Bombay High Court
Wizcraft Entertainment Agency ... vs Mumbai Grahak Panchayat on 7 May, 2021
Bench: G. S. Kulkarni
23-IAL-9554-21-WP2338-96.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (LODG) NO.9554 OF 2021
IN
WRIT PETITION NO.2338 OF 1996
Wizcraft Entertainment Agency Pvt.Ltd. ...Applicant
In the matter between
Mumbai Grahak Panchyat ...Petitioner
versus
State of Maharashtra ... Respondent
----
Dr.Milind Sathe, Senior Advocate with Mr.Rohaan Cama with Mr.Aditya
Udeshi, Mr.Sanjay Udeshi i/b. Sanjay Udeshi & Co., for the Applicant.
Dr.Uday Warunjikar i/b. Mr.Sumit Kate, for the Original Petitioner.
Ms.Geeta Shastri, Additional Govt. Pleader, for the State.
.....
CORAM :- DIPANKAR DATTA, CJ &
G. S. KULKARNI, J.
DATE :- MAY 07, 2021
PC :
1. The applicant is respondent no.4 in the above writ petition,
filed by the original petitioner-Mumbai Grahak Panchayat (for short
"the MGP"). The petition was filed in public interest, interalia
challenging an order dated October 19, 1996 of the Government of
Maharashtra granting an exemption to respondent no.4-applicant from
payment of entertainment duty and surcharge in relation to a
programme of a foreign singer namely the "Micheal Jackson Show" held
by the applicant in Maharashtra.
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2. This Court, in proceedings of the present writ petition and
in the proceedings instituted by one Mohan Prasad Tripathi before the
Nagpur Bench of this Court, passed certain interim orders directing the
applicant to deposit an amount of Rs.4 crores. The applicant being
aggrieved by such orders, approached the Supreme Court in Special
Leave Petition (Civil) no.22602 of 1996. In such proceedings, the
Supreme Court, in its order dated November 18, 1996 observed that the
interim directions of this Court were sufficient to take care of any
liability of the applicant towards the entertainment tax, and held that
the Collector subject to deducting a sum of Rs.4 crores and depositing
the same in this Court would lift the attachment of the applicant's bank
accounts qua the balance amounts lying in the said accounts. A further
order came to be passed by the Supreme Court on November 22, 1996
modifying the order dated November 18, 1996, thereby directing that
the amount of Rs.4 crores as mentioned in the order dated November
18, 1996, shall be substituted by Rs.3,33,76,000/- since such amount
would satisfy the duty liability, in the event the State Government's
order granting exemption is struck down. In pursuance of such order of
the Supreme Court, the State Government deposited an amount of
Rs.3,33,76,000/- in this Court on January 27, 1997.
3. A co-ordinate Bench of this Court (Coram:D.K.Deshmukh &
Anoop V.Mohta, JJ.) disposed of MGP's petition by its judgment and
order dated April 13, 2011 whereby the Government's order dated
October 19, 1996 impugned in the petition, granting exemption from
payment of entertainment duty, was set aside. The Court however
directed the State Government to reconsider the application of the
applicant/ respondent no.4 dated September 27, 1996 for grant of an
exemption in accordance with law and in the light of the observations
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made in the said judgment, after an opportunity of a hearing was
granted to the parties. Such application was directed to be disposed of
by a reasoned order. In paragraph 9(v) of the said order, the Court
directed that the amount which stood deposited in this Court, shall
continue to so lie, and permitted the State Government to make an
appropriate order in relation thereto while disposing of the applicant's
application dated September 27, 1996.
4. In pursuance of the directions of this Court in the said final
orders dated April 13, 2011, the State Government, after hearing the
parties, has now taken a decision that the applicant was eligible for
exemption from payment of entertainment duty and surcharge, under
the Government Resolution prevailing at the relevant time, as held by a
reasoned order/ Government Resolution dated February 8, 2021. The
State Government also held that it had no objection for return of the
amount of Rs.3,33,76,000/- to the applicant.
5. Consequent to the decision of the State Government,
recording its approval for return of the said amount to the applicant,
the Advocate for the applicant by his letter dated February 12, 2021
addressed to the Prothonotary and Senior Master of this Court, prayed
that the principal amount of Rs.3,33,76,000/- alongwith the accrued
interest be refunded to the applicant. Details of the bank account for
making of such deposit were also furnished by the applicant. The
learned Prothonotary and Senior Master, however, informed the
applicant's Advocate, that the applicant needs to move an application
before this Court, seeking release of the amount deposited. In these
circumstances, the applicant has filed the present application praying
that the Prothonotary and Senior Master be directed to immediately
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release to the applicant, the amount of Rs.3,33,76,000/- alongwith
interest accrued thereon.
6. On April 27, 2021 we adjourned the hearing of this
application by directing the Prothonotary and Senior Master, to make a
report in regard to the interest accrued on the principal amount. In
pursuance of our directions a report dated May 3, 2021 is made by the
Prothonotary and Senior Master, that the principal amount was invested
in a fixed deposit with the State Bank of India, Mumbai, Main Branch,
which was renewed from time to time. It is recorded that the accrued
interest on the principal amount is Rs.12,33,66,033/- as on May 3,
2021. It is stated that the maturity value of the current fixed deposit as
it stands, as on August 25, 2021 is Rs.15,97,05,946/-. It is stated that
the fixed deposit can be prematurely encashed, in which case, the
amount payable may vary considering the interest penalty, which may
be applied separately.
