Whether the trial court can grant restitution of property if the case did not fall within the ambit of S 144 of CPC?

 In the case of Mrs. Kavita Trehan and another v. Balsara

Hygiene Products Ltd., reported in AIR 1995 SC 441, in paragraph

nos. 13 and 15, the Supreme Court has made the following

observations:

“13. The Law of Restitution encompasses all claims

founded upon the principle of unjust enrichment.

'Restitutionary claims are to be found in equity as well as

at law'. Restitutionary law has many branches. The law of

quasi-contract is "that part of restitution which stems

from the common Indebitatus counts for money had and

received and for money paid, and from quantum meruit

and quantum vale bat claims." [See 'The Law of

Restitution" - Goff & Jones, 4th Edn. Page 3]. Halsburys

Law of England, 4th Edn. Page 434 states :

“Common Law. Any civilised system of law is

bound to provide remedies for cases of what has

been called unjust enrichment or unjust benefit,

that is, to prevent a man from retaining the

money of, or some benefit derived from, another

which it is against conscience that he should

keep. Such remedies in English law are

generically different from remedies in contract

or in tort, and are now recognised to fall within

a third category of the common law which has

been called quasi contract or restitution.”

For historical reasons, quasi contract has traditionally

been treated as part of, or together with, the law of

contract. Yet independently, equity has also developed

principles which are aimed at providing a remedy for

unjustifiable enrichment. It may be that today these two

strands are in the process of being woven into a single

topic in the law, which may be termed "restitution”.

Recently the House of Lords had occasion to examine some

of these principles in Woolwich Equitable Building Society

v. Inland Revenue Commissioners, [1993] A.C. 70.

14. ......

15. Section 144 CPC incorporates only a part of the

general law of restitution. It is not exhaustive. (See

Gangadhar v. Raghubar Dayal, AIR 1975 All 102 (FB)

and State Govt. of Andhra Pradesh v. M/s. Manickchand

Jeevraj & Co., Bombay , AIR 1973 Andhra Pra. 27).

The jurisdiction to make restitution is inherent in every

court and will be exercised whenever the justice of the

case demands. It will be exercised under inherent powers

where the case did not strictly fall within the ambit of

Section 144. Section 144 opens with the words, "Where

and in so far as a decree or an order is varied or reversed

in any appeal, revision or other proceeding or is set aside

or modified in any suit instituted for the purpose,...." The

instant case may not strictly fall within the terms of

Section 144; but the aggrieved party in such a case can

appeal to the larger and general powers of restitution

inherent in every court..............”

In view of the above observations, even if the cases not

falling within the ambit of Section 144 of CPC, restitution can be

made under inherent powers.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

BENCH AT AURANGABAD

901 WRIT PETITION NO. 269 OF 2018

CHANDRAKALABAI  BAPURAO SHIRSAT  Vs HABIB KHAN 

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Whether the trial court should restore possession of suit property to the party successful in the second appeal even though the appellate court has not directed restitution?

 Respondent no.1/original plaintiff raised objection to the effect that in favour of the petitioner no specific order has been passed by the Court to put her in possession and as such, the petitioner is not entitled to claim possession of the suit property. 

When a party, who lost his property in

execution of a decree, seeks to recover the same by

reason of the appellate decree in his favour, he is not

initiating any original proceeding, but he is only

concerned with the working out of the appellate decree

in his favour. The application flows from the appellate

decree and is filed to implement or enforce the same. He

is entitled to the relief of restitution, because the

appellate decree enables him to obtain that relief, either

expressly or by necessary implication. He is recovering

the fruits of the appellate decree. Prima facie, therefore,

having regard to the history of the section, there is no

reason why such an application shall not be treated as

one for the execution of the appellate decree.”

In view of the above observations made by the Supreme

Court, the application filed by the petitioner/original defendant

no.3 Chandrakalabai before the court below shall be required to be treated as one for the execution of appellate decree.

