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State Govt. of Andhra Pradesh Vs. Manickchand Jeevraj and Co., Bombay - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. No. 423 of 1970
Judge
Reported inAIR1973AP27
ActsCode of Civil Procedure (CPC), 1908 - Sections 144 and 151
AppellantState Govt. of Andhra Pradesh
RespondentManickchand Jeevraj and Co., Bombay
Appellant AdvocateT. Anantha Babu, Adv.
Respondent AdvocateJ.V. Vaidya, Adv.
Excerpt:
civil - restitution - sections 144 and 151 of code of civil procedure, 1908 - matter of interpretation of principle of restitution raised - under section 144 principle of restitution to be invoked where order or decree of any civil court is varied - variation may be made by same court which passed order/decree or by appellate court in appeal against order/decree. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on..........incorporated in section 583 of the code of civil procedure 1882. section 144(1) of the present code (code of civil procedure 1908) is the corresponding section which provides for the rule of restitution.6. the scope of section 144(1) and content of restitution had been succinctly laid down by the privy council in jai berham v. kedar nath, 49 ind app 351 - (air 1922 pc 269) as follows:'it is the duty of the court under section 144 of the civil procedure code to place the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed. nor indeed does this duty or jurisdiction arise merely under the said section. it is inherent in the general jurisdiction of the court to act rightly and fairly according to the circumstances.....
Judgment:

Kondaiah, J.

1. The Respondent herein, on July, 29, 1958 purchased the properties of M/s Govardhana Gold Fields Co. Ltd., which started gold mining at Narayananagar in Palamaner taluk, Chittoor district, for a sum of Rs. 1,70,000/-. The aforesaid Gold Fields company owned about Rs. 5,59,152.50 p. Towards electric charges as per the statement of Andhra Pradesh Electricity Department, towards the recovery of which the Deputy Tahsildar, Kuppam, by virtue of the powers vested in him under the Revenue Recovery Act, attached movables of the company worth about Rupees 24,000/- on December 10, 1958. The claim petition of the respondent on the basis of its purchase from Govardhana Gold fields to the District Collector was dismissed on December, 13, 1958. The District Collector affirmed the attachment in the same order. Thereupon , O.S.24/59 on the file of the Court of the Subordinate Judge, Chittoor for declaration of the claimant's right to and possession of the properties purchases by it from Govardhana Goldfields on 29.7.1958 was filed against the State. Pending the suit, the plaintiff prayed in I.A. 152/59 for possession of the attached moveables on the ground that they were perishable. The court raised the attachment on condition that the plaintiff should deposit Rs. 24,000/- for which amount the moveables were attached. Pursuant to the conditionals order made by the court, a cheque for a sum of Rs. 24,000/- drawn in favour of the State was handed over to the Govt. Pleader in the lower court on 25.4.1959. The suit was ultimately decreed as prayed for on 13.3.1961. The appeal A.S. 28/62 preferred by the State to this court was dismissed. E.P. 97/68 under Section 144 of the code of Civil Procedure for restitution of the amount paid to the Government with interest at 6% per annum and execution costs was filed by the respondent decree-holder on August 19, 1968. The E.P. was resisted by State contending inter alia that the restitution is not permissible and in any event, the decree holder is not entitled to the payment of interest and the costs. However, it may be stated that the state had deposited Rupees 24,000/- in to the lower court on January 9, 1970 and the same was paid to the respondent decree-holder and satisfaction to that effect was recorded. The lower court allowed the E. P. Hence this appeal.

2. The contention of the appellant is that the application for restitution under Section 144, C.P.C. is not maintainable on the ground that there is no variation or reversal of the order of any civil court in an appeal and that, in any event, the decree-holder is not entitled to payment of interest. The respondent's counsel contended contra. The two questions that arise for determination in this appeal are:

(1) Whether the application for restitution of the amount of Rs. 24,000/- paid by the respondent on 25.4.1959 is or is not maintainable?

(2) whether, on the fact and the circumstances, the respondent decree holder is entitled to interest from 25.4.1959 till 9.1.1979 on the amount of Rs. 24,000/-.

3. In order to appreciate the respective contentions of the parties, it is necessary to advert the concept and content of restitution. The earliest case where the doctrine of restitution was stated in Shame Pershad v. Huro Pershad (1863-66) 10 Moo Ind App 203 (PC), wherein the juridicial committee observed:

'If it ( the original decree or judgment) has been so reversed or suspended the money recovered under it ought certainly to be refunded.'

