TMI Blog1964 (7) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... registered firm carrying on business on commission agency and independently in certain commodities. It was assessed to a tax of Rs. 7,248-6-2 on its business for the year 1945-46. In a suit filed by the firm, O.S. No. 111 of 1952, the said levy was held to be illegal. After the said declaration by the Court, the amount, which was collected, was refunded together with interest from the date of such pronouncement. The present suit was laid claiming interest on the amount collected at 6 per cent. per annum from the date of collection, to writ, 26th September, 1949, to 25th February, 1954, when the levy was declared illegal. In plaint para. 8, it is alleged thus: "The plaintiff is entitled to the said interest under law as well as by way of damages for being deprived of the use of its money illegally collected by the State....." The plaintiff's claim for interest under the said circumstances could not be rested on any law as such providing for interest. Reference has been made to the Interest Act (32 of 1839), the relevant provision whereof is as under: "Section 1.-It is, therefore, hereby enacted that, upon all debts or sums certain payable at a certain time or otherwise, the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time granted interest in cases of debts on general grounds of justice; for example, in one case Lord Mansfiled held that a debt carried interest where there was long delay under vexations and oppressive circumstances'. In another case, Best, C.J., observed that the jury might give interest 'in the shape of damages for the unjust detention of the money.' This view of the law was not approved in later cases and interest was refused in cases of debts on any such broad equitable grounds. It was with the object of relaxing this law by statute, that Lord Tenterden's Act was passed. But the new rights created under that Act were within very narrow limits-too narrow indeed, as is pointed out by Lord Herschell, for the purposes of justice..... I am therefore clearly of the opinion that, under the proviso, the plaintiffs cannot claim interest on what are known as general equitable grounds. [1930] I.L.R. 53 Mad. 549 at p. 561." The pertinent observations in this judgment have been relied on by our learned brother and we think quite rightly. Manifestly this case did not recognise any claim to interest on what are known as general equitable grounds. We may also refer to Bengal Nagpur Railwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor and a debtor cannot apply. We may also notice that in Nanchappa Goundan v. Vatasari Ittichathara Mannadiar[1930] I.L.R. 53 Mad. 549 at p. 570., Justice Madhavan Nair (as he then was) observed as follows: "When we propose to apply equitable considerations in deciding the question whether a party may be awarded interest we have to ask ourselves the question whether a court of equity in such a case would usually award interest and unless a particular case falls within the well-recognised class of cases in which interest is demandable in equity, the Indian courts, in my view, have no power to award interest in such a case on equitable grounds. If the case is one in which courts of equity would ordinarily award interest, then, courts of law in this country, having the powers both of the courts of equity and of law, can also award interest on equitable consideration. This seems to me to be the true scope of the decision in Miller v. Barlow(1871) L.R. 3 P.C. 733. and understood in this light it is clear that that decision cannot be relied upon in support of the view that the plaintiff is entitled to interest in this case on broad equitable grounds; for, it is not shown that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the right to receive interest took the place of the right to retain possession. The learned Judges made reference to Bengal Nagpur Railway Co., Ltd. v. Ruttanji Ramji I.L.R. (1938) 2 Cal. 72. and adopted the view expressed therein. We are unable to see how this decision affords any assistance to the appellant. We are therefore unable to uphold the claim for interest on alleged general equitable grounds. The claim for interest by way of damages cannot be admissible in view of what the Privy Council had stated in Bengal Nagpur Railway Co., Ltd. v. Ruttanji Ramji(2). In that case, the Judges of the High Court had allowed interest by way of damages caused to the plaintiffs for the wrongful detention of their money by the railway. The Privy Council adopted the reasoning of the House of Lords in London Chatham and Dover Railway Co. v. South Eastern Railway Co.[1893] A.C. 429. Their Lordships also referred to the scope of section 73 of the Indian Contract Act. This is what was stated at page 78: "There is a considerable divergence of judicial opinion in India on the question of whether interest can be recovered as damages under section 73 of the Indian Contract Act, where it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under a duty to repair the injury done to a party by its act. It was observed that the principle of restitution was not confined to provisions of section 144 of the Civil Procedure Code. Where, for reasons stated by us, the relief claimed could not be given on general equitable grounds, we very much doubt whether relief could be given by way of restitution in the exercise of inherent powers under section 151 of the Civil Procedure Code. We find ourselves unable to accept this plea. The learned Government Pleader has invited our attention to Municipal Borough, Ahmedabad v. Vadilal Dalsukh RamI.L.R. (1944) Bom. 134. That was a case where the plaintiff sued to recover interest on drainage tax after he had obtained refund of the amount paid in respect of the tax, the levy having been pronounced to be illegal by court. There again the plaintiff advanced a claim for interest on the principle of justice, equity and goods conscience. The learned Judge repelled the claim and cited Bengal Nagpur Railway Co. Ltd. v. Ruttanji RamjiI.L.R. (1938) 2 Cal. 72. as opposed to that view. The learned Government Pleader has relied on this decision as in pari materia. The learned Government Pleader ..... X X X X Extracts X X X X X X X X Extracts X X X X
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