9. Learned counsel appearing for the respondents vehemently

submits that so far as the appellate decree is concerned, there are

no directions for restoration of possession and as such, the

provisions under Section 144 of CPC are inapplicable. I find no

substance in this submission. In the case of Union of India

represented by the Commissioner of Income-tax Madras v.

Ummer Sait and others, reported in AIR 1969 Madras 212, the

Madras High Court held that the right to get restitution is a right created by the statute, flowing as a consequence of the decree being reversed by the appellate court. Whether there is any direction expressly authorising the successful party in the appeal to claim restitution or not, by the very fact of success in the appeal, the successful party acquires a right in terms of Section 144 of C.P. Code.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

BENCH AT AURANGABAD

901 WRIT PETITION NO. 269 OF 2018

CHANDRAKALABAI  BAPURAO SHIRSAT  Vs HABIB KHAN 

CORAM : V. K. JADHAV, J.

DATED : 04th December, 2019

Citation: 2020 (6) MHLJ 356

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Whether tenant inducted by decree holder landlord is bound to deliver possession in restitution?

We are unable to share the view expressed by the High Court as in our considered opinion, the status of a bona fide purchaser in an auction sale in execution of a decree to which he was not a party stands on a distinct and different footing from that of a person who is inducted as a tenant by a decree holder-landlord. A stranger auction-purchaser does not derive his title from either the decree holder or the judgment-debtor and therefore restitution may not be granted against him but a tenant who obtains possession from the decree holder-landlord cannot avail of the same right as his possession as a tenant is derived from the landlord. 

4. In our view the above principle will apply in the case in hand as it is the decree holder who has put Respondent 2 in possession and, therefore, when the decree has been set aside he is bound to restore to the judgment-debtor what he gained under the decree and subsequently transferred to Respondent 2.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3307 of 1983

Decided On: 09.02.1994

 Gurjoginder Singh  Vs. Jaswant Kaur and Ors.

Hon'ble Judges/Coram:

S. Mohan and M.K. Mukherjee, JJ.

Citation : 1994 MhLJ1 510

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Whether it is necessary to pay ad valorem Court-fee on application for restitution?

In my considered view, law is quite clear that the application for restitution under Section 144, C.P.C. is an application for execution of decree within the purview of Section 2(2), C.P.C. read with Order 21 , C.P.C.

6. This Court also in a case between Sri Tapan Sarkar v. Smt. Sukhila Boro reported in 1990 (2) GLR 29 held that the application for restitution under Section 144, C.P.C. is an application for execution of the decree. In view of the above well principle of law, I am of the view that the First Appellate Court has jurisdiction to hear the appeal arising from the order passed under Section 144, C.P.C. I am also of the view that as the application for restitution under Section 144, C.P.C. is an application for execution of the decree, no ad valorem Court-fee is required on the value of the suit land or mesne profit except the required Court-fees for the purpose of execution of decree or order.

IN THE HIGH COURT OF GAUHATI (AGARTALA BENCH)

Second Appeal No. 30 of 1984

Decided On: 13.06.1996

Ramesh Ch. Deb Vs.  Barindra Kr. Chakraborty

Hon'ble Judges/Coram:

N. Surjamani Singh, J.

Citation : AIR 1997 Gau 24

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Whether appellate court can direct restitution of premises?

Another grievance was made that after setting aside the ex parte decree, the learned appellate Judge has granted restitution of the premises to the tenant. On this short ground, rule is granted and both the parties are heard finally on this question.

Under S. 144 C. P. C. when a decree or order of a trial Court has been set aside in appeal or revision, it is only the Court of first instance which is given power to order restitution. That is the law which has been laid down by the Supreme Court in the case of State Bank of Saurashtra v. Chitranjan Rangnath, reported in MANU/SC/0006/1980 : [1980]3SCR915 . The Section itself is very clear that the application for restitution should be filed to the Court of first instance. Here in his enthusiasm to do justice, the learned appellate Judge has himself granted an order of restitution which cannot be strictly sustainable within the four corners of S. 144 C. P. C.

