Supreme Court Ordered to DDA Pay Interest on Refund

New Delhi, September 6, 2023 – In a significant ruling yesterday, the Supreme Court of India disposed of civil appeals concerning the claim for payment of interest on amounts refunded by the Delhi Development Authority (DDA). The appeals were filed by charitable institutions that had deposited amounts with the DDA for availing additional Floor Area Ratio (FAR) benefits.

The bench, consisting of Justices A.S. Bopanna and Prashant Kumar Mishra, stated, "Appeals disposed of without any order as to costs," leaving the appellants free to initiate separate proceedings for claiming interest for the period of retention of their deposits.

The appellants had initially challenged DDA notifications in the Delhi High Court, which had granted them interim relief, allowing them to deposit disputed amounts and proceed with construction. The High Court had indicated that the question of refund with interest would be examined later. However, the High Court eventually directed the refund of the deposited amounts without interest.

In its judgment, the Supreme Court observed, "In the present facts as on the date when the writ petition was filed and the petitioner had voluntarily offered to deposit the amount, the amount was to be paid and recoverable under the notification dated 10.10.2008 and 23.12.2008 if the benefit of additional FAR was to be availed."

The Court also noted that the principles of restitution and 'Actus Curiae Neminem Gravabit' were not applicable in this case. "When there was no adjudication and determination with regard to the right of the appellant and a declaration that the amount was illegally demanded and retained by the respondent, either the direction to pay interest or to compensate in any other manner for the pendente lite period would not arise," the Court added.

Date of Decision: September 05, 2023

Lal Bahadur Shastri Educational Society & Anr. vs Delhi Development Authority & Ors.