Bombay High Court: In a writ petition filed under Article 226 of the Constitution of India (“Constitution”) before the Division Bench of MS Karnik & Kamal Khata*, JJ., for seeking a refund of amount deposited with the Sub-Divisional Officer (“SDO”), Mumbai Western Suburbs, as a part of the application process to secure the Mumbai Metropolitan Region Development Authority (“MMRDA”), Ground as the venue for an event, the Court held that in the instance of cancellation of the event, the SDO was obligated to issue the refund as the opposite amounts to an unjust enrichment.
Background
The petitioner was a Reverend who wanted to organise a Prayer Meet at the Mumbai Metropolitan Region Development Authority (MMRDA), Ground in Bandra Kurla Complex, Mumbai in May 2022. In order to secure the venue, the petitioner was required to have the permission of the local police station, the Sub-Divisional Officer (“SDO”), Mumbai Western Suburbs, and two local Fire Officers. In addition to seeking official permissions, the petitioner was also required to deposit a sum of Rs. 18,23,913 with the MMRDA, Rs. 2,57,405 with the SDO, and Rs, 8,03,150 and 57,850 with the Fire Department.
However, due to the refusal of the local police station to grant permission, the event was cancelled, and all the various sums deposited by the petitioner with the above-mentioned offices were refunded, except the SDO. Since the SDO neither paid nor communicated any reasons for the refusal to refund the amount, the petitioner was compelled to file this petition under Article 226 of the Constitution.
Through the petition, a refund of Rs.2,57,405 along with an interest of 18% per annum from the Brihanmumbai Municipal Corporation (“BMC”) was sought by the petitioner, who contended that the refusal to refund was a violation of Articles 14, 19(1) and 21 of the Constitution, and that the SDO did not have any lawful authority to withhold the sum deposited with their office.
The SDO (“respondents”) contended that the refund was withheld due to an absence of a policy for the refund of sums deposited in the instance of cancellation of an event.
Court’s analysis and judgment
The Court stated that they were baffled by the respondents’ stand of an absence of policy for refunds, and that there was alternatively no policy for forfeiture of amounts deposited as a part of the procedure for the ‘application for permission’ for an event as well.
The Court emphasised that petitioner would be entitled to a refund in the event of a cancellation of the program they were seeking to organise, as a forfeiture of such amounts would lead to unjust enrichment of the respondents. The Court also highlighted the fact that the respondents did not show any terms, conditions, provisions or a circular to base their refusal of refund on, and therefore failed to display any authority in law to withhold such sum in such circumstances.
The Court viewed that the absence of any such authority in the application or agreement between the petitioner and the respondent, or any statutory provision or circular renders the respondents disentitled to withhold the amount deposited with them. It further viewed that the petitioner should not have been compelled to file a petition for a refund in the first place as it was obligatory upon the SDO to issue the refund.
The Court referred to the case of, Hongkong and Shanghai Banking Corporation v. Union of India, 2023 SCC OnLine Bom 2535, wherein the Court held that if ex facie the department has no authority to retain an amount, the same ought to be refunded and if it is not refunded, it would amount to unjust enrichment.
Further, the Court also referred to Kesar Corporation v Municipal Corporation of Greater Mumbai, 2024 SCC OnLine Bom 765, wherein it was held that MCGM is an instrumentality of the State and thus cannot withhold an amount collected without the authority of law; such an action or argument is dangerously close to every principle of unjust enrichment, apart from transgressing all manner of vices under Article 14 of the Constitution of India.
Taking note of Supreme Court’s decisionin the case of Alok Shanker Pandey v Union of India, 2007 SCC OnLine SC 210, the Court held that petitioner would be entitled to claim a refund along with interest. However, the petitioner did not press for the interest in the light of its insignificant amount.
Therefore, the Court finally directed the respondents to refund the sum of Rs. 2,57, 405 to the petitioner within two weeks from the date of order. The Court also held that petitioner entitled to costs, however, the petitioner magnanimously refrained from pressing for the costs.
The BMC requested a stay on the order, that was rejected by the Court; however, appreciating the engagement of officers in election duties, the Court extended the order compliance date from two weeks to four weeks from the date of order.
[Pradip v. State of Maharashtra, 2024 SCC OnLine Bom 1372, Decided on 16-05-2024]
*Judgment Authored by: Justice Kamal Khata
Advocates who appeared in this case :
Advocate for the Petitioner: Vinod P Sangvikar
Advocates for the Respondents: MP Thakur, AGP, Vaishali Chaudhari, Aslam Tadvi, Anand Khairnar, Santosh Parad and Ravindra Shirsekar
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