AVS International vs MTNL and Others

Sanjiv Khanna, J.

C.M. No. 5328/2008

The petitioner-M/s. AVS International is a partnership firm. The partners are the sons of Mr. R.L. Moria.

Respondent-MTNL raised a demand of Rs. 3,31,022/- against telephone No. 692870 sanctioned and installed in the name of Mr. R.L. Moria.

Acting under Rule 433 of the Indian Telegraph Rules, the respondent-MTNL threatened the petitioner that their telephones would be disconnected for non-payment of said dues.

The petitioner thereafter filed the present Writ Petition which was disposed of vide Order dated 26th May, 2003. The Court noticed that the arbitration proceedings were pending between Mr. R.L. Moria and the respondent-MTNL. The petitioner by an interim order were directed to deposit Rs. 75,000/- with the respondent as a precondition to avoid disconnection of their telephones. While disposing of the writ petition, the learned Single Judge held that the amount deposited by the petitioner would be refunded in case an award is passed in favour of Mr. R.L. Moria.

By Award dated 2nd December, 2003, Mr. R.L. Moria was held liable to pay Rs. 20,000/- only and the balance demand was quashed. Mr. R.L. Moria, however, filed a writ petition in this Court and after examining the facts of the case, learned Single Judge by Order dated 23rd April, 2007 reduced the demand to Rs. 1000/- only on the basis of prior and post billing period bills. Thus it was found that demand of Rs. 3,31,022/- raised by the respondent-MTNL was unjustified and illegal. It is the allegation of the petitioner that it was found that one of the employees of the respondent-MTNL had indulged in wrongful acts and bills were wrongly raised against Mr. R.L. Moria.

The amount of Rs. 75,000/- deposited by the petitioner has been refunded but the petitioner now claims interest on the said amount. Respondent is a service provider and charges interest on delayed payments from customers. In this case a wrong bill was raised and the respondent-MTNL wanted to recover the said demand from the petitioner. The petitioner was compelled to deposit Rs. 75,000/- and get a stay order to avoid disconnection. In all fairness and equity, the respondent should pay interest on the deposit made by the petitioner. Rs. 75,000/- was utilized and appropriated by respondent-MTNL for their purposes. Petitioner should be compensated for the loss caused and their inability to utilize Rs. 75,000/-.

Learned Counsel for the respondent submits that the petitioner had earlier filed C.M. No. 8886/2004 and request of the petitioner for interest was rejected. This is not correct. C.M. No. 8886/2004 was disposed of vide Order dated 17th September, 2004, inter alia, holding that the Award was pending adjudication and had not yet become final and enforceable. Learned Counsel for the respondent has also placed reliance on Union of India (UOI) and Others Vs. Nirlon Synthetic Fibres and Chemicals Co., . The said decision is distinguishable. In the said case, learned Single Judge had directed refund of the principal amount only and not interest. This order was allowed to become final. In the present case, I do not think it was the intention of the Court, while passing the Order dated 26th May, 2003, that the petitioner would not be entitled to interest in case the amount deposited by the petitioner was refunded.

Keeping in view the bank rate of interest prevailing during the period in question, the petitioner is held entitled to simple interest @ 7% p.a. from the date of deposit till payment was made. The above interest will be paid to the petitioner within four weeks from today.

Application is disposed of.