IN THE HIGH COURT OF BOMBAY

Writ Petn. No. 3219 of 1995

Decided On: 20.07.1995

V.T. Hundlani  Vs.  Robert C. Kenny

Hon'ble Judges/Coram:

R.G. Vaidyanatha, J.

Citation: Citation : AIR 1996 Bom 48

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Whether court can allow cross examination of deponent of application for restitution of property?

 The adjudication of an application under Section 144 of CPC conclusively determines the rights of the parties with regard to the matter in controversy. The definition of decree under Section 2(2) of CPC also makes it clear that any adjudication by a Court under Section 144 of CPC is also a decree. The decree is passed only after appreciation of evidence by the court. Therefore, the requirement of evidence for the purpose of deciding an application under Order XIX Rule 2 of CPC has been satisfied by the respondents/defendants. The application filed by the respondents/defendants is under Section 144 of CPC seeking restitution of possession and an application under Section 144 of CPC cannot be treated on par with an application for injunction under Order XXXIX of CPC. The averments contained in the affidavit filed in support of I.A. No. 3508 of 2008 in O.S. No. 2077 of 1997 under Section 144 of CPC regarding illegal dispossession of the petitioners can be adjudicated only through evidence and a bare affidavit will not be sufficient to prove or disprove the rival contentions. The Judgment relied upon by the learned counsel for the petitioners (a) Dhanalakshmi vs. Karuppayee reported in MANU/TN/4427/2017 : 2017-5-L.W. 758; (b) V. Baby v. Sekar and Another reported in MANU/TN/2877/2014 : (2015) 1 MLJ 443; (c) Kannammal v. Bagyammal reported in MANU/TN/0047/1998 : 1998 (1) CTC 280; (d) P.N. Karuppa Gounder v. Karuppayal and Others reported in MANU/TN/2228/2012 : (2013) 1 MLJ 814 relate to injunction applications filed under Order XXXIX of the CPC and they are not applicable for the facts of the instant case, since the application filed by the respondents/defendants is one under Section 144 of CPC which cannot be equated on par with an affidavit filed in support of an injunction application under Order XXXIX of CPC.

17. This Court has perused and examined the impugned order and is of the considered view that the Trial Court has rightly allowed the application filed by the respondents/defendants under Order XIX Rule 2 of CPC to cross examine the deponent of the affidavit filed in support of an application under Section 144 read with Section 151 of CPC

IN THE HIGH COURT OF MADRAS

C.R.P.(PD). No. 1627 of 2014 and M.P. No. 1 of 2014

Decided On: 01.02.2019

N. Vamanan  Vs. Doss and Ors.

Hon'ble Judges/Coram:

Abdul Quddhose, J.

Citation: AIR 2019 Madras 94

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Whether appellate court is required to frame separate points for determination and record his findings on each points?

 Normally, the first Appellate Court is last Court of appreciation of facts. It should record the arguments advanced from both the sides and frame separate points for determination and record his findings separately on each point with reasons. The growing tendency to adopt a shortcut and frame only a point as to whether any interference is required in judgment and decree of trial Court is contrary to the provisions of Order 41, Rule 31, Civil Procedure Code.

IN THE HIGH COURT OF BOMBAY

S.A. No. 1053 of 2005

Decided On: 11.10.2018

Rukmini A. Jadhav Vs.  Shankar Bhau Patil and Ors.

Hon'ble Judges/Coram:

A.M. Dhavale, J.

Citation: 2019(2) MHLJ 228

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Whether S 144 of CPC is applicable if there is no variation or reversal of decree or order in appeal or revision?

Section 144 applies to a situation where a decree or an order is varied or reversed in appeal, revision or any other proceeding or is set aside or modified in any suit instituted for the purpose. In that situation, the Court which has passed the decree may cause restitution to be made, on an application of any party entitled, so as to place the parties in the position which they would have occupied but for the decree or order or such part thereof as has been varied, reversed, set aside or modified. The court is empowered to pass orders which are consequential in nature to the decree or order being varied or reversed.

