COLLECTOR OF AHMEDABAD Vs. LAVJI MULJI

JUDGEMENT

(1.) The question for determination in this case is whether interest ought to be allowed to Government on the moneys which, having been deposited by them in the District Court, were withdrawn by the claimant under the award in his favour made by that Court under the Land Acquisition Act but reversed in appeal by this High Court. The learned District Judge has held that Government are not entitled to interest on the ground that the award of interest, is in the discretion of the Court; and that having regard to the decision of this Court which, in reversing the award of the District Court, directed each party in the acquisition proceedings to bear his own costs, it must be presumed that this Court did not intend the sum wrongly withdrawn by the claimant to carry interest with it. Undoubtedly the award of interest is generally speaking a matter of the Court s discretion except where by law it is made obligatory. And the question is whether in the circumstances of the present case it is reasonable to award interest. It is a rule of law that where a party has wrongly taken from the Court moneys deposited in Court by his opponent, that Court has inherent power to enforce a refund of the amount with interest: see MookoondLal Pal v. Mahomed Sami Meah (1887) I.L.R. 14 Cal.484, 486 and Govind Vaman v. Sakharam Ramchandra (1878) I.L.R. 3 Bom. 42, 43. In the present case the amount which was deposited with the Court by Government was taken away by the respondent because that amount had been settled by that Court to be the amount of compensation to which the respondent was entitled under the Land Acquisition Act. The High Court in appeal reduced the amount to which the respondent was entitled. Under these circumstances the respondent must be held to have had the benefit of the money belonging to Government in excess of that to which the High Court held him to be entitled. That benefit is represented not only by the excess amount wrongly taken by the respondent from the District Court but also by the amount of interest which it carried with it.

(2.) It was urged before us that this being the case of an award under the Land Acquisition Act and not a decree, the right of restitution claimed by Government cannot rest on the section of the Code of Civil Procedure which allows a refund of moneys received by a judgment-creditor under a decree subsequently reversed or amended. But assuming that the Code does not apply, the decisions above cited show that the right rests on the inherent power of the Court to enforce the refund.

(3.) The order of the District Judge disallowing interest is set aside and Rs. 57-5-4 is awarded to Goverment as interest on the amount of Rs. 538-0-3.