7. We have heard Dr.Sathe, learned Senior Counsel for the
applicant, Dr.Warunjikar, learned Counsel for the MGP and Ms.Shastri,
learned Additional Government Pleader for the State.
8. Dr.Warunjikar has an objection on the applicant
withdrawing the interest amount. It is his submission that the
Government Resolution February 8, 2021 although is in favour of the
applicant which exempts the applicant from any duty liability, in
paragraph no.2 of the Government Resolution the State Government
has recorded its no objection for refund of only the principal amount
and not the interest amount and the applicant too has accepted such
position without challenging the said resolution. Dr.Warunjikar would
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next submit that MGP intends to challenge the Government Resolution
dated February 8, 2021. It is his submission that for such reasons this
Court ought not to permit the applicant to withdraw the interest
amount.
9. We do not agree with any of these contentions of
Dr.Warunjikar, for reasons which we record.
10. It is not in dispute that in pursuance of the orders passed
by the Supreme Court as noted above, an amount of Rs.3,33,76,000/-
from the applicant's account came to be deposited in this Court. This
amount was subject to such order which would be passed by this Court
in disposing of the writ petition. The writ petition was disposed of
directing the State Government to take a decision on the issue of
exemption and at the same time, directed that the amount shall remain
deposited in this Court till such decision is taken. This Court also left it
to the State Government, to pass an appropriate order in relation to the
said deposit. Such amount on its deposit was invested by the
Prothonotary and Senior Master in a fixed deposit which has accrued
interest as noted by us above. As the State Government has decided the
applicant's application dated September 27, 1996 in favour of the
applicant, thereby holding that the applicant was entitled for exemption
from payment of entertainment duty, admittedly there exists no liability
for payment of such duty by the applicant. The State Government has
also accorded its approval to enable the applicant to seek withdrawal/
refund of the amount from this Court, although in granting such
approval no reference is made to the interest, possibly for the reason
that it was none of the concern of the State Government when the
amounts stood deposited in this Court. Hence the State Government
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has conveyed its approval only for the release of the principal amount in
favour of the applicant.
11. In these circumstances, in our opinion, Dr.Sathe is right in
his contention that as the applicant is entitled for refund of not only the
principal amount of Rs.3,33,76,000/- but also to the accrued interest on
such amount. In support of such submission, Dr.Sathe's reliance on the
decision of the Supreme Court in "South Eastern Coal Fields Ltd. Vs.
State of M.P. & Ors." [(2003)8 SCC 648] is apposite. In this case, the
Supreme Court has recognized the principle of restitution as statutorily
recognized by Section 144 of the Code of Civil Procedure,1908, in its
application to return or restoration of a specific thing to a rightful
owner. Referring to the observations in Jai Berham Vs. Kedar Nath
Marwari (AIR 1922 PC 269) wherein their Lordships of the Privy
Council held that it is a duty of the Court under Section 144 of the Civil
Procedure Code to place the parties in the position which they would
have otherwise occupied, but for such decree or such part thereof as has
been varied or reversed. Also referring to the observations of Cairns,
L.C. in Rodger V. Comptoir D'Escompte de Paris [(1871)3 PC 465] that
one of the first and highest duty of the Court is to take care that the act
of the Court does no injury to any of the suitors, it was held that no one
shall suffer by an act of the Court which embraces within its sweep all
such acts, to which the Courts may form an opinion, in any legal
proceedings, and there is nothing wrong, in the parties demanding
being placed in the same position in which they would have been, had
the Court not intervened by its interim order. It was also held that once
the doctrine of restitution is attracted the interest is often a normal
relief given in restitution.
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12. Dr.Sathe would also be correct in his contention that by
virtue of the decision of the State Government as contained in the
Government Resolution dated February 08, 2021, the status of such
deposit is of money received and retained without right and carrying
with it the right to interest. The Supreme Court in Union of India
through Director of Income Tax Vs. M/s.Tata Chemicals Ltd. (Civil
Appeal No.6301 of 2011) although in the context of the Income Tax Act
and in relation to a statutory deduction of tax at source, has held it to
be a well recognized principle that whenever money is received by a
party which ex aequo et bono (in justice and good faith) is to be
refunded, the right to interest follows, as a matter of course. It is
manifest that in the present case, the principal amount as deposited on
the applicant's account did not bear the character of a tax or duty and it
was merely deposited as directed by this Court on a fortuitous
circumstance of a tax liability. Once the tax liability on the applicant
was non-existent, the entire principal amount along with the interest
accrued thereon belonged to the applicant.
13. The principle of law as discussed above squarely applies in
the present facts. The applicant suffered an order of deposit of an
amount of Rs.3,33,76,000/- as directed by this Court. Admittedly, when
the principal amount has become due and payable to the applicant, the
accretion to it by way of interest also would rightfully belong to the
applicant. MGP in no manner, much less on contentions as urged by
Dr.Warunjikar, can obstruct refund of the said amount alongwith the
accrued interest to the applicant. Neither the MGP nor the State
Government can have any claim on such amounts. The applicant,
therefore, would become entitled to the reliefs as prayed for.
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14. For all these reasons, we allow this application in terms of
prayer clause (a). The Prothonotary and Senior Master is directed to
take steps to make payment of the said amounts to the applicant within
two weeks from today.
15. All contentions of the parties on the Government
Resolution dated February 8, 2021 are kept open.
(G. S. KULKARNI, J.) (CHIEF JUSTICE)
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