DRAVYA FINANCE PVT. LTD. & ANR. versus S.K. ROY & ORS.

Citation: [2016] 5 S.C.R. 835 · Decided: 26-10-2016 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Disposed off

Judgment (excerpt)

[2016] 5 S.C.R. 835 
DRAVYA FINANCE PVT. LTD. & ANR. 
A 
v. 
S.K. ROY & ORS. 
(Review Petition (C) No.3538 of2016 in Civil Appeal No. 8543 of 
2009) 
B 
OCTOBER 26, 2016 
[ANIL R. DAVE, SHIVA KIRTI SINGH AND 
R. BANUMATHI, JJ.] 
Review petition - Interest - Calculation and payment of interest 
by LIC to finance company - Date of payment of interest - On 
facts, acceptance of life insurance policies by petitioner-banking 
finance company as collateral security through assignment of 
insurance policies by borrower in favour of petitioner - Issuance 
of circulars by LIC for putting restrictions on assignment of 
insurance policies - Challenge to - Said circulars quashed by High 
Court - However, no order passed for grant of any interest - Filing 
of SLP by LIC ~ Interim order passed in favour of LIC whereby 
petitioners could get only temporary registration of assignment in 
its favour but could not file any death claim or maturity claim during 
the pendency of the appeal - Subsequently pronouncement of final 
order - Provisional registrations made permanent and interim orders 
recalled - LIC to pay interest at the prevailing bank rate (without 
penal interest) as per relevant provisions - Thereafter, filing of 
contempt petition against LIC - Said petition treated as limited review 
petition in view of the apparent omission in 4he final order in not 
mentioning as to from what date, LIC was liable to pay interest -
Date from which interest to be calculated and paid by LIC to the 
petitioners in terins of final order - Held: Interest would be payable 
only on or after the date of pronouncement of interim order by this 
Court imposing certain restrictions on the petitioners' right to lodge 
death claims or maturity claims for appropriate amounts - LJC to 
pay interest at the prevailing bank rate (without penal interest) from 
30 days after the date of death or date of maturity relating to the 
life insurance policy concerned or from the date of pronouncement 
of interim order, whichever is later. 
835 
c 
D 
E 
F 
G 
H 
836 
SUPREME COURT REPORTS 
[2016] 5 S.C.R. 
A 
CIVIL APPELLATE JURISDICTION: Review Petition (C) No. 
B 
c 
D 
3538 of2016 in Civil Appeal No. 8543 of2009. 
From the Judgment and Order dated 23.04.2007 of the High Court 
of Judicature of Bombay at Mumbai in Writ Petition No. 3282 of2004. 
Shyam Divan, Sr. Adv., Nirman Sharma, Puneet Singh Bindra, 
Aslam Ahmed, Rohan Kaushal, Advs. for the Appellants. 
Mukul Rohatgi, AG, Ashok Panigrahi, Surajit Bhaduri, Santosh 
Kumar, Ad vs. for the Respondents. 
The Judgment of the Court was delivered by 
SHIVA KIRT! SINGH, J. 1. Heard learned counsel for the 
parties. 
2. Although this petition is labelled as a contempt petition arising 
out of Civil Appeal No.8543 of 2009, by order dated 261h September, 
2016, the contempt proceedings were closed and th\: petition is now 
being treated only as a limited review petition for answering a short but 
significant question as to from what date, the interest needs to be 
calculated and paid by the LIC to the petitioners in terms of final order 
dated JO•h December, 2015 in Civil Appeal No.8543 of2009. The last 
E 
but one paragraph of the Order dated 1 O•h December, 2015 is relevant 
for appreciating the issue relating to interest indicated above. That 
paragraph runs as follows :-
"It is further clarified that in view of the disposal of this Appeal, in 
the circumstances mentioned above, the Appellant will be liable 
F 
to pay interest at the prevailing Bank rate (without penal interest) 
as per Section 8 sub-section (5) of the Insurance Regulatory and 
Development Authority (Protection of Policy Holder Interest) 
Regulations, 2002. The disposal of this Appeal is witho,ut prejudice 
to other Appeals in which arguments have been closed." 
G 
3. It will also be apposite to extract the Order passed in this case 
H 
on 26•h September, 2016 which is as follows :-
"On hearing the parties, we find that the order passed by this 
Court on 1 o•h December, 2015 in C.A.No.8543 of2009 has been 
substantially or may be fully complied with except that a dispute 
DRAVYA FINANCE PVT. LTD. & ANR. v. S.K. ROY & ORS. 
[SHIVA KIRTI SINGH, J.] 
has arisen with regard to interpretation.of observations made at 
the end of that Order relating to payment of interest at the prevailing 
bank rate. The dispute requires an answer as to the 'the date' 
from which the interest should be calculated. 
In our considered opinion, this dispute raises questions

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