Supreme Court – Daily Orders
M/S Bsbk Private Limited vs The State Of Chhattisgarh on 28 April, 2026
IN THE SUPREME COURT OF INDIA
EXTRA ORDINARY APPELLATE JURISDICTION
Petition for Special Leave to Appeal (C) No.13250/2025
M/S BSBK PRIVATE LIMITED Petitioner(s)
VERSUS
THE STATE OF CHHATTISGARH & ORS. Respondent(s)
O R D E R
1. This petition arises from the judgment and order passed by
the High Court of Chhattisgarh dated 27.03.2025 in Writ Appeal
No. 185 of 2025 by which the Writ Appeal preferred by the
petitioner herein came to be dismissed, thereby affirming the
judgment and order passed by a learned Single Judge of the
High Court partly allowing the Writ petition preferred by the
petitioner herein.
2. The controversy in the present litigation is in a very
narrow compass.
Signature Not Verified
Digitally signed by
CHANDRESH
Date: 2026.05.04
17:32:49 IST
Reason: 1
3. The petitioner before us is engaged in the business of
construction. Sometime in 2016, the Municipal Corporation,
Bilaspur through its Commissioner issued a notice inviting
tender (NIT) No.13-1/ dated 25-11-2016 for construction of
“Multi Storey Building including Internal water supply,
Sanitary and Internal Electrification for 1232 number of
dwelling units by pre-cast technology with Infrastructure
(road, drain, water, supply, sewerage, rain water harvesting
etc.)” under House for All (HFA) Scheme”.
4. The period for completion of work was 24 months.
5. The petitioner offered its bid and was declared the
successful bidder.
6. The contract was awarded to the petitioner for the agreed
sum of Rs.62,21,60,000/- (Rupees Sixty two crore twenty one
lakh and sixty thousand only).
7. The relevant terms and conditions as per the NIT read
thus:-
“Clause 2.7/Pg 54 provides for 5% of the contract
value to be the Security Deposit. Special
Conditions @ Pg 87 & 88 provide for Security
Deposit to be refunded on completion of the
project, testing and handing over to the
Department. The remaining 50% of the amount to be
refunded after 6 months.
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Performance Guarantee @ Pr. 4(iv) & 4(v) @ Pg 88
to returned after one year of the date of
completion construction and the balance within 24
months from date of completion of construction.”
8. Sometime in 2019, the petitioner completed the work.
Having completed the work, he became entitled to 50% of the
security deposit amounting to Rs.1,55,54,000/- (Rupees One
crore fifty five lakh and fifty four thousand only) on that
date itself, i.e.,31.12.2019.
9. On 13.05.2020, the Corporation issued a completion
certificate to the petitioner indicating the date of
completion of construction as 31.12.2019.
10. The issue with regard to release of security deposit and
Performance Guarantee amounting to Rs.4,97,72,000/- (Rupees
Four crore ninety seven lakh and seventy two thousand only)
arose between the parties.
11. It is not in dispute that the amount of Rs.4,97,72,000/-
(Rupees Four crore ninety seven lakh and seventy two thousand
only) came to be ultimately released in favour of the
petitioner but after a delay of almost 4 years.
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12. Even for the release of this amount, the petitioner had to
go before the High Court by way of a writ petition. The
petitioner succeeded before the learned Single Judge. There
was a mandamus issued to the Corporation to release this
amount referred to above but the learned Single Judge declined
to grant any interest on the delayed payment.
13. In such circumstances, the petitioner went before the
Division Bench of the High Court in Writ Appeal, the Division
Bench dismissed the appeal.
14. In such circumstances referred to above, the petitioner is
here before us with the present petition.
15. We heard Mr.Kavin Gulati, the learned senior counsel
appearing for the petitioner, and Mr. Padmesh Mishra, the
learned counsel appearing for the Corporation.
16. The short point that falls for our consideration is
whether the petitioner is entitled to claim interest on the
delayed payment of Rs.4,97,72,000/- (Rupees Four crore ninety
seven lakh and seventy two thousand only).
17. The issue is no longer res integra in view of the decision
of this Court in the case “Dr. Poornima Advani & Anr. Vs.
4
Government of NCT & Anr.” Civil Appeal No. 2643/2025, decided
on 18.02.2025. We quote the relevant paragraphs:-
“16. The concept of awarding interest on delayed payment
has been explained by this Court in the case of
Authorised Officer Karnataka Bank v. M/s R.M.S. Granites
Pvt. Ltd. & Ors. in Civil Appeal No. 12294 of 2024, we
quote the following observations:-
“It may be mentioned that there is misconception
about interest. Interest is not a penalty or
punishment at all, but it is the normal accretion
on capital. For example if A had to pay B a certain
amount, say ten years ago, but he offers that
amount to him today, then he has pocketed the
interest on the principal amount. Had A paid that
amount to B ten years ago, B would have invested
that amount somewhere and earned interest thereon,
but instead of that A has kept that amount with
himself and earned interest on it for this period.
