Interim orders merge with final orders upon dismissal of proceedings, restoring parties to their original position unless specified otherwise.

ORDER :

(BIREN VAISHNAV, J.) 

Heard Ms. Natasha Sutaria, learned Counsel for the appellant and Mr. Chirayu A Mehta, learned Counsel for the respondent. 

2. An application is filed in the appeal by the management of the company for direction to the registry that the amount so deposited be refunded to the company. The appeal is filed by the appellant, which was the erstwhile management of the company which is provisionally wound up. It is the case of the appellant that, by an order dated 14.03.2019, provisional appointment of the Official Liquidator was ordered.

3. It appears that, by an order dated 13.06.2019, in order to demonstrate the bonafide and the capacity to pay, the appellant deposited an amount of Rs.20,00,000/- before the registry of this Court. That is not even disputed by the learned Counsel for the Official Liquidator. That amount was deposited on 28.06.2019. It appears that the proceedings came to be transferred to the National Company Law Tribunal ("NCLT" for short) vide order dated 11.04.2022.

4. Mr. Chirayu Mehta, learned Counsel for the Official Liquidator had an objection to the withdrawal of the amount in light of the fact that the Official Liquidator has incurred Rs.37,94,642/- towards security charges which have to be paid to M/s. Chamunda Security Force, empanelled security agency for safeguarding the assets and properties of the company in liquidation. 

5. We have been taken through a decision of the Supreme Court in the case of State of U.P. Thr. Secretary and Ors. vs. Prem Chopra in Civil Appeal No. 2417 of 2022. Learned Counsel for the appellant would rely on paragraph Nos. 24 and 25 of the said decision, which read as under:-

"(24) From the above discussion, it is clear that imposition of a stay on the operation of an order means that the order which has been stayed would not be operative from the date of passing of the stay order. However, it does not mean that the stayed order is wiped out from the existence, unless it is quashed. Once the proceedings, wherein a stay was granted, are dismissed, any interim order granted earlier merges with the final order. In other words, the interim order comes to an end with the dismissal of the proceedings. In such a situation, it is the duty of the Court to put the parties in the same position they would have been but for the interim order of the court, unless the order granting interim stay or final order dis missing the proceedings specifies otherwise. On the dismissal of the proceedings or vacation of the interim order, the beneficiary of the interim order shall have to pay interest on the amount withheld or not paid by virtue of the interim order.

(25) Coming to the facts of the present case, the respondent was not successful in his challenge to the notice dated 06.01.2003 demanding the balance of license fee before the Authorities under the Act. Therefore, he filed the writ petition bearing Misc. Single No.2582 of 2003 before the High Court wherein the High Court, by an interim order, stayed the recovery of the monthly instalment of license fee for the months January 2003 to March 2003, subject to deposit of Rs.2,75,000/ within a period of six weeks before the District Excise Officer. It is not disputed that this amount of Rs.2,75,000/ was deposited by the respondent. The said writ petition was dismissed by the High Court for non-prosecution vide Order dated 21.12.2015. On 23.12.2017, the respondent deposited the remaining amount of Rs.3,68,562/ towards license fee. However, the respondent did not make payment of interest to the Department. The writ petition was restored on 19.01.2018. In the meantime, the appellants issued a notice calling upon the respondent to pay Rs.10,08,210.51/ towards interest due. The High Court held that the respondent was not liable to pay interest as he was under the protection of the interim order. Given the settled position of law, in our view the High Court has erred in holding that the respondent was not liable to pay interest due