12. In the present case, the interim order of the Trial court did not require the Defendant to hand over the possession to the Plaintiff. There was no decree or order of the Trial court by virtue of which the Appellant was given possession of the property, nor did any decree or order mandate that the Respondent hand over possession to the Appellant.

13. In these circumstances, the provisions of Section 144, Code of Civil Procedure were not attracted there being no variation or reversal of a decree or order as contemplated by Section 144.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 880 of 2019 (Arising out of SLP (C) No. 2378 of 2006)

Decided On: 21.01.2019

 Murti Bhawani Mata Mandir  Vs.  Ramesh and Ors.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and Hemant Gupta, JJ.

Citation: AIR 2019 SC 679

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Whether court should order restitution if there is no variation or reversal of decree of order?

Section 144 applies to a situation where a decree or an
order is varied or reversed in appeal, revision or any other
proceeding or is set aside or modified in any suit instituted
for the purpose. In that situation, the Court which has passed
the decree may cause restitution to be made, on an application
of any party entitled, so as to place the parties in the
position which they would have occupied but for the decree or
order or such part thereof as has been varied, reversed, set
aside or modified. The court is empowered to pass orders which
are consequential in nature to the decree or order being varied
or reversed.
In the present case, the interim order of the Trial court
did not require the defendant to hand over the possession to
the plaintiff. There was no decree or order of the Trial court
by virtue of which the appellant was given possession of the
property, nor did any decree or order mandate that the
respondent hand over possession to the appellant.
In these circumstances, the provisions of Section 144,

CPC were not attracted there being no variation or reversal of
a decree or order as contemplated by Section 144.
The remedy of the first respondent, if any, did not lie
in an application for restitution before the executing court
under Section 144, CPC. The executing court was justified in
declining to entertain the application under Section 144, CPC.
The order of the first appellate court which has been
affirmed by the High Court was unsustainable.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 880 OF 2019
(Arising out of SLP(C) No. 2378 of 2006)

MURTI BHAWANI MATA MANDIR Vs RAMESH & ORS. 

Dr. Dhananjaya Y. Chandrachud, J.
Dated:January 21, 2019

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Whether subsequent tenant getting possession from landlord is liable to be evicted in restitution proceeding?

In February 1971 Smt. Jaswant Kaur, Respondent 1 herein, initiated legal proceeding before the Rent Controller for eviction of her tenant, the Appellant herein, and in execution of the ex parte order passed therein obtained possession of the suit premises in October 1971. Immediately thereafter the Appellant filed an application under Order 9, Rule 13 of the Code of Civil Procedure which was dismissed by the Rent Controller. However, in appeal the ex parte order of eviction was set aside by the Rent Control Tribunal and the proceeding for eviction filed by Respondent 1 was revived. On such revival the Appellant filed an application under Section 144 of the Code of Civil Procedure before the Rent Controller for restoration of his possession which was allowed by an order dated May 13, 1977 and warrant for possession was issued. Before, however, possession could be taken pursuant thereto, Respondent 2 filed an objection before the Rent Controller contending that in terms of an agreement he had arrived at with Respondent 1 he took possession of the suit premises on May 1, 1973 as a tenant under her. He further contended that he was a bona fide transferee and that he did not know about the earlier eviction proceeding initiated against the erstwhile tenant. Consequently, he contended, he was not liable to be dispossessed pursuant to the warrant of possession.

We are unable to share the view expressed by the High Court as in our considered opinion, the status of a bona fide purchaser in an auction sale in execution of a decree to which he was not a party stands on a distinct and different footing from that of a person who is inducted as a tenant by a decree holder-landlord. A stranger auction-purchaser does not derive his title from either the decree holder or the judgment-debtor and therefore restitution may not be granted against him but a tenant who obtains possession from the decree holder-landlord cannot avail of the same right as his possession as a tenant is derived from the landlord. 

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3307 of 1983

Decided On: 09.02.1994

 Gurjoginder Singh  Vs.  Jaswant Kaur and Ors.