Hence equity demands that A should not only pay
back the principal amount but also the interest
thereon to B. [See: Alok Shanker Pandey v. Union of
India : AIR 2007 SC 1198.]”
17. Thus, when a person is deprived of the use of his
money to which he is legitimately entitled, he has a
right to be compensated for the deprivation which may be
called interest or compensation. Interest is paid for
the deprivation of the use of money in general terms
which has returned or compensation for the use or
retention by a person of a sum of money belonging to
other.
18. As per Black’s Law Dictionary (7th Edn.):
“interest” is the compensation fixed by agreement or
allowed by law for use or detention of money or for the
loss of money of one who is entitled to its use,
entitled to its use, especially, the amount owned to a
lender in return for the use of the borrowed money.
19. As per Stroud’s Judicial Dictionary of Words and
Phrases (5th edn.): interest means, inter alia,
compensation paid by the borrower to the lender for
deprivation of the use of his money.
20. In the case of Secretary, Irrigation Department,
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Government of Orissa v. G.C. Roy, (1992) 1 SCC 508, a
Constitution Bench of this Court opined that a person
deprived of use of money to which he is legitimately
entitled has a right to be compensated for the
deprivation, call it by any name. It may be called
interest, compensation or damages. This is also the
principle of Section 34 of the Civil Procedure Code.
21. The essence of interest as held in the case of Lord
Wright in Riches v. Westminister Bank Ltd., 1947 (1) ALL
ER 469, at page 472, is that it is a payment, which
becomes due because the creditor has not had his money
at the due date. It may be recorded either as
representing the profit he might have made if he had had
the use of the money, or, conversely, the loss he
suffered because he had not that use.
22. In the case of Commissioner of Income Tax v. Dr.
Sham Lal Narula, AIR 1963 Punjab 411, a Division Bench
of the High Court of Punjab articulated the concept of
interest as under:-
“The words ‘interest’ and ‘compensation’ are
sometimes used interchangeably and on other
occasions they have distinct connotation.
“Interest” in general terms is the return or
compensation for the use or retention by one person
of a sum of money belonging to or owed to another.
In its narrow sense, ‘interest’ is understood to
mean the amount which one has contracted to pay for
use of borrowed money. ……… In whatever category
“interest” in a particular case may be put, it is a
consideration paid either for the use of money or
for forbearance in demanding it, after it has
fallen due, and thus, it is a charge for the use or
forbearance of money. In this sense, it is a
compensation allowed by law or fixed by parties, or
permitted by custom or usage, for use of money
belonging to another, or for the delay in paying
money after it has become payable.” (Emphasis
supplied)
23. The appeal filed against aforesaid decision was
dismissed by this Court in Sham Lal Narula Dr. v. CIT,
AIR 1964 SC 1878.
24. In the case of Hello Minerals Water (P) Ltd. v.
Union of India, (2004) 174 ELT 422, (paras 15 and 16), a
6
Division Bench of the Allahabad High Court explained the
concept of interest as under:-
“15. We may mention that we are passing the
direction for interest since interest is the normal
accretion on capital. Often there is misconception
about interest. Interest is not a penalty or
punishment at all.
s
16. For instance, if A had to pay a certain sum of
money to B at a particular time, but he pays it
after a delay of several years, the result will be
that the money remained with A and he would have
earned interest thereon by investing it somewhere.
Had he paid that amount at the time when it was
payable then B would have invested it somewhere,
and earned interest thereon. Hence, if a person has
illegally retained some amount of money then he
should ordinarily be directed to pay not only the
principal amount but also the interest earned
thereon.
Money doubles every six years (because of compound
interest). Rs. hundred in the year 1990 would
become Rs. two hundred in the year 1996 and it will
become Rs. 400 in the year 2002. Hence, if A had to
pay B a sum of rupees 100 in the year 1990 and he
pays that amount only in the year 2002, the result
will be that A has pocketed Rs. 300 with himself.
This clearly cannot be justified because had he
paid that amount to B in the year 1990, B would be
having Rs. 400 in the year 2002 instead of having
only Rs. 100/-. Hence, ordinarily interest should
always be awarded whenever any amount is detained
or realized by someone, otherwise the person
receiving the amount after considerable delay would
be losing the entire interest thereon which will be
pocketed by the person who managed the delay, it is
for this reason that we have ordered for payment of
interest alongwith the amount realized as export
pass fee.”
INTEREST IS NORMAL ACCRETION ON CAPITAL
25. If on facts of a case, the doctrine of restitution
is attracted, interest should follow. Restitution in its
etymological sense means restoring to a party on the
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modification, variation or reversal of a decree or order
what has been lost to him in execution of decree or
order of the Court or in direct consequence of a decree
or order. The term “restitution” is used in three
senses, firstly, return or restoration of some specific
thing to its rightful owner or status, secondly, the
compensation for benefits derived from wrong done to
another and, thirdly, compensation or reparation for the
loss caused to another.
