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No interest on amount under lien

The Supreme Court has allowed the appeal of the railways against the judgment of the Madras High Court which had asked it to pay interest on the amount withheld from a contracting firm and deposited in the high court. The high court had appointed an arbitrator in the dispute between the railways and the contracting firm. The award went against the railways. The high court had asked the railways to pay interest to the firm on the refund. The railways appealed to the Supreme Court. In the appeal case, Union of India vs Concrete Products & Constructions, the Supreme Court ruled that under the terms of the contract the railways shall be entitled to withhold the amount, and also have a lien on it, deposited as security. The contractor cannot claim any interest or damages for retention of the amount under lien, the judgment stated quoting the contract.

 Article referred: http://www.business-standard.com/article/opinion/interest-payable-on-tds-refund-114033000786_1.html

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