Equity

Rule to award interest in equity

In Ghaziabad Development Authority Vs. Union of India and Another, the Supreme Court awarded interest @ 12% per annum to meet ends of justice as the authority was found to be at fault. This was in spite of the fact that as per the brochure, the said authority was not liable to pay any interest on refund of money.

In South Eastern Coalfields Ltd. Vs. State of M.P. and Others, , it was observed that the applicability of the rule to award interest in equity is attracted on the existence of a state of circumstances being established, which justify exercise of such equitable jurisdiction and such circumstances can be many. Moreover in the present case, the appellants had also written letters dated 20th February, 2004 and 16th July, 2004 for refund and payment of interest. The said letters constitute notice u/s 3 of the Interest Act, 1978. Interest is also payable in terms of Interest Act, 1978.

Categories: Equity