Unjust Retention Of Money Or Property Of Another Is Against Fundamental Principles And Patently Illegal: Jharkhand HC Imposes Rs 5 Lakh Penalty On JBVNL, Directs Board To Refund TDS

The Jharkhand High Court has held that any unjust withholding of money or property from another party goes against the fundamental principles of justice, fairness, and good conscience. In this context, the unauthorized deductions made from the ongoing bills are unquestionably unlawful.

Furthermore, the Court has imposed a substantial penalty of Rs 5 Lacs on the Managing Director of Jharkhand Bijli Vitran Nigam Limited (JBVNL) for engaging in unnecessary litigation and presenting frivolous defenses.

The Division Bench, comprising Acting Chief Justice Shree Chandrashekhar and Justice Navneet Kumar, emphasized, “Any unjust retention of money or property of another shall be against the fundamental principles of justice, equity and good conscience. The unauthorized deductions from the running bills of the petitioner-Firm are patently illegal. Such deductions caused loses to the petitioner-Firm which filed its Income Tax retuns but was deprived of Rs. 2,90,32,000/- and thereby suffered business or alteast interest losses. On the other hand, the JBVNL was unjustly enriched and need to restitute the petitioner-Firm. The refund of Rs. 2,90,32,000/- must therefore carry interest as a matter of course.”

Anvil Cables, a private limited company, sought High Court intervention to compel JBVNL to issue a Tax Deducted at Source (TDS) Certificate for Rs. 2,90,32,000, which had been withheld without justification. JBVNL, in response, had appealed the demand notice from the Petitioner to the CIT(Appeal).

The Court expressed, “The imposition of cost on the party which started litigation without any just cause or took false and frivolous defences is necessary to discourage the dishonest litigant. To this end, the Court is required to impose such cost that would make the litigant think twice before putting up any speculative claim or defence."

“The Petitioner-Firm was unnecessarily dragged to the Court and, that too, knowingly and for no fault on its part. The litigation file that has been produced in the Court reveals that a decision in the context of the order dated 14th March 2024 passed by this Court has been taken at the highest level of the Managing Director of JBVNL. Therefore, we are of the definite opinion that the JBVNL must be saddled with cost of Rs.5 Lacs which shall be recovered from the Managing Director,” the Court further observed.

The Court ruled in accordance with clause 10.7.4 of the Jharkhand State Electricity Regulatory Commission, Ranchi (Electricity Supply Code) Regulation, 2015, stating that the interest rate applicable to any excess amount paid by the consumer should match the interest rate charged by the consumer on delayed payment surcharges.

Thus, the Court directed the Regulatory Commission, Ranchi (Electricity Supply Code) Regulation, 2015, to enforce this provision, compelling JBVNL to pay interest on the withheld amount of Rs. 2,90,32,000/- as per the specified clause.

Consequently, the Court granted the petition.

Case Title: Anvil Cables Pvt. Ltd. v. State of Jharkhand and Ors.

LL Citation: 2024 LiveLaw (Jha) 64

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