JUDGMENT
Ajit Kumar Sengupta, J.
1. This appeal arises out of the order dated 7th July, 1992 passed by a learned Single Judge of this Court on an application filed by the respondent-Writ Petitioner for refund of the cash security along with interest.
2. Shortly stated, the facts are that the respondent-Writ Petitioner is the sole proprietor of a transport agency namely M/s. Shammy Road Carriers. In or about January 1987, 9 trucks along with goods loaded therein which were proceeding from Delhi to Calcutta were detained by the Central Excise Officers at Bolpur. 4 trucks were brought to Calcutta Customs House. The allegation was that the said trucks were involved in smuggling activities. By order dated 14th April, 1987 the Collector of Customs directed release of the said 4 trucks provisionally on depositing of Rs. 20,000/- for each truck and on execution of bonds for the entire value of the said trucks. Between April 1987 and August 1987 the respondent-Writ Petitioner deposited an aggregate sum of Rs. 80,000/- in cash with the Collector of Customs and obtained release of 4 trucks on execution of bonds.
3. The respondent-Writ Petitioner also paid a sum of Rs. 1,28,250/- in or about May 1987 for release of the indigenous goods which were seized by the Customs Authorities.
4. By an order dated 24th May, 1988 the Collector of Customs (Preventive) confiscated the indigenous goods, but allowed an option to the writ petitioner to clear the said goods on payment of redemption fine of Rs. 1,28,250/-. The said fine was adjusted against security deposit of identical amount made at the time of provisional release of the said goods. The Collector also confiscated the said 4 trucks, but allowed the Writ Petitioner to redeem the said trucks on payment of redemption fine of Rs. 80,000/-. The said fine was adjusted against security deposit of identical amount made at the time of provisional release of the said trucks. Collector also imposed penalty on the respondent-Writ Petitioner as well as on the said Shammy Road Carriers of which respondent Writ Petitioner was the proprietor.
5. The respondent-Writ Petitioner took the matter to the Customs, Excise & Gold (Control) Appellate Tribunal. By the order dated 21st September, 1990 the Tribunal set aside the order of confiscation of the said indigenous goods and trucks and imposition of penalties on the respondent-Writ Petitioner. The Tribunal directed that the respondent-Writ Petitioner would be entitled to “consequential reliefs in terms of the above order.” [emphasis added]
6. On 22nd February, 1991 the respondent-Writ Petitioner made an application to the Collector of Customs for refund of security deposit amounting to Rs. 1,28,250/- for indigenous goods and Rs. 80,000/- for 4 trucks for provisional release in terms of the said order of the Tribunal dated 21st September, 1990, but no steps were taken by the Collector of Customs for refund of the said security deposit.
7. No reference was made by the Collector of Customs against the said order of the Tribunal and the said order became final. In spite of that the said amounts of Rs. 1,28,250/- and Rs. 80,000/- deposited as cash security were not refunded to the Writ Petitioner. In the circumstances the Writ Petitioner moved this Court for refund of the said amount with interest at the rate of 18% per annum from June 1987, when the said deposits were made, till the date of actual payment. The learned Judge disposed of the writ application by directing the Customs Authorities to refund the amount of security deposit by the respondent totalling Rs. 2,08,250/- with interest at the rate of 18% per annum calculated from 1st November, 1990 till the date of payment.
8. This appeal is directed against the said order. It may be mentioned that the appellant has refunded the said sum of Rs. 2,08,250/- but has not paid interest as directed by the Court of the first instance.
9. Mr; N.C. Roychowdhury, learned Counsel appearing on behalf of the appellant submitted that no interest is payable under the statute for delayed refund of cash deposits and as such, the learned Judge was not right in directing payment of interest. He further submitted that in any event the interest is not payable from 1st November, 1990, at best it may be allowed from the date when the Writ Petitioner filed the application before the Collector of Customs on 22nd February, 1991 for refund of the security deposit.