Hon'ble Judges/Coram:

S. Mohan and M.K. Mukherjee, JJ.

Citation: 1994 MHLJ 1510

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Basic concept of Restitution U/S 144 of CPC

The word restitution in this section means restoring to a party on the variation or reversal of a decree, what has been lost to him in execution of

decree or directly in consequence of that decree. This section does not apply unless property was lost in execution of decree or directly in consequence of that decree.

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Whether supreme court can order restitution?

We cannot accept either of the two submissions. The limitation for restitution under the Limitation Act is 12 years. The ex parte decree was set aside on 28th August, 1998 and thereafter, the Appellant has been litigating at various levels. If the Appellant had obtained stay order(s) during this period, obviously the period for which the stay was granted, would have to be excluded while calculating the period of limitation. This is not the job of this Court. It is for the executing court to decide whether the restitution petition, if any filed, is within the limitation or not. It is only the court which passed the original decree, which can order restitution. Restitution cannot be granted by the Supreme Court, as held in the case of State Bank of Saurashtra v. Chitranjan Rangnath MANU/SC/0006/1980 : (1980) 4 SCC 516.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2062 of 2009

Decided On: 08.09.2017

Vijay Singh Vs. Shanti Devi and Ors.

Hon'ble Judges/Coram:

Madan B. Lokur and Deepak Gupta, JJ.

Citation: (2017) 8 SCC 837,2018(2) MHLJ 7.
Read full judgment here: Click here

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Whether application for restitution is application for execution of decree?

We have gone though the judgments carefully and we have derived great assistance from them. If we are not dealing with each of the cases specifically, it is only because we have practically dealt with all the views. We realize that the opposite construction for which the appellant contended is also a possible one; but it ignores the history of the legislation and the anomalies that it introduces. On a procedural matter pertaining to execution when a section yields to two conflicting constructions, the Court shall adopt a construction which maintains rather than disturbs the equilibrium in the field of execution. The historical background of section 144 of the Code of Civil Procedure, the acceptance of the legal position that an application for restitution is one for execution of a decree by a number of High Courts, the inevitable adoption of the said legal position by innumerable successful appellants within the jurisdiction of the said High Courts, the possible deleterious impact of a contrary view on such appellants, while there will be no such effect on similar appellants within the jurisdiction of the High Courts which have taken a contrary view, also persuade us to accept the construction that the application for restitution is one for execution of a decree. We, therefore, hold on a fair construction of the previous of section 144 of the Code of Civil Procedure that an application for restitution is an application for execution of a decree.

IN THE SUPREME COURT OF INDIA

Civil Appeals Nos. 777 and 778 of 1964

Decided On: 11.12.1964

Mahjibhai Mohanbhai Barot Vs. Patel Manibhai Gokalbhai and Ors.

Hon'ble Judges/Coram:

A.K. Sarkar, J.R. Mudholkar, K. Subba Rao, N. Rajagopala Ayyangar and Raghubar Dayal, JJ.

Citation: AIR 1965 SC 1477

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Whether higher courts can order restitution after reversal of decree?

The limited question is whether this Court can grant restitution. Prior to Amendment Act, 1976, an application for restitution Under Section 144 in all cases had to be made to the Court of first instance. Ever since the amendment the substituted expression 'the Court which passed the decree or order' would as per Clause (a) of the explanation, mean the Court of first instance because the expression 'the Court which passed the decree or order' has been deemed to include where the decree or order has been varied or reversed in exercise of appellate or revisional jurisdiction, the Court of first instance. The present one is the simplest case where the suit in favour of the appellant and against the surety was decreed by the trial court, i.e. the Court of first instance, and this decree has been reversed by the High Court in exercise of its appellate jurisdiction. In such a situation Clause (a) of the explanation would be attracted and an application for restitution will have to be made to the Court of first instance, i.e. the Court of Civil Judge, Senior Division, Gondal. It is nowhere suggested that such a Court does not exist. Therefore, it would not be proper for this Court to direct restitution. 

