(1). The appellants in these two civil miscellaneous appeals are the Kanthimathi Mills Ltd., through its managing director, and the only respondent in C. M. A. No. 41 of 1957 and the first respondent in C. M. A. No. 42 of 1957 is the Special Land Acquisition Officer for Co-operative Housing Schemes, Madras. There are other respondents in C. M. A. No. 42 of 1957, who gave security on behalf of the appellant for withdrawing a portion of the decree amount in O. P. No. 1 of 1949.
(2) C. M. A. No. 41 of 1957 arises out of E. A. No. 124 of 1956 and C. M. A. No. 42 of 1957 arises out of E. A. No. 75 of 1956, both filed in O. P. No. 1 of 1949 on the file of the Court of the Subordinate Judge, Tirunelveli, O. P. No. 1 of 1949 was instituted by the Kanthimathi Mills Ltd., under S. 18 of the Land Acquisition Act, claiming enhanced compensation for its land acquired by the Special Land Acquisition Officer for Co-operative Housing Schemes. By the order in that O. P., the Subordinate Judge awarded enhanced compensation of Rs. 35,643-9-0 on 3-9-1949 with interest at six per cent per annum on that amount from 30-6-1948. Against that decree, the Special Land Acquisition Officer filed A. S. No. 195 of 1950 in this court.
(3) During the pendency of that appeal, the Land Acquisition Officer applied in C. M. P. No. 3122 of 1950 for stay of execution of the decree of the Subordinate Judge. That petition was ordered by Somasundaram J. on 17-8-1950, directing the Government to deposit the amount decreed by the Subordinate Judge and giving liberty to the claimant-decree-holder to withdraw that amount on furnishing security. The total amount due under the decree of the Subordinate Judge amounted to Rupees 40,366-5-0 on 20th September, 1950, the date on which the Government deposited this amount in the court of the Subordinate Judge.
On 7-7-1951, on the security furnished by respondents 2 to 4 in C. M. A. No. 42 of 1957, the decree-holder was permitted to withdraw Rupees 26,500 from the amount in court deposit. Subsequently, that is, on 21-10-1954, the sureties applied to the court to release one item of property given by them as security, and, for this purpose, they re-deposited Rs. 15000 into court. The court allowed this item of property to be released and accepted the re-deposit. This court in A. S. No. 195 of 1940 reduced the amount of compensation to Rs. 15576-0-10.
Thereafter, the Special Land Acquisition Officer filed E. A. No. 75 of 1956, claiming interest on Rs. 20067-8-2 by way of restitution from 20-9-1950 till date of payment, and sought an order, directing respondents 2 to 4 to that application, namely, the sureties, to deposit into court the sum of Rupees 6421-9-7 for payment to the petitioner or to assign to the petitioner the security bond dated 17-6-1951 given to court by respondents 2 to 4 to enable the petitioner to realise the amount due by the sureties from the secured property. Shortly after E. A. No. 75 of 1956 was filed by the Land Acquisition Officer, the claimant mills filed E. A. No. 124 of 1956 for an order directing the Government to make payment to them of Rs. 909-13-0 with further interest thereon from 5-12-1955 till payment.
This amount was claimed under the following circumstances: Rs. 11500 had been already drawn by the claimant through his sureties, that is, Rupees 26500 originally drawn through the sureties minus Rs. 15000 re-deposited by them. In E. A. No. 264 of 1955, the petitioner withdrew from the amount in court deposit a sum of Rs. 4284-14-5 on 5-12-1955. It was alleged that this sum of Rs. 4284-14-5 was claimed as the only sum due to the claimant under the mistaken belief that interest ceased to run on the amount deposited by the Government from the date of deposit. It was also alleged that the claimant was then advised that they were entitled to claim interest on the amount payable to them under the decree of the High Court only upto the date when they withdrew Rs. 4284-14-5 that is, 5-12-1955.
(4) The learned Subordinate Judge dismissed E. A. No. 124 of 1956 filed by the claimants on the ground that it was open to them to have withdrawn the entire amount in court deposit on furnishing security and that, if they were unable to do so, that would be no ground for allowing interest on the amount due to them. In E.A. No. 75 of 1956, the learned Subordinate Judge directed respondents 1 to 4, that is, the claimants and their sureties, to pay the Government interest at the rate of 6 per cent per annum on Rs. 20067-8-2 from 20-9-1950, the date of deposit of the decree amount in Sub Court, till date of payment. On failure to deposit this sum, the learned Subordinate Judge directed the security bond D/- 17-6-1951 executed by the sureties to be assigned in favour of the Government.
