Litigants are entitled to interest lost through registry negligence, recoverable from responsible officials.

LIC deposited policy proceeds in a pending partition suit, but the Court Registry did not invest the amount in a fixed deposit.

The trial court, by order dated 18 September 2017, directed the Registry to pay interest from the date of deposit until the cheque was issued, at the rate prescribed by the Reserve Bank of India, and to recover the amount from the officials responsible for the lapse.

The Principal City Civil and Sessions Judge and the Registrar challenged those directions, contending that the Registry and its officials could not be made liable for the interest loss.

1. Whether the Court could direct payment of interest to the persons entitled to the deposited amount when the Registry had failed to invest it in an interest-bearing deposit.

2. Whether the interest component could be recovered from the officials responsible for the Registry’s failure to invest the amount.

The Court applied the principle that a litigant should not suffer because of a mistake or omission of the Court, referring to the Constitution Bench decision in A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602.

It also relied on a Division Bench decision concerning analogous circumstances, which upheld an award of interest where a court deposit was not invested as directed and stated that the amount could be recovered, in accordance with law, from the Registry officials responsible for the non-compliance.

Under these principles, a failure attributable to court administration cannot deprive a litigant of interest the deposited amount would otherwise have earned, and recovery may be pursued against responsible officials.

The LIC proceeds remained with the Court while the suit was pending, and the Registry’s failure to invest them deprived the persons ultimately entitled to the proceeds of the interest they would otherwise have earned.

Applying the Division Bench’s reasoning, the Court held that the resulting loss could not be placed on the litigants and that the Registry’s administrative omission did not excuse payment of the interest component.

It also rejected the challenge to recovery from the responsible officials, consistent with the Division Bench’s statement that recovery could be made from erring officials in accordance with law.

Finding no ground to interfere with either the direction to pay interest or the consequential direction concerning recovery from the officials responsible for the lapse, it dismissed the writ petition as devoid of merit.