R. Shanmuganathan and Others vs Appropriate Authority (No. 2)

K. Govindarajan, J.—By consent of both counsel, the main writ appeal itself is taken up for final disposal.

The appellants though succeeded before the learned judge in getting the impugned order set aside and thereby they got the property acquired by

the respondent-authority under the provisions of the Income Tax Act, on condition that the petitioners/appellants shall refund to the respondent the

entire amount received by them together with interest at the rate of 15 per cent, from the date on which they received the money till the date, they

refund the money to the respondent-authority, the appellants have filed the above appeal aggrieved against the direction, directing them to pay

interest at the rate of 15 per cent.

As submitted by learned counsel appearing for the appellants, when the learned judge has found that the acquisition of the appellant''s property

under the provisions of the Income Tax Act cannot be sustained in law, as the respondent-authority has no jurisdiction to acquire the said property

under Chapter XX-C of the Income Tax Act, the appellants/petitioners should not have been directed to pay interest at 15 per cent.

By the alleged acquisition under the said Act, the respondent-authority has prevented the appellants/petitioners from enjoying their property by

taking possession of the same. When the lawful possession of the appellants was denied, the respondent-authority cannot claim any interest for the

amount paid towards the said acquisition.

Hence, the respondent-authority is not entitled to any interest as directed by the learned judge. So, the order of the learned judge is modified to

the extent that the appellants/petitioners are liable to refund the entire amount to the respondent deposited by them, towards the acquisition of the

property in question and, on such repayment of the said amount, the respondent-authority shall hand over possession of the residence as. directed

by the learned judge.

With the above modification, the order of the learned judge is confirmed and this appeal is disposed of accordingly. No costs. Consequently, C.

M. P. No. 7416 of 1999 is closed.