(5) The question for consideration in C. M. A. No. 42 of 1957 is whether the Government is entitled to interest on the excess amount deposited by way of restitution; and the question for consideration in C. M. A. No. 41 of 1957 is whether, by reason of the deposit made by the Government in pursuance of the order of the High Court, the claimant became disentitled to interest on the amount due to him and lying in court deposit.
(6) In C.M.A. No. 42 of 1957, the question for consideration is based upon the principle of restitution contained in S. 144 C.P.C. There is no dispute that this principle applied to the case, since by reason of the erroneous decree of the Subordinate Judge, the Government was made to deposit a larger sum than the sum ultimately found due to the claimant by the decree of the High Court. The contention of the learned counsel for the claimants in regard to this matter falls under two heads. The first is that the Government would not be entitled to claim interest on any amount not drawn by the claimants from Court deposit.
That is to say though the total amount of Rs. 40366-5-0 was deposited by the Government on 20-9-1950, no portion of this amount was drawn till 7-7-1951. Therefore, it is argued that the Government will not be entitled to claim interest on any amount from 20-9-1950 to 7-7-1951. Secondly, it is contended that, from 7-7-1951 to 21-10-1954, the Government would be entitled to claim interest only on the sum of Rupees 10715-1-7, because, that was the actual excess amount withdrawn by the claimant from court.
There is a slight misconception in this argument, because the Government did not claim any interest on Rs. 15784-14-5, the amount due to the claimant according to the decree of the High Court. The claim of the Government was confined to the excess over this Rs. 15784-14-5. Thus, the argument reduces itself to this. The claimant will not be liable to pay interest over the excess, because, even though the amount was deposited by the Government in accordance with the order of this court in the stay application, the claimant had not withdrawn the amount, or had not the benefit of that money.
In support of this contention, the decisions in Sitaramayya v. Venkanna : (1941)2MLJ768 , Periakaruppan Chettiar v. Veerappa Chettiar : AIR1944Mad46 , and Mooka Naicker v. Venkataswami Naidu : AIR1950Mad807 were relied on. The common principle which was said to have been laid down by all these decisions was that, where a judgment debtor makes a payment which is in the nature of a voluntary payment of the decree amount he would not be entitled to claim interest by way of restitution on the excess amount deposited by him. In elaborating this argument, it was said that, at the time when the Government applied for stay of execution in the High Court, the claimant had not taken any steps to levy execution for the amount due to him under the decree of the Subordinate Judge.
In Sitaramayya's case, the facts were these: A decree was obtained for a sum of Rs. 2948-15-8 in the court of the District Munsif of Peddapur. The judgment-debtor appealed to the court of the Subordinate Judge, Coconada, and, as a result of that appeal, the suit was dismissed with costs. While the appeal was pending in the court of the Subordinate Judge, the decree-holder applied for execution of the decree which he had obtained, but, as a result of an arrangement, this execution application was dismissed. Thereafter, the judgment-debtor applied for stay of execution, and stay was ordered on condition that the judgment debtor should furnish security for the amount of the decree.
Instead of furnishing security in the form of immoveable property, the judgment debtor deposited the decree amount in cash. On paying the decree amount the judgment-debtor obtained an order from the court to the effect that the decree-holder could withdraw it only on furnishing security. When the appeal was allowed, the judgment-debtor withdrew his money from court and made an application for an order against the decree-holder for payment of interest. The first court refused this application. But, on appeal, the Subordinate Judge granted interest at the rate of 12 per cent per annum. On second appeal, this decision of the Subordinate Judge was confirmed by Wadsworth J.
A Letters Patent Appeal was taken against this decision, and the Bench held that S. 144 did not appeal to the facts of the case. They mainly relied on the circumstance that the order of the appellate court granting stay did not provide for payment into court. The Bench pointed out further that, if the judgment-debtor had complied with the order of the first appellate Court and furnished security in the form of immoveable property, there could be no question of payment of interest. They recognised that the judgment-debtor had suffered loss by the deposit; but they refused to make this the ground for ordering restitution by way of interest, because, he was not bound by the order of the appellate court granting stay of execution to deposit the money in cash. This decision is therefore no authority governing the facts of the instant case.
