Summary
The Court sustained interest relief against the Gujarat Maritime Board for arbitrarily withholding a shipbreaking-plot allottee’s refund while refunding similarly placed allottees after litigation. It corrected the commencement date: interest on the principal consideration ran from 22 March 1995, when it was paid, rather than the earlier earnest-money date. The contractual setting did not excuse the public body’s discriminatory inaction.
Issues
- Whether the Board’s conduct justified the interest award and from what date interest on the principal consideration should run.
Provisions considered
- Article 226, Constitution of IndiaSustained relief in the contractual refund dispute on the particular record of arbitrary and discriminatory conduct by a public body. (¶¶ 32, 33, 34, 35, 36, 37, 40)
Held
- Although the allottee knew the site’s condition when bidding, the successful bidders expected usable plots within a reasonable time. The Board neither cleared the beachfront rocks nor meaningfully responded to the allottee’s requests, including its offer to arrange clearance at the Board’s expense. (¶¶ 25, 26, 27, 30, 33, 34, 35)
- The claim was essentially monetary and ordinarily contractual, but the Board remained bound to act fairly as a state instrumentality. Its unexplained refusal to refund without litigation, despite refunding similarly placed concerns that went to court, was arbitrary and discriminatory and justified relief on these facts. (¶¶ 31, 32, 33, 35, 36, 37, 40)
- Interest on the entire principal could not begin with the earlier earnest-money deposit because the principal consideration was paid later. The operative direction required interest on Rs.3,61,20,000 from 22 March 1995 to 19 May 1998, correcting the High Court’s starting date of 8 November 1994. (¶¶ 41, 42)
Result
Appeal dismissed subject to modifying the commencement date for interest on the principal to 22 March 1995; the endpoint remained 19 May 1998. The remainder of the High Court’s relief stood.