The Delhi High Court has rejected a civil suit filed by Amrit Environmental Technologies Private Limited seeking over ₹2.53 crore as interest on the alleged delayed release of an interest subsidy by the Union Government, holding that the plaintiff could not create a fresh cause of action after having accepted the principal subsidy amount without protest and withdrawing earlier proceedings without reserving any right to seek interest.
Justice Mini Pushkarna allowed the Union Government’s application under Order VII Rule 11 of the Code of Civil Procedure, 1908, and rejected the plaint at the threshold, observing that it failed to disclose a real cause of action and was barred by the principles of acquiescence.
The plaintiff had established a 7.5 MW biomass power plant in Rajasthan and claimed entitlement to an interest subsidy under a 2003 Ministry of New and Renewable Energy (MNRE) notification. Although the subsidy amount of ₹1.96 crore was eventually released on 31 August 2023 after multiple rounds of litigation spanning nearly 17 years, the company subsequently instituted the present suit seeking interest on account of the alleged delay in disbursement.
The Court noted that the plaintiff had earlier filed three writ petitions seeking release of the subsidy amount but never claimed interest for the alleged delay in any of those proceedings. It further observed that when the final writ petition was withdrawn in May 2023, the plaintiff accepted the Government’s assurance regarding release of the subsidy and did so without protest, reservation or seeking liberty to pursue a subsequent claim for interest.
Rejecting the contention that the cause of action to seek compensatory interest arose only after receipt of the subsidy amount, the Court held that the alleged delay was already within the plaintiff’s knowledge during the earlier litigation. Merely because the exact computation of interest became possible after payment of the principal amount did not give rise to a fresh or independent cause of action.
The High Court observed that the plaintiff had, through clever drafting, attempted to camouflage an illusory cause of action as a real one. It held that the omission to seek interest in the previous proceedings was a conscious decision and that the plaintiff could not subsequently reopen the dispute after unconditionally accepting the principal amount.
Holding that the plaint disclosed no real cause of action and was also barred by the principle of acquiescence, the Court rejected the suit under Order VII Rule 11(a) and (d) CPC, reiterating that courts must terminate sham or vexatious litigation at the threshold where clever drafting creates only the illusion of a cause of action.