4. The aforesaid view has been reiterated by the Privy Council in Alexander Rodger v. Comptoir D'Escompte De Paris, (1871) LR 3 PC 465 thus:

' One of the first and highest dues of the all courts is to take care that the act of the court does no injury to any of the suitors'.

5. The principle of restitution enunciated by the Judicial committee in the cases referred to above and had been incorporated in Section 583 of the Code of Civil Procedure 1882. Section 144(1) of the present code (code of Civil Procedure 1908) is the corresponding section which provides for the rule of restitution.

6. The scope of section 144(1) and content of restitution had been succinctly laid down by the Privy Council in Jai Berham v. Kedar Nath, 49 Ind App 351 - (AIR 1922 PC 269) as follows:

'It is the duty of the court under Section 144 of the Civil Procedure Code to place the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed. Nor indeed does this duty or jurisdiction arise merely under the said section. It is inherent in the general jurisdiction of the court to act rightly and fairly according to the circumstances towards all parties involved.'

The same view has been reiterated by the Supreme Court in Bhagwant Singh v. Kishen das, : [1953]4SCR559 :

'.........................the doctrine of restitution.......................... is that on the reversal of adjudgment the law raises on obligation on the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the court to enforce that obligation unless it is shown that restitution would be clearly contrary to the real justice of the case.'

7. The principle of restitution envisaged under Section 144(1) of the Code of Civil Procedure shall be applied for the purpose of restoring the parties to a cause to their respective places where a decree or order is varied or reversed by the same court or appellate or revisional court. The essence of this rule is to see that no party should derive any benefit or advantage on account of an erroneous or illegal order or decree of a court, which is ultimately varied or reversed in due course of law. In other words, where parties have pursuant to a decree or order passed by the court of first instance obtained any advantage or benefit either by execution of such order or decree or otherwise, the court, under Section 144, has a duty to restore the parties to their respective original positions or places as if the original decree or order which has been reversed or varied subsequently either by the same, appellate or revisional court was not passed or in existence. No party can take advantage of the wrongful acts or orders or decrees of any court. The provisions of the Section 144 are mandatory. The use of the word ' shall' makes it obligatory on the court , on the application of any party entitled for restitution, to place the parties in the position which they would have occupied but for such erroneous or illegal decree or order or any part thereof as has been varied or reversed. The court has no discretion to refuse the application to grant restitution if the ingredients of Section 144 are satisfied, However, the payment of interest on the amount ordered to be paid back in consequence of the variation or reversal of the order or decree is discretionary. The discretion vested in the court must be exercised fairly, reasonably and judicially but nor arbitrarily. Section 144 does not specify the payment of interest in cases where money is ordered to be repaid, but the use of the words ' place the parties in the position which they would have occupied but for such decree or order or such part thereof as has been varied or reversed' in section 144 indicates the jurisdiction for the payment of interest on the amount ordered to be paid back in restitution proceedings. We may notice the following weighty observation of the Judicial Committee in the case of Alexander Rodger (1871) LR 3 PC 465:

'.....................the practice of the courts in India, when there has been a reversal in this country and when money has been ordered in India to be paid back in consequence of that reversal, is to order the payment of interest'.

8. That apart, payment of interest just as damages, mesne profits or compensation is consequential of the very process of restitution. If the sum of money collected by or paid to the decree-holder in execution of a decree of the court of first instance, which is varied or reversed subsequently has not been so paid by or collected from the judgment-debtor, he (judgment debtor) would have certainly utilised that amount for his benefit and advantage, but at the same time, such decree-holder has the advantage of the utility of such money during the period commencing from the date of collection or payment till the date of repayment. Any order directing payment of interest on such amount is nothing but consequential. Such party cannot complain when he is asked to pay back the amount received by him pursuant to a wrong or illegal decree or order of the court with interest thereon at a reasonable rate. Where the decretal amount was in court deposit and the same was not actually utilised by the decree-holder, the request of the judgment-debtor, on variation or reversal of the decree of the court of first instance, for payment of interest on the amount so deposited ought to be refused.

