fee. The plain(cid:12)ff ins(cid:12)tuted a civil suit challenging the said recovery. By judgment dated 19.04.1991, the Senior Sub-Judge, Sangrur directed the plain(cid:12)ff to discharge this liability in eight equal half-yearly instalments payable between November 1991 and May 1995, subject to the condi(cid:12)on that in case of default the authori(cid:12)es could recover the amount in lump sum in accordance with law. Importantly, the Market Commi,ee was not a party to that earlier li(cid:12)ga(cid:12)on.

4. The plain(cid:12)ff therea-er paid several instalments towards the principal amount of the fee. Subsequently, however, the Market Commi,ee issued a demand no(cid:12)ce dated 27.10.1994, requiring the plain(cid:12)ff to pay interest at the rate of 18% per annum on the unpaid balance of the rural development fee from the date on which recovery had been stayed by this Court during the pendency of the earlier writ pe(cid:12)(cid:12)ons. The legality of this demand for interest was ques(cid:12)oned by the plain(cid:12)ff by filing the present suit, wherein a declara(cid:12)on was sought that the claimed amount of ₹1,75,159/- was illegal and not recoverable, together with a consequen(cid:12)al permanent injunc(cid:12)on restraining the Market Commi,ee from effec(cid:12)ng recovery.

5. The Market Commi,ee defended the demand, asser(cid:12)ng that interest was a legal incident of the delayed payment of a statutory levy and was recoverable par(cid:12)cularly because the plain(cid:12)ff had enjoyed interim protec(cid:12)on under the writ-stay orders.

6. Upon trial, the Civil Court decreed the suit on 11.08.1998, holding that in the absence of a specific provision authorising interest, the Market Commi,ee was not competent to impose the same.

7. On appeal, the First Appellate Court partly modified the decree. While holding that the Market Commi,ee was en(cid:12)tled to recover interest in accordance with law, it restricted such en(cid:12)tlement only to the period a-er 05.10.1993, i.e., the date on which Sec(cid:12)on 5(2-A) was inserted into the 1987 Act, and declined the claim for interest pertaining to the period prior thereto.

The Market Commi,ee has challenged this limita(cid:12)on before this Court.

8. On the other hand, the plain(cid:12)ff firm filed cross-objec(cid:12)ons contending that appellate court has wrongly allowed interest on RDF a-er

5.10.1993. It prayed for restora(cid:12)on of trial court judgment

9.1 Conten(cid:6)ons : The learned counsel for the appellant contends that during the pendency of the writ pe(cid:12)(cid:12)ons challenging the levy itself, this Court had granted an interim stay of recovery, condi(cid:12)onal upon the pe(cid:12)(cid:12)oners furnishing security and subject further to the s(cid:12)pula(cid:12)on that if the writ pe(cid:12)(cid:12)ons were dismissed, the pe(cid:12)(cid:12)oners would be liable to pay the fee together with interest at 12% per annum from the date it had become due. The pe(cid:12)(cid:12)ons having been dismissed on 09.03.1990, it is urged that the liability to pay interest stood crystallized by virtue of the stay order itself. It is further contended that once the plain(cid:12)ff defaulted in the (cid:12)mely payment of instalments as ordered by the Civil Court in the earlier suit, the Market Commi,ee was jus(cid:12)fied in issuing the impugned no(cid:12)ce dated 27.10.1994 demanding statutory interest at 18% per annum.

9.2 It is also submi,ed that even independently of the subsequent statutory amendment, the Market Commi,ee was en(cid:12)tled to levy interest either by virtue of Sec(cid:12)on 3 of the Interest Act, 1978, or upon the equitable doctrine of res(cid:12)tu(cid:12)on, because the plain(cid:12)ff had withheld statutory dues during the subsistence of judicial interven(cid:12)on.

10. There was no appearance on behalf of the plain(cid:12)ff – respondent in this appeal despite opportunity. The ma,er has been examined on merits.

11. Analysis and Findings: The Punjab Rural De