10. In our view these contentions have no substance. Interest which has been directed to be paid by the appellant is not a statutory interest. Where the collection is unauthorised and illegal, there is a corresponding obligation on the part of the Revenue Authorities to refund such amount with interest inasmuch as they have retained and enjoyed the benefit of the money deposited as cash security. Therefore, the Revenue Authorities are required to pay interest. As indicated earlier, the cash deposits were made by the respondent-Writ Petitioner between April and August 1987 and as such, the said deposits retained the character of security deposits, till the date of order of confiscation on 24th May 1988. It was the duty of the Customs Authorities to ensure that such deposits were duly invested in interest-earning investment. Until confiscation and consequent appropriation, ownership of cash security deposit did not vest in the custom authorities. It is only after the order was passed by the Collector on 24th May, 1988 confiscating the seized trucks and goods, redemption fine was imposed and in that process the security deposits were appropriated. The Tribunal, however, set aside the said order of confiscation by the order dated 21st September, 1990 and accordingly the respondents became entitled to consequential relief by way of refund of the said cash deposit. Between 24th May, 1988 and 21st September, 1990 the cash deposits might have lost the character of deposits, but it cannot be disputed that until appropriation was made upon confiscation the cash deposit ought to have been invested in appropriate investment which would have earned some interest to compensate the loss that may be suffered by the depositor if he is ultimately found to be entitled to refund of such deposit. As soon as the Tribunal set aside the order of confiscation, on 21st September, 1990 the right to refund of the deposits accrued, there being no further proceeding challenging the order of the Tribunal. But no refund was made. The respondent made an application for refund of the said amount on 22nd February, 1991 but the Collector did not refund the money. It was only after the respondent moved this Court and order was made in his favour that the refund was made. In this case, there has been an inordinate delay in refund of the money by the authorities. The authorities cannot contend that no interest should be paid because such interest is not statutorily payable. If this contention is accepted, then refund of the cash deposits which are essentially security deposits may be withheld as long as possible with impunity. By this process a person can be deprived of the legitimate user of the money due to him. The court has inherent power in writ jurisdiction to direct the public authorities to compensate a person for the loss suffered by him by reason of the inordinate, unexplained and unwarranted delay in making the refund. Where refund due to a person pursuant to an order of the Tribunal is not made within a reasonable time from the date of the order of the Tribunal even after such order has reached finality, the officers responsible for delay in refunding the money belonging to depositor should be asked to compensate that loss which has to be paid by the Government because of their laches and negligence of their officers causing delay in refund consequent upon the order of the Tribunal. It is however a matter for the department to consider whether such action should be taken or not but there cannot be any dispute that interest has to be paid in a case like this. In this connection reference may be made to the decisions of this Court in the case of Radheshyam Tulsan v. Collector of Customs and Ors., wherein the Court ordered to pay the interest on the money retained by the Department unauthorisedly. Reference has also been made to a Bench decision of this Court in the case of Assistant Collector of Central Excise v. Calcutta Chemical Company Ltd. where the Court directed to refund the illegally collected duty with interest.
11. In our view the learned Judge was very liberal in not directing the refund from August 1987 when the last deposit was made by the respondent. The interest was directed to run from 1st November, 1990. Presumably by that time the period of limitation for a reference to the High Court had expired. We cannot accept the contention of Mr. Roychowdhury that interest should be calculated only from the date when the application for refund was made on 22nd February, 1991. In our view, application for refund is not a condition precedent for obtaining the refund of cash security. It is not a refund of provisional duty, it was the obligation of the Revenue Authority to refund such deposit whether or not application in that behalf was made.
12. For the reasons aforesaid it must be held that the appeal is misconceived. The appeal, therefore, fails and is dismissed. There will be no order as to costs. Let the interest be paid as directed by the court of the first instance by 30th April, 1993.
13. Let the parties act on a signed copy of the minutes of the operative part of the judgment and order.