Case Note & Summary
The petitioners, M/s R.K. Jewellers (a partnership firm) and M/s N.B. Exports (a proprietary concern), filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court. The petition challenged an order dated 28th February 2001 passed by the Special Director of Enforcement under the Foreign Exchange Regulation Act, 1973 (FERA). The order directed the return of a sum of money seized from the petitioners' premises but did not consider the question of granting interest on that amount. The petitioners sought interest on the seized amount from the date of seizure until the date of return. The court, comprising Justices V.C. Daga and K.K. Tated, heard the matter and perused the petition. The court noted that the impugned order failed to address the issue of interest. Relying on principles of restitution and equity, the court held that when the State seizes and retains money belonging to a citizen and later returns it, the citizen is entitled to interest for the period of deprivation. The court allowed the petition and directed the respondents to consider and grant appropriate interest on the seized amount. The judgment emphasizes that the power under Article 226 can be invoked to remedy such injustice even if the statute does not expressly provide for interest.
Headnote
A) Constitutional Law - Writ Jurisdiction - Article 226 of the Constitution of India - Interest on Seized Amount - Petitioners challenged order of Special Director of Enforcement returning seized amount without interest - Court held that when money is seized and retained by the State and later returned, the owner is entitled to interest as a matter of restitution and equity - Held that the authority must consider grant of interest on the amount seized and returned (Paras 2-5).
Issue of Consideration
Whether the petitioners are entitled to interest on the amount seized from their premises under FERA and returned without interest.
Final Decision
The court allowed the writ petition and directed the respondents to consider and grant appropriate interest on the seized amount returned to the petitioners.
Law Points
- Interest on seized amount
- Restitution
- Equity
- FERA
- Article 226