9. In the light of the aforesaid discussion, we shall advert to the submission of the appellant that the order of attachment was not passed by a civil court and it is not reversed or varied by an appellate court and, therefore, the provisions of section 144, C.P.C. are not attracted in the instant case. True, the original order of attachment of movables of the respondent was made by the Deputy Tahsildar and the claim petition was rejected by the District Collector. It is pertinent to notice that the deposit of Rupees 24,000/- was not made by the respondent persuant to an order of attachment made by the Deputy Tahsildar or the order passed by the District Collector, Admittedly, that amount was paid to satisfy the conditional order passed by the Civil court in I. A. 152/59 on 25.4.1959 which was merged in the order passed by the civil court. The respondent become entitled to the repayment of the aforesaid sum of Rs. 24,000/- on the passing of a decree in its favour declaring its right to the moveables attached by the revenue authorities and in respect of which a sum of Rs. 24,000/- was deposited by it. True, the term ' order;' used in Section 144 must be interpreted to be ' the formal expression of any decision of Civil court' as defined under clause (14) of Section 2 of the Code. Hence, if any order other than the one passed by a civil court is varied or reversed, Section 144 of the Code does not come into play. Section 144 is attracted only where the order or decree of any civil court is reversed or varied, but not otherwise. However, we may state that there are instances where section 144 has been applied to an award passed by Land Acquisition Officer and an eviction order passed under a tenancy statute. In Dodha Mallaiah v. State of Andhra Pradesh, AIR 1964 Andh Pra 216 an award was passed by Land Acquisition Officer under section 26 of the Land acquisition act, 1894 was held to be an order of a court within the meaning of Section 48 of the Andhra Pradesh Fees and Suits valuation Act for the purpose of Court fee. Therein, it was observed that an award was a formal expression of the decision of a civil court, and was, therefore, an order defined under Section 2(14) of the Civil procedure Code. A division Bench of this court, in Puvvada Changayya v. Sub-Collector, Ongole, AIR 1966 Andh Pra 4, applied the provisions of Section 144 and Order 21, Rule 106 of the Code of Civil Procedure and directed restitution on a tenancy matter. Therein the tenant who was dispossessed by a wrongful eviction order of the revenue authorities, which has been reversed subsequently, was directed to be put in possession of the land once again on the application of the doctrine of restitution. We may add that under Rule 14 of the Andhra tenancy Rules, 1957, all proceedings before the Tahsildar or Revenue Divisional Officer under the tenancy act, are to be governed as far as may be by the provisions of the Code of Civil procedure. Similarly, the principle of restitution envisaged under the Section 144 C. P. C. Had been applied by the Allahabad High court in Vindhyachal Tewari v. Board of Revenue, : AIR1956All663 the suits under the U. P. Tenancy Act,. The court directed the party who obtained possession of the land pursuant to the order of the revenue authorities, to put in possession the party who had possession of the same before the passing of such order which was varied or reversed subsequently,. It may be noticed that the provisions of section 243 read with items 1 and 2 of the second schedule of the U. P. Tenancy act and Rule 5 of the Rules framed thereunder made the provisions of the code of Civil procedure applicable to suits under that Act.

10. The next point that requires consideration is whether the reversal or variation of the order or decree must be by an appellate or revisional court so as to attract the provisions of Section 144, C. P. C. Section 144 does not specify that the order or reversal or variation must be passed by an appellate or revisional court. The only indication found in the section is that there should be a variation or reversal of an order or decree. The variance or reversal of an order or decree contemplated under Section 144, C. P.C. need not be in appeal or revision. It may be by the same court, be it in the same proceeding or in a different proceeding. It may not be in the same proceeding or by the superior court. See Tangutur Subbarayudu v. Yerramsetti Seshasani, AIR 1917 Mad 293 = (ILR 40 Mad 299); Palaniappa Chettiar v. Ramanatha chettiar, AIR 1934 Mad 320 = (ILR 57 Mad 849); Alapati Ankamma v. Pavuluri Basava Punnayya, AIR 1945 Mad 360 and Maqbool alam Khan v. Mt. Khodaija Begam, AIR 1949 Pat 133 (FB). We need not examine all the cases referred to above. Suffice to refer the decision of a Division Bench of the Madras High court in AIR 1917 Mad 293 (supra) . Therein it was held that restitution under Section 144, C.P.C. is not restricted to variation or reversal of decrees or orders in appeals, but applies to cases where the judgment or decree has been reversed or suspended in any subsequent proceeding, be it in the same suit or another. This case is an authority for the proposition that rule of restitution will apply to cases where the validity of assignment of a decree was successfully challenged by the judgment debtor- the assignment of the decree in favour of the transferee was a private one. When the court declared the assignment as invalid, the judgment-debtor, who was compelled to deposit the decretal amount in the court in execution of the decree by the transferee-decree-holder, was held to be entitled for restitution under section 144 by virtue of the decree in the subsequent suit. It may also be noticed that a person attaching decree is a party within the meaning of Section 144 and is liable to make restitution as he is the representative of the original decree holder. (See J.P. Rego v. Ananthamathi, AIR 1943 Mad 472; Palaniappa Chettiar v. Ramanatha Chettiar AIR 1934 Mad 320 = (ILR 57 mad 849 and Mohd. Husain v. A.K.M. Pitchai, (1970) 2 mad LJ 663).

