Dr. Poornima Advani & Anr. vs Government of NCT & Anr.

Held: The subject General Mandamus is a salutary advancement of the law, calculated to insulate and protect a citizen from unfair treatment by the State – Referring to Authorised Officer Karnataka Bank v. M/s R.M.S. Granites Pvt. Ltd. & Ors. in Civil Appeal No. 12294 of 2024, held that when a person is deprived of the use of his money to which he is legitimately entitled, he has a right to be compensated for the deprivation which may be called interest or compensation – Interest is paid for the deprivation of the use of money in general terms which has returned or compensation for the use or retention by a person of a sum of money belonging to other – Referring to Secretary, Irrigation Department, Government of Orissa v. G.C. Roy, (1992) 1 SCC 508, it was noted that a person deprived of use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name – Reference being made to Riches v. Westminister Bank Ltd., 1947 (1) ALL ER 469 wherein it has been held that interest is a payment, which becomes due because the creditor has not had his money at the due date – It may be recorded either as representing the profit he might have made if he had had the use of the money, or, conversely, the loss he suffered because he had not that use. [Paras 15, 17, 20, 21]

Doctrine of restitution – Interest necessary corollary of doctrine of restitution – Discussed:

Held: If doctrine of restitution is attracted, interest should follow – Restitution in its etymological sense means restoring to a party on the modification, variation or reversal of a decree or order what has been lost to him in execution of decree or order of the Court or in direct consequence of a decree or order – The term “restitution” is used in three senses, firstly, return or restoration of some specific thing to its rightful owner or status, secondly, the compensation for benefits derived from wrong done to another and, thirdly, compensation or reparation for the loss caused to another – Principles of restitution discussed in O.N.G.C. Ltd. v. Commissioner of Customs Mumbai, JT 2007 (10) SC 76 referred. [Paras 25, 27]

Principle of compensation – When the collection is illegal, the amount so collected to be refunded with interest – Discussed: Held: Reference being made to Union of India through Director of Income Tax v. Tata Chemicals Ltd., (2014) 6 SCC 335, wherein it was held that when the collection is illegal, the Revenue is obliged to refund such amount with interest as money so deposited was retained and enjoyed by it – No discrimination can be shown between the assessee and Revenue in paying interest on the refund of tax – Money received and retained without right, carries with it the right to interest – Obligation to refund money received and retained without right implies and carries with in the right to interest. [Para 29]