IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3485 OF 2011 [Arising out of SLP(C) No.32014 of 2010]

State of Tamil Nadu & anr. .......Appellants  

Versus

M/s. Saketh India Ltd. .....Respondent

O R D E R

Leave granted.  

2. A quarrying lease was granted for ten years  

in favour of the respondent.  Subsequently, the respondent  

submitted a representation to the appellant to refund the  

lease amount of `  44.55 lakhs on the ground that the lease  

area was forest area and the forest department was in the  

process  of  declaring  it  as  reserved  forest.   As  the  

appellant did not refund the amount, the respondent filed a  

writ petition seeking refund of `  44.55 lakhs with interest  

at 24% per annum.  A learned single Judge, by order dated  

13.11.2006, allowed the writ petition and directed refund  

of  the  lease  amount.   He  did  not,  however,  award  any  

interest.  Feeling aggrieved, the respondent filed a writ  

appeal. The appellate Bench granted interest at 18% per  

annum on the analogy of the provision for interest under  

Rule 36B.  The said order is challenged by the State in  

this appeal by special leave.

.......2.

- 2 -

3. It  is  stated  by  learned  counsel  for  the  

appellant that the lease amount has already been refunded  

and the issue is only regarding interest. He submitted that  

there  is  no  contract  or  statutory  provision  governing  

interest  and  in  the  circumstances,  the  directions  for  

payment of any interest, in particular, at the rate of 18%  

per annum, was not warranted.

4. On the facts and circumstances, we are of the  

view that interests of justice would be served if the rate  

of interest is reduced from 18% per annum to 12% per annum.  

We allow the appeal in part, accordingly.

  ......................J.             (  R.V.  

RAVEENDRAN )

New Delhi;    ......................J. April 21, 2011.                    ( A.K. PATNAIK )