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1058 of 1970

Decided On: 30.04.1980

State Bank of Saurashtra Vs.Chitranjan Rangnath Raja and Anr.

Hon'ble Judges/Coram:
A.C. Gupta, D.A. Desai and E.S. Venkataramiah, JJ.
Citation:(1980) 4 SCC 516.

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Leading Judgment on restitution

In the case of Lakshmi Amma (Supra), the Madras High Court noticed certain privy council judgments and also the contention that Section 144 of the CPC providing for restitution would apply only to cases where in execution of a decree passed by one court a benefit is received by the decree holder and thereafter that decree is reversed or set aside subsequently by a competent court then in such cases the court should place the parties in the position which they would have occupied but for such a decree which was varied or set aside. However, on the facts of that case the claim of the plaintiff appellant for restitution was turned down. In the other Madras High Court judgment in the case of S. Chokalingam (Supra) the right of a bona fide purchaser for value was upheld in paragraph 30 of the judgment and thereafter in paragraph 31 reliance was placed upon judgment of this Court in the case of Bhagwant Singh (Supra) by extracting the following passage:

“ The doctrine of restitution is that on the reversal of a judgment the law raises an 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 it is the duty of the Court to enforce that obligation unless it is shown that restitution would be clearly contrary to the interests of justice.” In the case of Surendra Lal (Supra), the Calcutta High Court explained that it is the duty of the Court under Section 144 CPC to place the parties in the earlier position after a decree executed in favour of one be varied or reversed. But it was clarified that “in assessing what a party may have lost or of what he may have been deprived during his dispossession the law takes into account not what he could have made but what his opponent did in fact make or could with reasonable diligence have made.” This conclusion was predicated on the reasoning that in vast majority of cases it would be hypothetical, remote and uncertain to find out what the party subjected to dispossession could have made if it was left in possession. The relevant part of judgment in the case of Bhagwant Singh (Supra) has been extracted in the Madras High Court judgment and already noticed earlier. This Court in the penultimate paragraph has reiterated the salutary and well established principle of restitution that on the reversal of a judgment the party who received the benefit of an erroneous judgment is obliged to make restitution to the other party for what he had lost. The Court is also duty bound to enforce such obligation unless it finds that restitution would be clearly contrary to the real justice of the case. Similar words have been used by this Court in the case of Kartar Singh (Supra) by holding that the party which had received the benefit of the erroneous decree is required to make the restitution to other party for what he had lost.

In the case of Kerala State Electricity Board (Supra) also the view taken by this Court was similar. But it was further clarified that the Court has a duty that in the matter of restitution justice be done as per facts of the case. In granting relief of restitution the Court “should not be oblivious of any unmerited hardship to be suffered by the party against whom action by way of restitution is taken.” This Court favoured a pragmatic view and grant of relief in a manner as may be reasonable, fair and practicable without causing unmerited hardships to either of the parties. In the case of South Eastern Coalfields Limited (Supra), this Court re-emphasized that restitution is for meeting the ends of justice and depends upon the peculiar facts and circumstances of the case. This Court further clarified in para 27 that as held by Privy Council in the case of Jai Berham vs. Kedar Nath Marwari, AIR 1922 PC 269, Section 144 CPC is rather a statutory recognition of an already existing rule of justice, equity and fair play and therefore even apart from Section 144 the Court has inherent jurisdiction to order restitution so as to do complete justice between the parties. This Court approved the view of the Privy Council that the Court has to act rightly and fairly according to the circumstances, towards all parties involved.

