The Supreme Court ordered a refund of excess payment made towards coal lifting holding that the Jharkhand High Court had completely ignored pertinent directions issued regarding interest rates on the refund.

Domco Smokeless Fuels, the appellant, had claimed to have paid a higher price than the notified price in an e-auction for coal lifting and sought a refund.

When the refund was not acceded to, the appellant approached the Jharkhand High Court which allowed the refund of the excess amount through its order. However, the payment was not made despite the High Court’s order.

Consequently, the appellant filed a contempt application before the High Court alleging non-compliance of the order of the High Court which was subsequently dismissed.

The High Court had rejected the claim of the appellant holding that the demand was exaggerated. The Supreme Court remarked that while drawing such inference, the High Court had completely ignored their judgment in Ashoka Smokeless Coal Industries(P) Ltd. & Ors. v. Union of India & Ors. (2006) 9 SCC 228 wherein other companies who claimed such refund were directed to be given the refund of the excess amount with an interest of 12% per annum.

Justice B.R. Gavai and Justice Sandeep Mehta observed, “Admittedly, the appellant has not been refunded the amount for the period running from 1st January, 2007 till March, 2008 and, therefore, the learned Single Judge was not justified in discharging the respondents in the contempt case without ensuring payment of the refund amount with interest to the appellant herein.

Sr. Advocate Shekhar Naphade represented the appellant, while Sr. Advocate S B Upadhyaya appeared for the respondents.

The appellant referred to the Supreme Court’s decision in the Ashoka Case and argued that the Apex Court had directed a refund of excess payments along an interest at a rate of 12% per annum. However, the appellant was provided the refund at a lower interest rate of 3.5% per annum, which was insufficient as per the appellant's interpretation of the Court's previous order. Therefore, the appellant contended that they too were entitled to the higher interest rate specified by the Supreme Court.

The Court stated that “the interest which has been applied on the refund amount for the period between 1st January, 2005 to 11th December, 2005 is at the bank rate i.e. 3.5% per annum. Evidently thus, the respondents have failed to faithfully comply with the orders passed by the Jharkhand High Court as well as this Court.

The Court held that the appellant was entitled to receive a refund for the excess amount paid by them along with an interest of 12% per annum on the refund amount.

Accordingly, the Supreme Court disposed of the appeal.

Cause Title: M/S. Domco Smokeless Fuels Pvt. Ltd. V. State Of Jharkhand & Ors. (Neutral Citation: 2024 INSC 133)


Appellant: Sr. Advocate Shekhar Naphade; AOR Manish Kumar Saran; Advocates Ananya Tyagi, Satya Prakash Sharan, Aishwarya Dash, Farah Hashmi, Prashant Pratap and Anoop Raj

Respondents: Sr. Advocate S B Upadhyaya; AOR Neeraj Kumar Gupta; Advocates Shivang Srivastava, Rahul Kumar Verma, Ranjeet Kumar Singh and Abhishek

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