TMI Blog2010 (5) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... -2010 - AJAY RASTOGI, J. Vinay Kumar Goyal for the Applicant. Shiv Garg for the Respondent. B.K. Sharma for the Official Liquidator. ORDER 1. Instant Misc. Application-123/2007 has been filed by M/s. Blooming Engineers (P.) Ltd. (Respondent-3 in Co. Appl. 79/2005) claiming interest over the amount of Rs. 2,30,65,000 (Rupees two crores, thirty lakhs sixty five thousand) deposited being highest bidder in auction proceedings initiated by Recovery Officer, Debts Recovery Tribunal, Jaipur, which have finally been set aside by this Court vide order dated 23-1-2007 in Co. Appl.-79/2005 and notice published in Rajasthan Patrika on 13-11-2005 for auction scheduled on 22-11-2005 and sale certificate dated 7-6-2006 were quashed; and the IDBI was directed to refund a sum of Rs. 2,30,65,000 to M/s. Blooming Engineers (P.) Ltd., (Applicant herein) - pursuant to which the amount ( supra ) was refunded vide pay order dated 12-2-2007 duly received on 16-2-2007. 2. Prayer made in this Misc. Application is basically for clarification sought for in Judgment dated 23-1-2007 rendered by this Court to the effect that the applicant is entitled for interest having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties, Co. Appl. No. 79/2005 was finally allowed vide order dated 23-1-2007; and auction notice and proceedings held on 22-11-2005 along with certificate of sale dated 7-6-2006 were quashed and set aside and the IDBI was directed to refund the amount having been deposited by present applicant and in pursuance whereof, respondent-IDBI refunded Rs. 2,30,65,000 vide banker s cheque dated 12-2-2007 received by applicant on 16-2-2007. Since the refund ( supra ) did not carry interest, the applicant has approached this Court by way of instant application, what has been prayed for is for clarification of judgment dated 23-1-2007 claiming interest as accrued on the purchase price deposited by the applicant with respondent-IDBI. 6. It is relevant to mention that order sheet drawn by Recovery Officer, DRT on 30-11-2005 and 7-12-2005 in auction proceeding, having been placed for perusal shows that amount received from auction purchase by Recovery officer was deposited in FDRs with IDBI, initially for 46 days but since it was never encashed, must have been renewed from time to time; and that apart, possession of auctioned property pursuant to auction sale was never handed over to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ably the applicant was the highest bidder in auction proceedings initiated by Recovery Officer, DRT held on 22-11-2005; full and final amount being deposited by auction purchaser (applicant) was placed in fixed deposits with IDBI initially for 46 days and pursuant to deposit of auction sale price, which was confirmed and certificate of sale was issued but possession of plant and machinery auctioned was never handed over to the applicant (auction purchaser); however, auction sale, itself, was set aside by this Court vide judgment dated 23-1-2007 in Co. Appl. 79/2005 - pursuant to which principal sum of auction sale price has been refunded to the applicant but the interest despite having yielded over the principal sum which remained lying in fixed deposit with IDBI till its refund, has not been paid along with the sum of refund in question, counsel submits that once the purchase price was directed to be refunded while setting aside the auction sale, itself, the applicant was also entitled for the interest accrued thereon; that being so, judgment of this court requires clarification in regard to the interest; and since no review of judgment was necessary, the relief can be granted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not kept in any deposit and was used to discharge outstanding debt, the applicant is entitled to get interest at the rate of 18 per cent per annum on the amount deposited by him. Apex court in Motors Investments Ltd. s case ( supra ) observed ad infra: "6. Shri Ganguli may be right in his contention that the appellant having deposited the money, should be suitably compensated and no direction has been given by the Division Bench in that behalf. In the event of any subsisting liability against the estate of the respondent Nos. 2 and 3, to discharge any debts, it may be open to the official assignee to bring such part of the properties which may be sufficient to discharge the liability, to sale by public auction either by inviting tenders or through appropriate procedure under order XXI of the CPC and then to conduct the sale in accordance therewith. In case the official assignee has kept Rs. 77,500 in any interest earning security, the principal amount together with interest is directed to be refunded to the appellant. In case the amount was not kept in any deposit and was used to discharge outstanding debt due by respondent Nos. 2 and 3, the appellant is entitled to get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haser was put in fixed deposits with the respondent-IDBI, which remained lying in deposits till its refund pursuant to the order of Court. Thus, indisputably the respondent-Bank has earned interest on the sale price deposited by the applicant which makes him entitled for compensation in regard to the use of money which the auction purchaser was deprived of. 20. Apex Court in Aklu Ram Mahto v. Rajendra Mahto AIR 1999 SC 1259 has also examined scope of section 29 of Arbitration Act, 1940 relating to the interest on Award vis-a-vis section 34, CPC and in para 2 it was observed ad infra : "2. There are four stages of grant of interest. Firstly, from the stage of accrual of cause of action till filing of the arbitration proceedings; secondly, during pendency of the proceedings before arbitrator; thirdly, future interest arising between date of award and date of the decree; and fourthly, interest arising from date of decree till realisation of award." Finally it was observed that as regards Award of interest under section 34, CPC, it is a matter of procedure and ought to be granted in all cases when there is a decree for money unless there are strong reasons to decline th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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