1. Leave granted.
The only question in these appeals is whether the appellant-authority should have been paid the interest on the purchase price which was refunded by the respondents. The issue arose in connection with the compulsory purchase of the respondents' property said to have been effected by the appropriate authority under Chapter XX-C of the Income-tax Act, 196 1.
2. Possession was taken by the department on 17-6-1993. On 17-7-1993, the purchase price was paid by the appellant to the respondent-owners. Subsequent to this, the respondents filed a writ petition impugning the purchase order and were successful in obtaining an interim order staying further operation of the purchase order. The writ petition was ultimately allowed by the learned Single Judge who set aside the purchase order and directed that the appellant should return possession of the premises to the respondent-owners who in turn were to return the purchase price together with interest calculated thereon at 15 per cent per annum.
3. The appellant did not impugn this order by way of an appeal. The respondent-owners did. They were aggrieved by the direction of the learned Single Judge relating to the grant of interest. The grievance of the respondents was upheld by the Division Bench and the direction of the learned Single Judge insofar as it related to the payment of interest was set aside.
4. The appellant has claimed that the respondent-owners had enjoyed the benefit of the purchase price for several years. On the other hand, the appellant had been deprived of the right to sell the property which it could have done under Chapter XX-C of the Income Tax Act, 1961. The possession, as far as the appellant was concerned, in essence was "fruitless".
5. We have perused the decision of the Division Bench and find that no reason as such has been given for setting aside the discretionary order of the learned Single Judge granting interest to the appellant.
6. Under normal circumstances we would have directed the grant of interest at the rate of 15 per cent as directed by the learned Single Judge, having regard to the fact that the respondents had enjoyed the amount during the relevant period of time. However, since technically speaking the appellant was in possession of the property, while setting aside the decision of the Division Bench insofar as it did away with the grant of interest, we reduce the rate of interest to seven and half per cent which is to be calculated for the period commencing with the date of receipt of the purchase price by the respondents up to the date the same was returned to the appellant.
7. The appeals are disposed of. There shall be no order as to costs.