Introduction:

The Jharkhand High Court recently concluded contempt proceedings initiated against the Secretary, Department of Excise and Prohibition, Government of Jharkhand, following compliance with its orders regarding the payment of statutory interest to Spencer Distilleries and Breweries (Pvt. Ltd.). The case arose from the State’s failure to fully adhere to court directives issued in October and November 2024, mandating the refund of the petitioner’s principal amount along with statutory interest. While the principal amount was paid, the delay in settling statutory interest led to contempt proceedings. The High Court, after being informed of the payment by the petitioner’s counsel, Mr Shekhar Sinha, disposed of the matter on January 10, 2025. Justice Sujit Narayan Prasad emphasized that with the grievance of the petitioner addressed, the case was closed, and the personal appearance of the Secretary was dispensed with.

Arguments by the Petitioner:

The petitioner, Spencer Distilleries and Breweries (Pvt. Ltd.), represented by counsel MMrShekhar Sinha, argued that the State had acted in contempt of the court’s clear and binding orders. The October 18 and November 22, 2024, orders explicitly directed the refund of the principal amount along with statutory interest. While the principal amount was refunded, the State delayed the payment of statutory interest, thereby failing to comply with the court’s orders in full. The petitioner contended that the delay was deliberate, as the respondents moved the file between departments instead of addressing the issue promptly. The petitioner emphasized that statutory interest was part of the refund, and the State’s excuses reflected an unwillingness to comply with judicial directives. The petitioner filed contempt proceedings to seek enforcement of its legal rights and ensure accountability for the delay.

Arguments by the Respondents:

The respondents, including the State of Jharkhand and the Secretary of the Department of Excise and Prohibition, argued that the delay in payment of statutory interest was not intentional but due to procedural confusion. They submitted that the Excise Laws lacked clarity on what constituted statutory interest and sought clarification from various departments, including the Finance Department, the Law Department, and the Advocate General. The respondents stated that the delay arose from the time taken to obtain opinions and ensure proper compliance. They also claimed that there was no deliberate attempt to defy the court’s orders but admitted procedural inefficiency in addressing the issue promptly. In their show-cause submissions, the respondents maintained that the statutory interest had now been paid, resolving the petitioner’s grievance.

Court’s Observations and Judgment:

Justice Sujit Narayan Prasad, presiding over the matter, expressed strong disapproval of the State’s handling of the issue. The court observed that the delay in paying statutory interest, despite clear judicial orders, demonstrated a “callous and indifferent attitude.” Justice Prasad criticized the respondents for moving files between departments and seeking unnecessary clarifications instead of complying with the court’s directives. The court rejected the respondent’s argument that the Excise Laws lacked clarity on statutory interest, stating that the confusion was a deliberate attempt to evade responsibility.

In its December 13, 2024, order, the court highlighted that if the respondents faced genuine confusion, they should have sought clarification from the court rather than delaying compliance. The court also noted that the respondents’ inability to understand the term “statutory interest” further evidenced their unwillingness to fulfil their obligations. It was emphasized that once a court order is passed, it must be adhered to in both letter and spirit, and administrative delays cannot be used as an excuse.

During the January 10, 2025, hearing, the court was informed by the petitioner’s counsel that the statutory interest had been paid. Acknowledging the compliance, Justice Prasad closed the contempt proceedings, noting that the petitioner’s grievance had been redressed. The court also dispensed with the personal appearance of Manoj Kumar, Secretary, Department of Excise and Prohibition. While disposing of the matter, the court reiterated the importance of timely compliance with judicial orders to uphold the rule of law and maintain public confidence in the justice system.