(7) In 1943 2 Mad LJ 441: AIR 1944 Mad 46, a Bench of this court ruled that interest on the decree amount did not cease to run from the date of payment into court in pursuance of the order of an appellate court granting stay of execution. That was a case where the money was paid into court by the judgment-debtor on his obtaining an order of stay which directed that the money could be taken out by the decree-holder on giving security. No security was given and the money was not drawn. It was held that the decree-holder was not bound to give security, and, if he claimed interest on the decree amount according to the terms of the decree, that claim could not be negatived by pleading as a defence the deposit made in pursuance of the order granting stay. The basis of the decision is that the deposit made was not a deposit in terms of O. 24, R. 1 to 3.
The reference to O. 24 in this decision may not be quite appropriate, because, that order relates to payment into court of money during the pendency of a suit and before a decree is passed. Deposit of money after decree should be governed by O. 21, R. 1. Clauses (a) and (b) of R. 1 of O. 21 do not govern a case of this kind, as they relate to payment to the decree-holder, whether through court or outside court in accordance with the decree passed by the court, whose decree is being executed. The order made in the stay application cannot be equated to the decree of the High Court in the appeal. Even otherwise, Periakaruppan Chettiar's case was not a case of restitution, which is the only question with which I am concerned in C. M. A. No. 42 of 1957. How far this decision will affect the disposal of C. M. A. No. 41 of 1957 I would indicate later in this judgment.
(8) In : AIR1950Mad807 , Raghava Rao J. purported to follow 1943 2 Mad LJ 441 : AIR 1944 Mad 46. That was also not a case dealing with the question of restitution. It is unnecessary for the purpose of deciding C. M. A. No. 42 of 1957 to consider the question whether the payment made by the Government in this case was a voluntary payment. So long as the decree of the Subordinate Judge stood, the Government was bound to obey it, and the mere fact that no execution had been levied by the claimant for the amount decreed by the Subordinate Judge is no distinguishing circumstance to hold that interest could not be claimed by way of restitution by the judgment-debtor as a consequence of the reversal of the decree of the Subordinate Judge by the decree of this court.
The principle universally applicable to such cases is that the decree of the appellate court is the decree which the trial court ought to have passed, and any act done by the judgment-debtor in obedience to the decree of the trial court, if it results in loss to the judgment-debtor, should be compensated by restitution. It will be putting a premium upon dilatoriness and obstruction to hold that, merely because the judgment-debtor had obeyed the decree of the trial court by deposing the amount without waiting for execution being levied, he should be in a worse position that he would be if he had paid the amount after execution was levied.
The true principle upon which relief by way of restitution may be claimed has been laid down by a Bench of this court as early as 1932 in Shanmugasundara Mudaliar v. Ratnavelu Mudaliar, 63 Mad LJ 383 : AIR 1933 Mad 33. That Bench pointed out that the basis of the rule of restitution is not making the unsuccessful party disgorge any profit he had made out of the decree reversed, but giving compensation to the successful party in the appeal for the loss which he had suffered by obeying the decree of the trial court. If this principle is kept in mind, it should make no difference whether the excess amount deposited by the Government was a voluntary deposit or an involuntary deposit as a result of execution levied by the decree-holder.
It was certainly open to the Government to obey the decree straightway without execution being levied and to take steps to safeguard its interests in case the appeal succeeded. That was the effect of the order of the High Court in directing security to be furnished by the decree-holder before drawing out the entire amount. But then there is one distinction which may become relevant in C.M.A. No. 41 of 1957. The order of the High Court directing security to be furnished for the entire amount may not be relied on by the Government as a protection to deny interest to the decree-holder in so far as it related to the sum of Rs. 15000 and odd which was ultimately found by the High Court to be the amount due to the decree-holder claimant. But the claim for interest made by the Government in C.M.A. No. 42 of 1957 does not relate to this amount, and, therefore, the Government is entitled to claim interest on the excess amount which was granted by the decree of the Subordinate Judge. C.M.A. No. 42 of 1957 is therefore dismissed with costs.
(9) In C.M.A. No. 41 of 1957, two grounds were urged by the learned Government Pleader for contending that the claimant will not be entitled to interest after the date of deposit. The first is that Order 21 rule 1(c) would apply to the facts of this case and the deposit was made in accordance with the direction of the High Court. That rule, so far as it is relevant, reads thus:
'All money payable under a decree shall be paid as follows, namely,
(a) into the court whose duty it is to execute the decree; or
(b) out of the court to the decree-holder; or
(c) otherwise as the court which made the decree directs.'