26. In Hari Chand v. State of U.P., 2012 (1) AWC 316,
the Allahabad High Court dealing with similar
controversy in a stamp matter held that the payment of
interest is a necessary corollary to the retention of
the money to be returned under order of the appellate or
revisional authority. The High Court directed the State
to pay interest @ 8% for the period, the money was so
retained i.e. from the date of deposit till the date of
actual repayment/refund.
27. In the case of O.N.G.C. Ltd. v. Commissioner of
Customs Mumbai, JT 2007 (10) SC 76, (para 6), the facts
were that the assessment orders passed in the Customs
Act creating huge demands were ultimately set aside by
this Court. However, during pendency of appeals, a sum
of Rs. 54,72,87,536/- was realized by way of custom
duties and interest thereon. In such circumstances, an
application was filed before this Court to direct the
respondent to pay interest on the aforesaid amount
w.e.f. the date of recovery till the date of payment.
The appellants relied upon the judgment in the case of
South Eastern Coal Field Ltd. v. State of M.P., (2003) 8
SCC 648. This Court explained the principles of
restitution in the case of O.N.G.C. Ltd. (supra) as
under:-
“Appellant is a public sector undertaking.
Respondent is the Central Government. We agree that
in principle as also in equity the appellant is
entitled to interest on the amount deposited on
application of principle of restitution. In the
facts and circumstances of this case and
particularly having regard to the fact that the
amount paid by the appellant has already been
refunded, we direct that the amount deposited by
the appellant shall carry interest at the rate of
6% per annum. Reference in this connection may be
made to Pure Helium Indian (P) Ltd. v. Oil &8
Natural Gas Commission, JT 2003 (Suppl. 2) SC 596
and Mcdermott International Inc. v. Burn Standard
Co. Ltd. JT 2006 (11) SC 376.” (Emphasis supplied)”
18. In view of the aforesaid, we dispose of this petition with
a direction to the Corporation to calculate the interest on
the requisite amount, i.e., Rs. 4,97,72,000/- over a period of
time at the rate of 6% simple interest. The amount shall be
calculated and paid to the petitioner within a period of four
weeks from today.
19. If there is any confusion as regards the calculation more
particularly the time period, the petitioner may make the
Corporation understand with an appropriate statement on paper.
20. Pending application(s), if any, stands disposed of.
……………………………………………J.
[J.B. PARDIWALA]
……………………………………………J.
[UJJAL BHUYAN]
New Delhi
28th April,2026.
cd
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ITEM NO.44 COURT NO.7 SECTION IV-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition for Special Leave to Appeal (C) No.13250/2025
[Arising out of impugned final judgment and order dated
27-03-2025 in WA No. 185/2025 passed by the High Court of
Chhatisgarh at Bilaspur]
M/S BSBK PRIVATE LIMITED Petitioner(s)
VERSUS
THE STATE OF CHHATTISGARH & ORS. Respondent(s)
IA No. 16867/2026 – APPLICATION FOR PERMISSION
IA No. 118009/2025 – EXEMPTION FROM FILING C/C OF THE IMPUGNED
JUDGMENT,IA No. 118011/2025 – EXEMPTION FROM FILING O.T.
IA No. 72076/2026 – PERMISSION TO FILE ADDITIONAL
DOCUMENTS/FACTS/ANNEXURES
IA No. 16868/2026 – REJOINDER
Date : 28-04-2026 This matter was called on for hearing today.
CORAM :
HON’BLE MR. JUSTICE J.B. PARDIWALA
HON’BLE MR. JUSTICE UJJAL BHUYANFor Petitioner(s) :Mr. Kavin Gulati, Sr. Adv.
Mr. Ninad Dogra, Adv.
Mr. Kishore Kunal, AOR
Mr. Dushyant Sharma, Adv.
Mr. Mohith S Kumar, Adv.
Mr. Aditya Rathore, Adv.
For Respondent(s) :Mr. Padmesh Mishra, Adv.
Mr. Nikunj Goyal, Adv.
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Mr. Vijant, Adv.
Mr. Aayushmaan Vatsyayana, AOR
UPON hearing the counsel the Court made the following
O R D E R
1. The Special Leave Petition stands disposed of in terms of
the signed order.
2. The relevant part of the signed order is as under:-
“we dispose of this petition with a direction to the
Corporation to calculate the interest on the
requisite amount, i.e., Rs. 4,97,72,000/- over a
period of time at the rate of 6% simple interest.
The amount shall be calculated and paid to the
petitioner within a period of four weeks from today.
19. If there is any confusion as regards the
calculation more particularly the time period, the
petitioner may make the Corporation understand with
an appropriate statement on paper.”
3. Pending application(s), if any, stands disposed of.
(CHANDRESH) (POOJA SHARMA)
ASTT. REGISTRAR-cum-PS COURT MASTER (NSH)
(Signed order is placed on the file)
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