SCA/14088/2008 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 14088 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= THE STATE TRANSPORT EMPLOYEES COOPERATIVE CREDIT AND THRIFT - Petitioner(s) Versus GUJARAT STATE ROAD TRANSPORT CORPORATION & 1 - Respondent(s) ========================================================= Appearance : MR SHIRISH JOSHI for Petitioner(s) : 1, MS SEJAL K MANDAVIA for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 12/12/2008 ORAL JUDGMENT 1. Rule. Ms.Mandavia, learned Counsel for SCA/14088/2008 2/6 JUDGMENT respondents wavies service of notice of Rule. With the consent of the learned Counsel appearing for both the sides, the matter is finally heard today. 2. The petitioner, by this petition, has prayed for relief, inter alia, to direct respondents to pay up over-due amount with interest as claimed by the petitioner Society as per the statement produced at Annexure – H. It is also prayed by the petitioner to direct the respondents to send and forward the amount of monthly instalments on regular basis. 3. Pursuant to the notice issued by this Court, the learned Counsel for the petitioner has placed on record the letter dated 10.12.2008 that all arrears of the amount, which was deducted from the salary of the respondent employees are deposited with the petitioner credit society and no amount is yet to be deposited. Therefore, the grievance on the part of the petitioner to that extent would get satisfied. 4. However, Mr.Joshi, learned Counsel for the petitioner submitted that the prayer is also SCA/14088/2008 3/6 JUDGMENT made for directing respondent Corporation to pay interest and even in past also when such instances had arisen, this Court (Coram: D.N.Patel, J.) in Special Civil Application No.18875 of 2005 awarded interest at the rate of 11% per annum, another Bench of this Court (Coram: Akil Kureshi, J.) in Special Civil Application No.21180 of 2005 has awarded interest at the rate of 10% per annum, and vide order dated 3.5.2007 in Special Civil Application No.26421 of 2006 this Court (Coram: D.A.Mehta, J.) ordered interest at the rate of 9% per annum and, therefore, it was submitted that this Court may also direct the Corporation to pay the interest. 5. Ms.Mandavia, learned Counsel for the respondent Corporation resisted the prayer for payment of interest on the ground that due to constraining circumstances of financial crisis the amount could not be deposited. It was, therefore, submitted that the interest may not be ordered by this Court. 6. As such the amount once deducted from the salary SCA/14088/2008 4/6 JUDGMENT of the employees concerned, it is required to be deposited with the petitioner, since the amount held by the Corporation is in trust for depositing with the petitioner. It hardly lies in the mouth of the respondent Corporation to contend that no interest will be paid even by way of compensatory measure, more particularly when earlier this Court in the aforesaid three decisions has awarded interest. Even if the prevailing bank rate of interest is considered, it would be required for the respondent Corporation to pay interest to the petitioner at the rate of 9% per annum for the delayed period. 7. It deserves to be stated that even if a public Corporation has unauthorisedly retained the amount, and the aggrieved party has approached this Court, while directing the payment for the release of such unauthorised amount, interest in normal course is required to be considered by way of compensatory measure, if not a measure by penalty. Had it been the case of imposing penalty, it may attract more interest, but if the matter is considered by way of compensatory SCA/14088/2008 5/6 JUDGMENT measure, the interest, in any case, would be required to be paid as per prevailing bank rate. The obvious reason for such purpose is that the Corporation has enjoyed the money during the period of unauthorised retention and the petitioner is deprived of the money during such period. No further discussion is required, more particularly in view of the earlier orders passed by this Court of directing deposit of the amount of contribution with interest. 8. Hence, considering the facts and circumstances, it appears that it would be just and proper to direct the respondent Corporation to pay simple interest at the rate of 9% per annum for the delayed period to the petitioner. Such amount shall be calculated and the same shall be deposited within a period of four weeks from the date of receipt of the order of this Court. 9. Before parting with the petition, it further deserves to be observed that the Managing Director of the Corporation shall ensure that there is no laxity on the part of the Corporation in depositing the amount well in SCA/14088/2008 6/6 JUDGMENT time, nor the situation shall be created compelling the petitioner to approach every time before this Court by filing similar petition. The conduct of the Corporation, in view of the earlier three litigations, shows that the matter is considered in a cavalier manner, without understanding the seriousness of the liability of interest. Therefore, it is further directed that the Managing Director of the Corporation shall ensure by suitable instructions that no laxity is shown by the concerned branch of the Corporation in depositing the amount of the employees' contribution well in time with the petitioner. 10.The petition is allowed to the aforesaid extent. Rule made absolute accordingly. No order as to costs. 12.12.2008 (Jayant Patel, J.) vinod