Patna High Court
Trustees (Central Board) Employees Provident Fund Organization,versusM/s The Longia Bidi Company,
- Decided
- Disposal
- DISMISSED
Holding
The Court upheld the single‑judge’s order directing the EPF authority to pay simple interest at 6 % per annum on Rs 10,12,692, finding no perversity and applying the doctrine of unjust enrichment.
Summary
The Central Board of Trustees Employees Provident Fund Organisation appealed a single‑judge order that directed the EPF authority to pay simple interest at 6 % per annum on Rs 10,12,692 deposited by M/s Longia Bidi Co. in compliance with a 2009 court order. The petitioner argued that the amount, held by the EPF for over ten years after the appellate tribunal set aside the original assessment, should be refunded with interest, invoking the doctrine of unjust enrichment. The respondents contended that no statutory provision mandated interest and that the delay was not attributable to them. The Court examined the principles of unjust enrichment, cited several Supreme Court decisions, and noted the eleven‑year delay in passing the final assessment was unreasonable. It held that the single‑judge’s direction to calculate and pay interest was justified and not perverse, and therefore dismissed the Letters Patent Appeal. The EPF authority was ordered to pay the interest calculated from 2 June 2011 to the date of actual payment.
Issues considered
- Whether the petitioner is entitled to interest on the amount of Rs 10,12,692 deposited under Section 7‑O of the Employees’ Provident Funds Act and retained by the EPF authority for over ten years.
- Whether the doctrine of unjust enrichment applies to compel the EPF authority to refund the amount with interest.
- Whether the Letters Patent Appeal can be set aside on the ground of perversity or lack of statutory basis for interest.
Legislation cited
- Code of Civil Procedure, 1908 — s. 34
- Employees' Provident Funds and Miscellaneous Provisions Act, 1952 — s. 21, 7(A), 7(I), 7-O
Subjects
- unjust enrichment
- interest on delayed payment
- Employees Provident Fund
- refund of excess contribution
- Section 7‑O
- Letters Patent Appeal
- statutory restitution
- natural justice
- delay in adjudication
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.115 of 2025
In
Civil Writ Jurisdiction Case No.6784 of 2023
======================================================
1. The C.B.T/Board of Trustees (Central Board) Employees Provident Fund
Organization, (Ministry of Labour and Employment) Government of India,
14-Bikaji Cama Palace, New Delhi-110066, through the Regional Provident
Fund Commissioner-II, Employees Provident Fund Organization (Ministry
of Labour and Employment), Regional Office, Patna, Bhavishyanidhi
Bhawan, R Block, Road No.6, Patna-800001.
2. The Regional Provident Fund Commissioner-II, Employees Provident Fund
Organization (Ministry of Labour and Employment), Regional Office, Patna,
Bhavishyanidhi Bhawan, R Block, Road No. 6, Patna- 800001.
... ... Appellants
Versus
1. M/s The Longia Bidi Company, Barahdari, Biharsharif, Nalanda, through its
partner-Mohammad Ashirullah, aged about 39 years, Gender-Male, S/o Md.
Serajuddin- 803101.
2. The Union of India
... ... Respondents
======================================================
Appearance :
For the Appellant/s : Mr. Ravi Kumar, Advocate
M/s Priya Choubey, Advocate
For the respondent No.1 : Mr.Rajiv Kumar Singh, Sr. Advocate
Mr. Manish Kumar, Advocate
For U.O.I. : Mr. Alok Kumar, CGC
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE HARISH KUMAR
ORAL JUDGMENT
(Per: HONOURABLE THE CHIEF JUSTICE)
Date : 15-04-2026
[
This Letters Patent Appeal has been filed by the
C.B.T./Board of Trustees (Central Board) Employees Provident
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Fund Organisation challenging the order dated 11.07.2024 passed
by the learned Single Judge passed in C.W.J.C. No.6784 of 2023
whereby and whereunder the learned Single Judge has directed the
appellant to calculate simple interest @ 6 per cent per annum on
the amount of Rs.10,12,692/- from the date of passing of the order
by the Appellate Authority, i.e., 02.06.2011 till the date of actual
payment to the petitioner, i.e, 16.10.2023 and to pay the same to
the writ petitioner. It was further directed that the interest shall be
calculated and paid as expeditiously as possible preferably within
a period of four weeks from the date of receipt of the order.
2. The writ petition was filed by M/s Longia Bidi
Company, Barahdari, Biharsharif, Nalanda through its partner-
Mohammad Ashirullah with the following prayer :-
(i) For setting aside the communication
contained in Letter No. BR/PAT/EB/Part
File/2846/2021/4571 dated 22.02.2023/23.02.2023
issued by the Regional Provident Fund Commissioner-
II, Employees Provident Fund Organization (Ministry
of Labour & Employment), Regional Office, Patna
(Respondent No. 3) by which the Respondent No. 3 has
placed frivolous and unreasonable refunding the
conditions excess amount for Rs. 1012692/- paid by
the petitioner, which the Provident Fund Department is
under obligation of law to refund to the petitioner, and
(ii) For commanding the Respondent No. 3
to immediately refund the amount of Rs. 1012692/- to
the petitioner with up-to-date interest."
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3. It is the case of the petitioner that an order of
assessment under Section 7(A) of the Employees’ Provident Funds
and Miscellaneous Provisions Act, 1952 (hereinafter referred to as
the ‘1952 Act’) was passed on 31.08.2007 in which the petitioner
was directed to deposit Rs.12,82,999/- towards provident fund
contribution and additional Rs.7,42,383/- towards interest in total
Rs.20,25,382/- for the period of April, 1999 to March, 2004 and
the order was communicated to the petitioner vide letter dated
07.09.2007 by the Assistant Provident Fund Commissioner, Bihar,
Patna.
The petitioner being aggrieved by the assessment order
dated 31.08.2007 preferred an appeal before the E.P.F. Appellate
Tribunal, New Delhi under Section 7-I of 1952 Act which was
registered as ATA No. 745 (3) of 2007. In the said Appeal, an
interim order was passed directing the petitioner to deposit 50 per
cent of the impugned assessment amount for maintaining the
appeal. Since the petitioner could not deposit the amount as
directed by the Appellate Tribunal, the appeal was dismissed on
28.05.2009.
Being aggrieved by the dismissal of the appeal, the
petitioner preferred a writ petition before this Court in C.W.J.C.
No.12366 of 2009 and vide order dated 15.09.2009, the order of
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the appellate authority dated 28.05.2009 was set aside and the
petitioner was directed to deposit 50 per cent of the assessed
amount within 30 days and further direction was issued that if such
deposit was made, then the Appellate Tribunal shall decide the
appeal on its own merit and pass order in accordance with law.
4. In pursuance of the order of this Court in the writ
petition, the petitioner immediately deposited 50 per cent of the
assessed amount which came to Rs. 10,12,692/- by four different
Challans within time stipulated. Since the order passed by this
Court in the writ petition was complied with, the appeal filed by
the petitioner, stood revived before the learned E.P.F., Appellate
Tribunal, New Delhi and the Appellate Tribunal vide its final order
dated 02.06.2011 set aside the assessment order and remanded the
matter back with a further direction to determine the liability
afresh.
5. It is the further case of the petitioner that after remand
of the matter by the learned E.P.F., Appellate Tribunal, it was kept
pending before the Provident Fund Department for nearly 11 years
and the petitioner was no way responsible for such delay caused
and the petitioner was all along requesting the authority to
conclude the proceeding without further protracting it, but the
Provident Fund authorities did not pay any heed to the request
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made by the petitioner. During the pendency of the appeal, the
Area Enforcement Officer, Nalanda submitted its report on
14.12.2011 as well as on 08.05.2012 by which he calculated the
liability of the petitioner’s establishment during the period
04.09.1999 to 03.04.2004 to be Rs.49,453/-. However, the
petitioner placed his case before the concerned authority, that he
should be exonerated from the proceeding.
6. Ultimately, the Regional Provident Fund
Commissioner-II, Bihar, Patna passed the final order of assessment
on 29.09.2022 upholding the Area Enforcement Officer report and
passed the assessment order of Rs.49,453/- for the period from
April, 1999 to March, 2004 directing the petitioner to pay such
amount either by way of online or by demand draft in favour of the
Regional Provident Fund Commissioner-II, Bihar, Patna.
However, such order of assessment did not indicate anything
regarding the refund of Rs.10,12,692/- which admittedly the
petitioner had deposited pursuant to the order passed by this Court
and accordingly, the petitioner filed an application for review on
14.10.2022 bringing it to the notice of the Regional Provident
Fund Commissioner-II that an amount of Rs.10,12,692/- was lying
with the Provident Fund Department and while passing the
assessment order of Rs.49,453/-, the same should be adjusted and
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the balance amount of Rs.9,63,239/- with interest should be
refunded to the petitioner. The review application was rejected by
the Regional Provident Fund Commissioner-II, observing that the
issue of such adjustment and refund would be taken up separately
by the Department. After rejection of the review order, the
petitioner deposited Rs.49,453/- vide demand draft bearing
No.710306 dated 25.01.2023 and after depositing such amount, the
petitioner submitted two letters before the Regional Provident
Fund Commissioner-II that he had paid the assessed amount of
Rs.49,453/- and, therefore, the amount of Rs.10,12,692/- with
interest which was lying with the Provident Fund Department
should be refunded to him.
7. It is the case of the petitioner that when the Regional
Provident Fund Commissioner-II, Bihar, Patna, himself observed
that the request for refund would be taken up separately, after
deposit of the assessed amount of Rs.49,453/-, the same should
have been done immediately with interest, however, by issuing
letter dated 22.02.2023/23.02.2023, a new condition was imposed
that corresponding to penal damage and interests amount, if any,
will be calculated and adjusted before the processing the request of
the refund of excess amount of Rs.10,12,692/- deposited by the
petitioner. According to the petitioner, there was no valid reason
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or justification on the part of the Provident Fund Department not
to refund the amount of Rs.10,12,692/- with interest to the
petitioner which was lying with them in excess since October,
2009.
8. After issuance of notice, respondent No.2 and 3 filed
the counter affidavit wherein it is stated, inter alia, that the
contention raised by the petitioner and taken in the writ petition
against the provident fund authority dragging the matter is not
correct; inasmuch, as before a quasi judicial authority, all the
parties requested to be heard and accordingly, the employer as well
as the departmental representative were given opportunities to
present their case and the matter was adjourned from time to time
and finally disposed of keeping in view the principle of natural
justice. It is the further case of the respondents that the claim of
the petitioner to get interest on the amount of Rs.10,12,692/- is
not, at all justified, as the same has been deposited in compliance
with the order of the Hon’ble Court. Another supplementary
affidavit was also filed by the respondent No.2 and 3 wherein
similar grounds have been reiterated and it is stated that the claim
of interest on the amount of Rs.10 lakhs and odds is not applicable
either in law or in the facts and circumstances of the case and it is
to be rejected.
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9. The learned Single Judge in the impugned order has
been pleased to hold as follows :-
“6. The only issue in the present writ petition is as
to whether the petitioner is entitled to any interest on the
amount which has been deposited by the petitioner in
compliance of the Section 7-O of the Provident Fund Act
and kept with the authority for nearly ten years pursuant to
the order of this Hon'ble Court in CWJC No. 12366 of 2009
dated 15.09.2009. Admittedly, in the present case after the
remand by the appellate tribunal the assessing authority has
passed the final assessment order after lapse of more than
ten years. The initial assessment order of Rs. 20,25,382/-
was set aside and the fresh order of assessment was arrived
at fixing the liability at only Rs. 49,453/-based on the report
submitted by the Area Enforcement Officer dated
08.05.2012. It is also an admitted fact that though the
petitioner has sought for a refund of the amount deposited
by him under Section 7-O of the Provident Fund Act the
same was not done by the authority and the petitioner had to
approach this Court. This Court vide order dated
13.10.2023 had directed the counsel for the respondents to
get necessary instructions as to by what date the amount
deposited by the petitioner would be refunded to him.
Thereafter, only the amounts was refunded to the account of
the petitioner on 16.10.2023 and 17.10.2023. When the main
case was taken up for final hearing, this Court had directed
the respondents vide order dated 21.03.2024 to clarify as to
how the deposited amount of Rs. 10,12,692/- was utilized by
the Corporation, whether it was deposited in a Bank and in
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case, it was deposited in the Bank how much interest was
received by the fund on the amount of Rs. 10,12,692/-.
Pursuant to the said order a supplementary counter affidavit
has been filed by the respondent. In the supplementary
counter affidavit, the respondent-authority have only
reiterated the contents of the counter affidavit earlier filed
by them and stated that the petitioner is not entitled to
receive any interest on the deposited amount and did not
answer the query raised by this Court. Further, in the
supplementary counter affidavit, they have stated that the
order passed in review application filed by the petitioner
had become final. That the petitioner for the first time had
approached the respondent authorities only in the month of
27.01.2023. The supplementary counter affidavit is silent
with regard to the queries raised by this Court vide order
dated 21.03.2024. In this particular case, admittedly, the
appeal filed by the petitioner was allowed on 02.06.2011
and the matter was remanded back to the authority for
passing orders afresh. The authority for reasons best known
to them has taken ten years to pass the final assessment
order. Though the authority was obligated to refund the
amount without the petitioner asking for the same, they have
not done so and kept the amount with them for the ten years.
The fact that the amount deposited by the petitioner has
been utilized by the respondent-authority or that the said
amount was deposited in a Bank has not been denied by the
respondent authority. The authorities having kept the money
with them for a period of more than ten years cannot enrich
themselves at the cost of the petitioner. Even though
sufficient opportunity was given to the respondent-
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authorities to clarify as to how the deposited amount was
utilized, they have failed to answer the query raised in their
supplementary counter-affidavit and, therefore, an adverse
inference has to be drawn against them and it has to be
contended that they have deposited the amount in a Bank
and earned interest on the same.
7. The Hon'ble Supreme Court in the case of
Sahakari Khand Udyog Mandal Ltd. -Vrs.- Commissioner
of Central Excise & Customs reported in (2005) 3 Supreme
Court Cases 738 has held as follows:-
31. Simply stated, "unjust enrichment"
means retention of a benefit by a person that is unjust
or inequitable. "Unjust enrichment occurs when a
person retains money or benefits which in justice,
equity and good conscience, belong to someone else.
32. The doctrine of "unjust enrichment”
postulates that no person can be allowed to enrich
inequitably at the expense of another. A right of
recovery under the doctrine of "unjust enrichment"
arises where retention of a benefit is considered
contrary to justice or against equity.
33. The juristic basis of the obligation is
not founded upon any contract or tort but upon a
third category of law, namely, quasi-contract or the
doctrine of restitution."
8. The Hon'ble Supreme Court in the case of
Mahabir Kishore -Vrs.- State of M.P. reported in
(1989) 4 Supreme Court Cases 1 has also held as under:-
"11. The principle of unjust enrichment
requires; first, that the defendants has been
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"enriched" by the receipt of a "benefit"; secondly, that
this enrichment is "at the expense of the plaintiffs";
and thirdly, that the retention of the enrichment be
unjust. This justifies restitution. Enrichment may take
the form of direct advantage to the recipient wealth
such as by the receipt of money or indirect one for
instance where inevitable expenses has been saved."
9. Having regard to the above mentioned facts
and circumstances, this court is of the opinion that the
ends of justice would be met if the respondent authority
are directed to calculate simple interest at the rate of 6%
per annum on the amount of Rs. 10,12,692/- from the date
of passing of the order by the appellate authority i.e.
02.06.2011 till date of actual payment to the petitioner i.e.
16.10.2023 and pay the same to the petitioner. The
interest shall be calculated and paid as expeditiously as
possible preferably within a period of four weeks from the
date of receipt of this order.”
10. The main ground that has been taken by learned
counsel for the appellant in challenging the impugned order is that
there is no provision available under law for concluding the
proceeding under Section 7(A) of 1952 Act within any specific
period or for payment of interest on the deposited amount and
since the learned Single Judge has overlooked these vital aspects,
it has caused gross injustice and, therefore, the impugned order is
liable to be set aside.
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11. The learned counsel appearing for the respondent,
Ms. Longia Bidi Company, Barahdari, Biharsharif, Nalanda,
submitted that the deposit of Rs.10,12,692/- as per the order
passed by this Court in C.W.J.C. No. 12366 of 2009 is not in
dispute and the said amount was deposited in between 01.10.2009
to 30.10.2009 which would be evident from the challans, duly
annexed to the writ petition, as Annexure P/5 series. It is further
argued that on 02.06.2011, the Appellate Tribunal passed the final
order and set aside the impugned assessment order dated
31.08.2007 and remanded the matter back with a direction to
determine liability afresh but it took almost 11 years on the part of
the Regional Provident Fund Commissioner-II, Bihar, Patna to
pass the final order determining the assessment to be Rs.49,453/-
as the provident fund payable for the period April, 1999 to March,
2004 and accordingly direction was issued to the petitioner to pay
such amount and it is also not in dispute that even though the
petitioner filed the review petition seeking adjustment of the
assessment amount against Rs.10,12,692/- which has already been
deposited earlier and to refund the balance amount of
Rs.9,63,239/- but that was not entertained and ultimately the
petitioner has to deposit the assessment amount of Rs. 49,453/- on
25.01.2023. He, further submitted that only when the petitioner
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filed the refund application dated 27.01.2023 before the Regional
Provident Fund Commissioner-II, the amount of Rs. 10,12,234/-
was deposited in the account of the writ petitioner on 16.10.2023
and 17.10.2023. Learned counsel for the respondent argued that
since the money which was deposited by the petitioner was lying
with the appellants and they have earned interest thereon,
therefore, the learned Single Judge is quite justified in asking to
calculate the simple interest @ 6 per cent per annum and to pay the
same to the writ petitioner. It is further argued that since there is no
perversity in the impugned order, this Court being the Appellate
Authority exercising the appellate jurisdiction should not interfere
with the said order and the L.P.A. should be dismissed.
12. Adverting to the contentions raised by the learned
counsel for the respective parties, this Court is of the opinion that
there is no dispute that the Letters Patent Appeal which is normally
an intra Court Appeal, the Appellate Authority sits as a Court of
correction and the Appellate Authority should not disturb the
finding arrived at by the learned Single Judge of the Court unless it
is shown to be based on no evidence, perverse or unreasonable or
inconsistent with any particular provision of law. Thus, the scope
of interference is within narrow compass and it is a corrective
jurisdiction and to be used rarely only to correct the errors. Since
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it is not in dispute that the amount in question, i.e., Rs.10,12,692/-
including the additional amount of interest was deposited by the
writ petitioner way back in the year 2009, in pursuance of the
direction of this Court in the writ petition and he got back that
amount only on 16.10.2023 and 17.10.2023 and the appellant has
utilized that money by keeping it bank and earned interest thereon,
we are of the view that the learned Single Judge is quite justified
in holding that the appellants are to refund the amount calculating
the simple interest on Rs.10,12,692/- @ 6 per cent per annum.
13. The Hon’ble Supreme Court in the case of Indian
Council for Enviro-Legal Action -Vrs.- Union of India and Ors.
reported in (2011) 8 Supreme Court Cases 161, has held as
follows :-
“Unjust enrichment
151. Unjust enrichment has been defined as “A benefit
obtained from another, not intended as a gift and not
legally justifiable, for which the beneficiary must make
restitution or recompense.”
See Black's Law Dictionary, 8th Edn. (Bryan A.
Garner) at p. 1573. A claim for unjust enrichment arises
where there has been an “unjust retention of a benefit to
the loss of another, or the retention of money or property
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of another against the fundamental principles of justice or
equity and good conscience”.
152. “Unjust enrichment” has been defined by
the court as the unjust retention of a benefit to the loss of
another, or the retention of money or property of another
against the fundamental principles of justice or equity and
good conscience. A person is enriched if he has received a
benefit, and he is unjustly enriched if retention of the
benefit would be unjust. Unjust enrichment of a person
occurs when he has and retains money or benefits which
in justice and equity belong to another.
xx xx xx
154. Unjust enrichment occurs when the
defendant wrongfully secures a benefit or passively
receives a benefit which would be unconscionable to
retain. In the leading case of Fibrosa Spolka Akcyjna v.
Fairbairn Lawson Combe Barbour Ltd. [1943 AC 32 :
(1942) 2 All ER 122 (HL)], Lord Wright stated the
principle thus: (AC p. 61)
“… [A]ny civilised system of law
is bound to provide remedies for cases of
what has been called unjust enrichment or
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unjust benefit, that is to prevent a man from
retaining the money of or some benefit
derived from another which it is against
conscience that he should keep. Such
remedies in English law are generically
different from remedies in contract or in
tort, and are now recognised to fall within a
third category of the common law which has
been called quasi-contract or restitution.”
xx xx xx
159. Unjust enrichment is basic to the subject
of restitution, and is indeed approached as a fundamental
principle thereof. They are usually linked together, and
restitution is frequently based upon the theory of unjust
enrichment. However, although unjust enrichment is often
referred to or regarded as a ground for restitution, it is
perhaps more accurate to regard it as a prerequisite, for
usually there can be no restitution without unjust
enrichment. It is defined as the unjust retention of a
benefit to the loss of another or the retention of money or
property of another against the fundamental principles of
justice or equity and good conscience. A person is
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enriched if he has received a benefit, and he is unjustly
enriched if retention of the benefit would be unjust. Unjust
enrichment of a person occurs when he has and retains
money or benefits which in justice and equity belong to
another.
160. While the term “restitution” was
considered by the Supreme Court in South Eastern
Coalfields [South Eastern Coalfields Ltd. v. State of M.P.,
(2003) 8 SCC 648] and other cases excerpted later, the
term “unjust enrichment” came to be considered in
Sahakari Khand Udyog Mandal Ltd. v. CCE & Customs
[(2005) 3 SCC 738] . This Court said: (Sahakari Khand
case [(2005) 3 SCC 738] , SCC p. 748, para 31)
“31. … ‘unjust enrichment’ means
retention of a benefit by a person that is unjust
or inequitable. ‘Unjust enrichment’ occurs
when a person retains money or benefits which
in justice, equity and good conscience, belong
to someone else.”
xx xx xx
162. We may add that restitution and unjust
enrichment, along with an overlap, have to be viewed
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with reference to the two stages i.e. pre-suit and post-suit.
In the former case, it becomes a substantive law (or
common law) right that the court will consider; but in the
latter case, when the parties are before the court and any
act/omission, or simply passage of time, results in
deprivation of one, or unjust enrichment of the other, the
jurisdiction of the court to levelise and do justice is
independent and must be readily wielded, otherwise it will
be allowing the court's own process, along with time
delay, to do injustice.
163. For this second stage (post-suit), the need
for restitution in relation to court proceedings, gives full
jurisdiction to the court, to pass appropriate orders that
levelise. Only the court has to levelise and not go further
into the realm of penalty which will be a separate area for
consideration altogether.
xx xx xx
197. The other aspect which has been dealt
with in great detail is to neutralise any unjust enrichment
and undeserved gain made by the litigants. While
adjudicating, the courts must keep the following
principles in view:
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(1) It is the bounden duty and obligation of the
court to neutralise any unjust enrichment and undeserved
gain made by any party by invoking the jurisdiction of the
court.
(2) When a party applies and gets a stay or
injunction from the court, it is always at the risk and
responsibility of the party applying. An order of stay
cannot be presumed to be conferment of additional right
upon the litigating party.
(3) Unscrupulous litigants be prevented from
taking undue advantage by invoking jurisdiction of the
court.
(4) A person in wrongful possession should not
only be removed from that place as early as possible but
be compelled to pay for wrongful use of that premises
fine, penalty and costs. Any leniency would seriously
affect the credibility of the judicial system.
(5) No litigant can derive benefit from the mere
pendency of a case in a court of law.
(6) A party cannot be allowed to take any
benefit of his own wrongs.
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(7) Litigation should not be permitted to turn
into a fruitful industry so that the unscrupulous litigants
are encouraged to invoke the jurisdiction of the court.
(8) The institution of litigation cannot be
permitted to confer any advantage on a party by delayed
action of courts.
14. The Hon’ble Supreme Court in the case of Coal
India Ltd. -Vrs.- Rahul Industries reported in 2025 SCC OnLine
SC 1963 has held as follows :
“133. With all humility at our command, we
disagree with the aforesaid reason. While we are
conscious of the fact that the question of unjust
enrichment due to refund was discussed in Mafatlal
(supra) in the context of the levy of a duty, yet such
difference of fact does not incapacitate the courts
from applying the principles expounded in the said
judgment to other cases of retaining of monies by
the State.
134. The principles of unjust enrichment are of
general application and it is incumbent upon the
courts to not to allow someone a benefit that is not
due to them. …..”
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15. The Hon’ble Supreme Court in the case of
Poornima Advani -Vrs.- State (NCT of Delhi) reported in (2025)
7 Supreme Court Cases 269 has held as follows:-
“14. The concept of awarding interest on delayed
payment has been explained by this Court in
Karnataka Bank v. RMS Granites (P) Ltd.
[Karnataka Bank v. RMS Granites (P) Ltd., 2024
SCC OnLine SC 4695], we quote the following
observations: (SCC OnLine SC para 16)
“16. It may be mentioned that there is
misconception about interest. Interest is not
a penalty or punishment at all, but it is the
normal accretion on capital. For example,
if A had to pay B a certain amount, say ten
years ago, but he offers that amount to him
today, then he has pocketed the interest on
the principal amount. Had A paid that
amount to B ten years ago, B would have
invested that amount somewhere and
earned interest thereon, but instead of that
A has kept that amount with himself and
earned interest on it for this period. Hence
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equity demands that A should not only pay
back the principal amount but also the
interest thereon to B. [See: Alok Shanker
Pandey v. Union of India [Alok Shanker
Pandey v. Union of India, (2007) 3 SCC
545 : (2007) 136 Comp Cas 258] .]”
15. Thus, 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.
xx xx xx
18. In Irrigation Deptt., State of Orissa v. G.C.
Roy [Irrigation Deptt., State of Orissa v. G.C.
Roy, (1992) 1 SCC 508] , a Constitution Bench of
this Court opined 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. It may be called interest,
Patna High Court L.P.A No.115 of 2025 dt.15-04-2026
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compensation or damages. This is also the
principle of Section 34 of the Civil Procedure
Code.”
16. The ratio laid down in the case of Sahakari Khand
Udhyog Mandal Ltd. (supra) and other decisions cited above are
squarely applicable in the present case relating to the doctrine of
unjust enrichment which postulates that no person can be allowed
to enrich inequitably at the expense of another and unjust
enrichment arises where retention of the benefit is considered
contrary to justice or against equity.
When the appellant took almost 11 years to decide the
case, the plea that it was complying with the principle of natural
justice cannot be accepted, particularly when it is not pointed out
that there was any kind of negligence or lapses on the part of the
writ petitioner in causing such delay or that the petitioner was
adopting any dilly-dallying tactics for lingering the case.
Therefore, once the order of the assessment has been set aside by
EPF Appellate Tribunal, vide its order dated 02.06.2011, the
retention of the money by the appellants was not justified.
17. In exercise of the powers conferred by the sub-
section (1) of section 21 of the 1952 Act, the Tribunal (Procedure)
Rules, 1997 (hereinafter referred to as the ‘1997 Rules’) has been
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framed and it has come into force with effect from 21.06.1997
after it was published in the Gazette of India. 1997 Rules, apart
from dealing with the service of notices and processes in case of
filing of appeal and giving opportunity to the respondents to file
reply and other documents, stipulates in sub-rule (2) of rule 14 that
every appeal shall be heard, as far as possible, within six months
from the date of its registration.
In the case at hand, as already stated, the Appellate
Tribunal almost took 11 years for deciding the appeal and the
delay is in no way attributable to the respondents.
18. In view of the foregoing discussions, we are of the
humble view that by retaining the money of the respondent, the
appellants have deprived the respondent of the use of his money
which he is legitimately entitled to and had such money paid to the
respondent after the order of assessment was set aside, he would
have invested that amount somewhere and earned interest thereon.
Therefore, the appellants by retaining the money of the respondent
not only enriched themselves unjustly and received interest
thereon but also deprived the respondent to get the interest.
Therefore, we do not find any perversity in the impugned order
and as such, we are not inclined to interfere with the same.
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19. Accordingly, the L.P.A. being devoid of merits
stands dismissed.
20. Pending I.A., if any, stands disposed of.
(Sangam Kumar Sahoo, CJ)
(Harish Kumar, J)
sanjeev/.-
AFR/NAFR AFR
CAV DATE NA
Uploading Date 18.04.2026
Transmission Date NA
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