NIFTY CHEMICALS PVT. LTD. versus UNION OF INDIA

Citation: [2009] 3 S.C.R. 500 · Decided: 27-02-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

[2009) 3 S.C.R. 500 
( 
,_ -
A 
NIFTY CHEMICALS PVT. LTD. 
v. 
UNION OF INDIA 
(I.A. Nos. 1-2 in T.C. (Civil) No. 113 of 2005 etc.) 
B 
FEBRUARY 27, 2009 
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.] 
Refund - Of amount paid as per interim order- Litigation 
between coal suppliers and coal purchasers -
Over 
c enhanced amount demanded by supplier - Interim order 
directing the purchasers to pay 1!3rd of the enhanced amount 
-
- Supplier undertaking for refund of amount, if final decision 
passed against them - Final decision passed against the 
supplier - Applications and contempt petitions, seeking 
D refund and direction for payment of interest thereon till the 
• 
actual date of payment - Held: Coal purchasers are entitled 
to refund, with interest computed till the date refund payment 
was actually made. 
E 
Applicants {non-core linked consumes of coal) of the 
respondent-coal company {a susbsidiary of Coal India 
Ltd.) were getting supply of coal at fixed price {Notified 
price). After introduction of E-Auction Scheme, the non-
core linked consumers were required to pay the price as 
' 
F 
determined by market forces in place of the notified price. 
During pendency of the cases challenging 'E-Auction 
Scheme' it was directed by interim order passed by 
Supreme Court that the coal would be supplied to the 
coal consumers on their paying 113rd of the enhanced 
G price i.e. in addition to the notified price and on their 
furnishing security for the balance 2/3rd of the enhanced 
price. Coal India and its subsidiaries under-took that if 'E-
Auction Scheme' if not upheld consequently, they would 
refund the enhanced price of 113rd with interest thereon 
H 
500 
NIFTY CHEMICALS PVT. LTD. v. UNION OF INDIA 
501 
-'-• 
at 12% PA, from the date of payment. Thereafter, E-
A 
Auction scheme was quashed holding the same invalid 
and ultra vires Article 14 of the Constitution. The coal 
consumers filed contempt petitions alleging violation of 
the orders wherein the undertaking for refund of the price, 
over and above the notified price, was made. Thereafter, 
B 
present applications were filed seeking the refund as 
_ _. 
undertaken. They also sought interest on the amount 
already refunded not only upto 30.4.2008, but till the date 
of payment. Respondent-Company in its affidavit stated 
that it had released the refund payments to 118 parties c 
out of 122 parties. It also stated that it had no objection 
_,. 
to pay the interest on the amount till the date, the amount 
was actually refunded. 
~ 
Disposing of the applications and contempt D 
petitions, the Court 
HELD: 1. Since the applicants were refunded the 
extra amount deposited by them only on 28.6.2008 they 
are entitled to receive interest computed and calculated 
up to 28.6.2008 and not till 30.4.2008, for which there is 
E 
no basis at all. Interest is payable on the amount found 
due and payable on the ground that the concerned 
~ 
person is deprived of the benefit of the aforesaid amount 
-1 
which is otherwise due and payable to it. The intention 
is to compensate the concerned person for being 
F 
deprived of utilizing the money for the period during 
which he was unable to utilize the amount. Similarly, the 
extra amount which was paid by the applicants was 
invested in the fixed deposit receipt pursuant to the order 
of this Court. [Para 14] [509-G, H; 510-A] 
G 
2. Whatever interest was received by the coal 
company as against the FDR made on the amount 
( 
deposited by the applicants towards extra amount 
charged, may be paid back to the applicants. The 
aforesaid aspect could be settled between the parties, if H 
502 
SUPREME COURT REPORTS 
(2009] 3 S.C.R. 
.. •. 
A the coal company provides to the representatives of the 
applicants, the statement of the bank indicating the 
interest that actually accrued and was paid on the 
aforesaid FDR to the Respondent-Company, which was 
made against the extra payment made by the applicants. 
B [Para 15) [510-C, DJ 
CIVIL APPELLATE JURISDICTION : Transfer Case No. -
113 of 2005. 
)>. -
From the Judgment and Order dated 12.12.2005 in SLP 
c No. 20471 of 2005. 
M.L. Verma, Manish Kumar Saran, Jyoit Mendiratta, S. 
.,. 
Chandra Shekhar, Manish Pitale, Chander Shekhar Ashri, 
Manish Kumar Saran and Nirmal Kumar Ambastha for the 
D Petitioner. 
.. 
Anip Sachthey, Mohit Paul, Anil Katiyar, S.P. Singh, Kiran 
Bhardwaj, D.S. Mehra, Cp. Capt. Karan Singh Bhati, Sweta 
Rani, Rekha Giri, Ajit Kumar Sinha and V.K. Verma for the

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