06 May 1996
Supreme Court
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STATE OF ORISSA Vs MAHANADI COALFIELDS LTD. .

Bench: AHMADI A.M. (CJ)
Case number: C.A. No.-000330-000604 / 1995
Diary number: 11438 / 1994
Advocates: RAJ KUMAR MEHTA Vs FOX MANDAL & CO.


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PETITIONER: STATE OF ORISSA & OTHERS

       Vs.

RESPONDENT: MAHANADI COALFIELDS LTD. & OTHERSETC. ETC.

DATE OF JUDGMENT:       06/05/1996

BENCH: AHMADI A.M. (CJ) BENCH: AHMADI A.M. (CJ) HANSARIA B.L. (J) SEN, S.C. (J)

CITATION:  1996 SCALE  (4)229

ACT:

HEADNOTE:

JUDGMENT: AND IN THE MATTER OF Orient Paper & Industries Ltd. & Anr. V. Mahanadi Coalfields Ltd. & Others                          O R D E R      By an interim order dated 3.1.1994, this Court directed (i) furnishing  of Bank guarantee for the amounts in respect of the  difference in  regard to  past dues; (ii) payment of duty for the period subsequent to 1.1.1994 on condition that the said  amount shall be kept in a separate bank account in interest-earning deposits;  and  (iii)  if  the  respondents succeed in  the writ  petitions, the  amount  together  with interest should  be refunded  to the respondents. Admittedly the High  Court by  its judgment dated 26.4.1994 allowed the writs and  this Court  affirmed that  order by  its decision dated 21.4.1995.  Ordinarily, therefore,  under the  Court’s order dated  3.1.1994 the  respondents would  be entitled to refund.      However, the language of this Court’s order dated 21.4.1995 is relied upon to deny the refund since it said:      "In  our  opinion,  the  amount  so      collected  may   be   refunded   to      persons  entitled   to  the   same,      within a  period of  one year  from      today, failing  which  they  should      pay interest  at  18%      p.a.  on      expiry of one year." Emphasis is  laid on  the word  "entitled" to  say that  the respondents are  not entitled to refund. In this connection, our attention was also invited to our subsequent order dated 11.8.1995  whereby  pending  determination  of  the  dispute Mahanadi was ordered to deposit the amount of the difference within three  weeks, which deposit we understand has come to be made.  A separate statement was also required to be filed

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in regard to those who were granted refunds. This is evident from the  affidavit  of  Kumarendra  Nath,  General  Manager (Finance),  which  shows  that  the  company  had  deposited Rs.49,22,68,098.89 by  two separate  Demand Drafts. Appended to the  affidavit is  a statement  marked Appendix ’A’ which shows the  amounts collected  from  purchasers/consumers  of coal together  with interest  due thereon  minus the  amount refunded betwecn  21.4.1995 and 11.8.1995. Appendix ’B’ is a statement showing  the amount  refunded/adjusted towards the sale price. The total amount Rs.4,34,32,498 is shown to have been refunded/adjusted.      We see no merit in the objection raised. We consider it to be  frivolous. The  submission that  the refund  must  be refused because  it  would  amount  to  ’unjust  enrichment’ cannot  be  countenanced  since  this  Court’s  order  dated 3.1.1994  in   no  uncertain  words  provided  that  on  the respondents succeeding  in the  writ petitions,  they shall, without any  other  condition  or  stipulation,  be  granted refund together  with accrued  interest.  By  our  order  of 11.8.1995, we  secured the  amount by  directing Mahanadi to deposit  the   amount  in   this  court   subject  to  their contentions. Accordingly  the amount  of  Rs.49,22,68,098.89 came to be deposited on 31.8.1995.      Now it  is clear  from this  Court’s order  of 3.1.1994 that on  a certain  event happening,  namely, the respondent succeeding in  the writ  petitions, the  amount  was  to  be refunded to them together with interest accrued thereon. The words used  were ’shall  be refunded’ and the High Court was requested to dispose of the writ petitions. Indisputably the writ petitions  have been  finally disposed  of in favour of the respondents.  The condition  precedent of  the order  of 3.1.1994 has  since been  satisfied.  The  subsequent  order dated 21.4.1995  extracted hereinbefore merely said that the refund may  be allowed to those entitled to the same. By the use of  the expression  ’entitled’, the  court did  not  and could not  have intended  to depart from or modify the order of 3.1.1994.  And the question of entitlement in relation to unjust enrichment  was far from the court’s mind. It is only another attempt  on the  part of  the State  to  retain  the money. Besides, the position has also been clarified in this behalf in  the subsequent  affidavits  dated  4.8.1995.  The allegation that  the tax  liability had  been passed  on and collected from  the  consumers  has  been  specifically  and emphatically denied.  We, therefore,  see no  merit  in  the contention.      In the result, we see no merit in the objections raised and repel  them in  toto. We  direct that  pursuant to  this Court’s order  dated 3.1.1994,  the tax amount with interest deposited in  this Court’  be refunded to the respondents in the appeal arising from SLP Nos.16120-21 of 1993.      There is  no doubt  that in  the concluding part of the judgment of  this Court  dated  21.4.1995  in  Civil  Appeal Nos.330-604 of 1995 heard along with I.A. Nos.4-5 of 1994 in Civil Appeal  Nos. 42-43  of 1994,  Shri Shanti  Bhushan had appeared on  behalf of the Orient Paper & Industries and not for Mahanadi Coalfields Ltd. and therefore, the reference to him as  counsel for  Mahanadi Coalfields  is inaccurate  and needs to  be corrected  by substituting  the name  of Orient Paper and  Industries in  place of  Mahanadi Coalfields Ltd. That disposes of I.A.No.278 of 1995.      In view of the above, the interim applications Nos.279- 553 of  1995  filed  by  the  State  of  Orissa  will  stand dismissed. Interim applications Nos.278, 554 and 556 of 1995 will stand  allowed and  the applicants shall be entitled to refund and discharge of bank guarantee.

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    I.A.No.555  of   1995  has   been  filed   by  Mahanadi Coalfields Limited  pursuant to the directions of this Court in its order dated 11.8.1995. It seeks to record the deposit of  Rs.4.92   Crores  with   the  Court  and  seeks  further directions in  respect of  (i) a sum of Rs.27,77,000/- which had earlier  been deposited  with the  State  of  Orissa  by Mahanadi Coalfields  which in  turn had  collected  it  from customers who  had not  gone to  court but  had nevertheless paid the amount, and (ii) a sum of Rs.1,82,173/- which still remains  with   Mahanadi  Coalfields   as  a   result  of  a computation  error.  With  respect  to  (i),  the  State  is directed to  return the  sum to  the customers  who were not parties to  the  litigation  by  referring  to  the  details provided by  Mahanadi Coalfields,  and as  regards (ii), our directions in  respect of  the money  already deposited with this Court will apply to this amount also.      There will be no order as to costs.