall remain to the credit of the arbitration proceedings and shall abide by the result of the arbitrator. The appellant/ petitioner preferred the appeal which was finally disposed of by a judgment and order dated 9th February, 1999. The Appellate Court came to a conclusion that the bank guarantee was unconditional and no case had been made out by the respondent No. 2 warranting an order restraining the bank from making payment under the bank guarantee. The Appellate Court was of the view that the ld. Trial Court had in effect granted injunction restraining enforcement of the two bank guarantees furnished in favour of the appellant/petitioner. After considering the submissions made on behalf of the parties, the appeal was allowed and the order dated 4th May, 1998 passed by the learned Trial Court was set aside.

(2.) The judgment dated 9th February, 1999 itself goes to show that pursuant to the order passed by the learned Trial Court on 4th May, 1998, the appellant/petitioner had in the meantime returned the bank drafts to the bank and the proceeds were invested by the bank in a separate account. The short and simple submissions of Mr. Roy Chowdhury appearing on behalf of the appellant/petitioner is that at the time of disposal of the appeal the Appellate Court should have provided in its order that the interest accrued to the fixed deposit should be made over to the appellant. This is a consequential order which should have been passed. There is no indication in the judgment that the Appellate Court intended to withhold the consequential relief. Omission to do so was really an inadvertent error on the part of the Court. No party should be made to suffer for the omission or error on the part of the Court. The bank has also written to the petitioner that the accrued interest shall be made over to the petitioner provided there is an order of Court to do so. It, therefore submitted that the order dated 9th February, 1999 should suitably be modified or a direction should be issued directing the respondent bank to pay the interest accrued upon the fixed deposit. In support of his submission he relied on a judgment of the Apex Court in the case of Mahijibhai Bhai vs. Patel Manibhai, reported in AIR 1965 SC 1477, wherein the following view was expressed:

(3.) In spite of service no one has appeared to oppose this application. We are of the considered opinion that there is a great deal of substance in the submission made by Mr. Roy Chowdhury. The appellant/petitioner returned the bank drafts pursuant to the order of the Trial Court. He had preferred the appeal. The Appellate Court has taken note of the situation and thereafter has set aside the order passed by the Trial Court, After the appeal was allowed and the order passed by the Trial Court was set aside, the bank appears to have paid the principal amount to the appellant/petitioner but has not paid the interest accrued upon the deposit made pursuant to the order of the Trial Court which, in our view, should also have been paid to the appellant. The bank cannot retain the money which was lawfully due to the appellant. The interest earned by the bank is really the money had and received by them to the benefit of the appellant. Therefore, allowing the money to remain with the bank would result in unjust enrichment which should be avoided. It is really on the basis of the theory of unjust enrichment that restitution is directed. If any authority is needed for this view, reference may be made to the judgment in the case of South Eastern Coal Fields Limited vs. State of M.P. (SC) & Ors. reported in 2004(1) ICC 173 wherein it was held that unjust impoverishment as well as unjust enrichment is a ground for resitution. In the self-same judgment as regards remedy to a litigant in a situation arising out of an inadvertent error or omission on the part of the Court. Their Lordships held as follows: