India, March 12 -- Money received and retained without legal authority carries with it the right to interest - even for the government - the Supreme Court has ruled, stressing that undue retention of any money warrants proper compensation to its owner by the state and its departments.

"Money received and retained without right carries with it the right to interest. There being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue department of the Government cannot shrug off its apparent obligation to reimburse the deductor's lawful monies with accrued interest for the period of undue retention of such monies," a bench of justices JB Pardiwala and R Mahadevan stated in its Febr...