BROADWAYS OVERSEAS LTD. Vs. CENTRAL EXCISE

JUDGEMENT

(1.) THE Central Excise, Division No. 1 of the Jalandhar Division through its Assistant Commissioner issued a public notice as proclamation of sale of plot measuring 175 Marlas situated in Village Raipur Rasulpur, which was the premises of M/s. Santosh Rubber and Allied Industries on account of dues to it. It was categorically averred in the schedule of the public notice that there was no encumbrance on the property whatsoever. In response to this public notice, the petitioner participated and sent his quotation on 3.1.2009 alongwith a pay order of Rs. 6,60,0000/ - towards 10% of reserve price. The sealed bids were opened on 9.1.2009 when the petitioner was found to be a successful bidder having made a bid of Rs. 70 lacs. The petitioner immediately on the same day deposited an amount of Rs. 10,90,000/ - so as to ensure that 25% of the bid amount totalling to Rs. 17,50,000/ - as deposit with respondent No. 1.

(2.) THE petitioner received a legal notice dated 14.1.2009 soon thereafter on behalf of respondent No. 2 -Bank claiming that the property was mortgaged with the said bank and that recovery proceedings were pending before the DRT, Chandigarh for a sum of Rs. 1,57,25,035/ - due as on 30.4.2007 and the property was mortgaged as security for the loan. The petitioner replied to the said notice on 19.1.2009 through counsel expressing ignorance about the first charge of the bank and having acted on the basis of the assurances held out by respondent No. 1 in their auction notice. The petitioner naturally also served a notice upon respondent No. 1 on the same date calling upon the said respondent to either get the property cleared from the bank within 15 days or in the alternative to refund the entire amount of Rs. 17,50,000/ - alongwith 18% interest. The reply of respondent No. 1 was, however, received only through a communication dated 19.3.2009 stating that as per the revenue records, title of the property was clear and there was no stay at the time of auction with regard to sale of the property. It was further stated that since the matter was sub -judice in terms of interim order dated 22.1.2009, no unilateral action can be taken by the department. The petitioner thus, found itself in a predicament where neither the property was being transferred to him on payment of balance sale amount nor was the amount being refunded as was deposited with respondent No. 1 despite repeated representations including dated 5.8.2009 and 18.6.2009. In these circumstances, the petitioner has filed the present writ petition under Articles 226 and 227 of the Constitution of India seeking a direction against respondent No. 1 to refund the amount of Rs. 17,50,000/ - being 25% bid amount alongwith interest at the rate of 18% per annum.

(3.) IN view of the aforesaid, there is really no dispute that a sum of Rs. 17,50,000/ - has to be refunded to the petitioner. However, the question is whether the petitioner is entitled to interest on the amount and if so at what rate?