11. In the present case, the order pursuant to which the deposit of Rs. 24,000/- was made, was passed by the Civil court in I.A. 152/59. That order was in effect reversed by the final declaration made by the same court in the suit in favour of the plaintiff decree-holder. Though not in form but, in substance, the declaration made by the civil court in favour of the decree-holder in the suit would amount to the reversal or variation of the order made earlier in I.A. 152/59 whereunder the deposit of Rupees 24,000/- was made. It is really the substance but not the form of the order that should be looked into for the purpose of the application for the doctrine of restitution. The very principle of restitution is based on equity. Justice and fair play. (See Pappu Reddiar v. P.S.V.Ramanatha Iyer, : AIR1963Mad45 (FB) , Interest is part of normal relief which is consequent upon the grant of the main relief of restitution. The grant of interest is not controlled by Interest act, 1839. (See Subramonia v. Janardhanan, : AIR1962Ker297 and Pappu Reddiar v. P.S.V.R.M.Ramanatha Iyer, : AIR1963Mad45 (FB) (supra).

12. It is well settled that restitution can be ordered either under Section 144 of section 151 of the code of the Civil Procedure. Vide Jai Berham v. Kedar nath , 49 Ind App 351 - AIR 1922 PC 269; J.P.Rego v. Ananthamathi , AIR 1942 Mad 472; Palaniappa Chettiar v. Ramanatha chettiar, AIR 1934 Mad 320 - ILR 7 Mad 849; Alapati Ankamma v Pavuluri Basava Punnayya, AIR 1945 Mad 360 and Mohd,. Husain v. A.K.M. Pitchai, 1920 2 Mad LJ 663. Where the ingredients of Section 144, C.P.C. are satisfied, the court has no discretion to refuse restitution as the provisions of Section 144 are mandatory,. There may be cases where the provisions of S. 144 are not strictly satisfied but at the same time it is just, proper and equitable to order restitution as no party should be allowed to take advantage or benefit of a wrong or illegal order of the court of law. In such cases, the court must step in and exercise its inherent power invested under Section 151 and do real and substantial justice to the parties, the very intendment and purpose of Section 151 being only to meet the ends of justice and to prevent miscarriage of justice. The power vested under Section 151 being discretionary and to be used to do real and substantial justice to the parties, must be exercised fairly, reasonably and objectively but not arbitrarily. Even assuming that the provisions of Section 144, Civil procedure code are not attracted, it admits of no doubt that the court has inherent jurisdiction under 151 to order restitution and payment of reasonable rate of interest on the amount directed to be paid back to the party from whom it was erroneously or illegally collected. Admittedly the respondent was deprived of the utility and benefit of the sum of Rs. 24,000/- paid by it to the State. The state has had really the advantage and benefit of the use of such sum. Hence, in the circumstances, we are satisfied that this is a fit case where the restitution must be ordered. We are also of the view that payment of 6% of interest on the amount of the deposit i.e., Rs. 24,000/- is just, fair, proper and reasonable.

13. The decision of the Madras High court in Nimmagadda Mahalakshmamma v. Nimmagadda ramayya, AIR 1937 Mad 178, on which strong reliance has been placed by the appellant in support of its contention that no interest need be ordered to be paid, is a case where no interest was held to be payable on the amount of court-fee is a statutory requirement for filing causes in courts of law. Any erroneous payment of court-fee which is subsequently ordered to be refunded, does not justify the court to order payment of any interest on such amount of court fee refunded. Hence that case is certainly distinguishable from the facts of the present case.

14. For all the reasons stated, this appeal fails and is dismissed with costs.

15. Appeal dismissed.


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