Clauses (a) and (b) obviously relate to payment of the decree amount to the decree-holder either through court or outside Court. Clause (c), in my opinion, refers to a case where the decree directs payment otherwise than in the manner contemplated under clauses (a) and (b). To construe the order of the High Court in the stay application in the instant case as a direction of the court which made the decree appears to be almost impossible. Apart from the fact that that order was not made by the court which made the decree, it is not an order directing payment of the decree amount as a result of the final order made in the appeal. To such interim orders, obviously clause (c) could not apply.
(10) The next argument of the learned Government Pleader was that the deposit ipso facto stopped running of interest on the admitted amount due to the claimant, because, it was the fault of the claimants that they were unable to draw out the amount after complying with the condition imposed by the High Court in its order granting stay. This argument runs counter to the decision in Periakaruppan Chetti v. Veerappa Chetti : AIR1944Mad46 , which is a Bench decision, and, therefore, binding upon me. The reasoning behind the argument, as I construe it, is this. A duty was no doubt cast upon the government to obey the decree of the Subordinate Judge by paying the entire amount decree by him.
But this direction in the decree of the Subordinate Judge was modified by the order of the High Court in the stay application. So long as the judgment debtor obeyed the order of the High Court by satisfying the condition as to deposit, no further liability should attach to the Government by way of paying interest decreed by the Subordinate Judge. It is true that this argument would hold good in the cases of the excess amount negatived by the decree of the High Court. But, in respect of the amount decreed by the High Court, namely, Rs. 15,784-14-5, the denial of interest was or could be, only the result of the obtaining of an order by the Government in the stay application as to security for this amount also. This is not a case where the decreeholder would be bound to give security in any event, just like a case covered by a decree in favour of a minor or a lunatic provided for under Order 32 C.P.C.
But for the order of the High Court directing security to be given for the entire amount deposited by the Government, the decree-holder would have been in a position to withdraw the sum of Rs. 15,784-14-5 unconditionally from Court. To this extent, the Government is directly responsible for the decreeholder not drawing this amount. It is no answer to say that the decreeholder could have furnished security and drawn this amount or could have moved the court to invest the money in interest earning securities. That was not warranted by the decree of the trial Court. The variation in this regard made by the order of the High Court in the stay application was the outcome of the action of the Government in inviting the appellate court to pass such an order in respect of the entire amount. Certainly, by such order, the decree-holder should not be put to loss, namely, loss of interest on the amount due to him as ultimately found by the appellate court.
It will be subversive of all settled principles to hold that, by obtaining an order in the stay application, the Government could cause loss to the decreeholder by preventing him from drawing any portion of the amount due to him in respect of which the appeal failed. It is undeniable that the appeal failed in respect of the excess over the sum granted by the Land Acquisition Officer which the High Court granted by its decree. I am therefore unable to find any reason to ignore the condition, namely, furnishing security for the entire sum granted as enhancement by the sub court which the decreeholder was entitled to refuse to comply with so far as the sum of Rs. 15000 odd ultimately decreed to him was concerned. The learned government Pleader was not able to cite any authority for the contention that the decree-holder will cease to earn interest on the amount of money due to him merely because a deposit of that sum was made under the condition that security should be given for drawing that amount which ultimately he becomes entitled to both under the original decree passed by the trial court and also under the decree of the appellate court which modified the trial court's decree.
(11) C. M. A. No. 41 of 1957 is therefore allowed, and the order of the Subordinate Judge dismissing E. A. No. 124 of 1956 is set aside. The appellant in this C. M. A.--the claimant--is entitled to interest on Rs. 15784-14-5 at six per cent per annum from 20-9-1950 to 7-7-1951, and also to interest on Rs. 4284-15-0 from 21-10-1954 to 5-12-1955. According to the memorandum filed by the appellant in both these appeals, the total amount of interest due to the appellant for these two periods would come to Rs. 988.74. The Government would be entitled to interest on the excess amount deposited by it--Rs. 20,667.82 from 20-9-1950 till the date of payment.
The claimants and their sureties will be entitled to set off the interest due under my order in C. M. A. No. 41 of 1957, against the interest payable under the order of the Subordinate Judge in E. A. No. 75 of 1956, and also to set off Rs. 1386-50 which has been earned as interest on the amount in deposit being invested in National Savings Certificate.
(12) The Government will pay costs to the appellant in C. M. A. No. 41 of 1957.
(13) Order accordingly.