Learned senior counsel for the respondent Canfina, as was indicated earlier also placed reliance upon the aforesaid judgments in support of his plea that restitution requires that the parties be placed in the position which they could have occupied but for the wrong order or decree which is ultimately varied or reversed. He amplified his submissions by highlighting certain other paragraphs in the earlier noted judgments that suggest that the status quo as obtaining on the date of wrongful deprivation should be restored and only if same is not possible due to intervening circumstances like the sale of the property, price and mesne profits may have to be ordered. According to him the actual sale is of no consequence for calculating what the wronged party had actually lost. However, according to him also, for proper restitution the Court must rely upon verifiable value of the goods lost due to sale etc. and not indulge in speculation or hypothetical presumptions. He placed reliance also upon judgment of this Court in the case of Indian Council for Enviro-Legal Action vs. Union of India & Ors. (2011) 8 SCC 161. This judgment was in the context of constitutional provisions such as Article 21 and compensation for loss suffered by citizenry due to pollution. Advancing the principle that the polluter pays for the sufferings, the Court propounded the principle of disgorgement of gains of wrongdoers and that the Court could even think of imposing compound interest in place of simple interest provided by statute. Exercise of such inherent powers was contemplated only in interest of principles of justice and equity as warranted by the facts in cases of pollution causing sufferings to citizenry. All these principles were justified on the basis of power to order for restitution under inherent powers of the Court. But this Court did not over-rule any of the earlier judgments of this Court laying down classic principles of restitution under Section 144 of the CPC on which the appellant has placed reliance and which require a just and fair approach so that no unmerited hardship is caused to either of the parties.

In the ultimate analysis we find that the law on restitution under Section 144 of the CPC is quite well settled. It vests expansive power in the Court but such power has to be exercised to ensure equity, fairness and justice for both the parties. It also flows from more or less common stand of parties on the principle of law that for ascertaining the value of the property which is no longer available for restitution on account of sale etc., the Court should adopt a realistic and verifiable approach instead of resorting to hypothetical and presumptive value. It is also one of the established propositions that in the context of restitution the Court should keep under consideration not only the loss suffered by the party entitled to restitution but also the gain, if any, made by other party who is obliged to make restitution. No unmerited injustice should be caused to any of the parties.

Reportable

Supreme Court of India

Citibank N.A vs Hiten P. Dalal & Ors on 21 August, 2015

Bench: Vikramajit Sen, Shiva Kirti Singh

Citation:(2016)1 SCC411

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What Factors to be considered while ordering restitution?

“ The doctrine of restitution is that on the reversal of a judgment the law raises an 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 it is the duty of the Court to enforce that obligation unless it is shown that restitution would be clearly contrary to the interests of justice.” In the case of Surendra Lal (Supra), the Calcutta High Court explained that it is the duty of the Court under Section 144 CPC to place the parties in the earlier position after a decree executed in favour of one be varied or reversed. But it was clarified that “in assessing what a party may have lost or of what he may have been deprived during his dispossession the law takes into account not what he could have made but what his opponent did in fact make or could with reasonable diligence have made.” This conclusion was predicated on the reasoning that in vast majority of cases it would be hypothetical, remote and uncertain to find out what the party subjected to dispossession could have made if it was left in possession. The relevant part of judgment in the case of Bhagwant Singh (Supra) has been extracted in the Madras High Court judgment and already noticed earlier. This Court in the penultimate paragraph has reiterated the salutary and well established principle of restitution that on the reversal of a judgment the party who received the benefit of an erroneous judgment is obliged to make restitution to the other party for what he had lost. The Court is also duty bound to enforce such obligation unless it finds that restitution would be clearly contrary to the real justice of the case. Similar words have been used by this Court in the case of Kartar Singh (Supra) by holding that the party which had received the benefit of the erroneous decree is required to make the restitution to other party for what he had lost.

In the case of Kerala State Electricity Board (Supra) also the view taken by this Court was similar. But it was further clarified that the Court has a duty that in the matter of restitution justice be done as per facts of the case. In granting relief of restitution the Court “should not be oblivious of any unmerited hardship to be suffered by the party against whom action by way of restitution is taken.” This Court favoured a pragmatic view and grant of relief in a manner as may be reasonable, fair and practicable without causing unmerited hardships to either of the parties. In the case of South Eastern Coalfields Limited (Supra), this Court re-emphasized that restitution is for meeting the ends of justice and depends upon the peculiar facts and circumstances of the case. This Court further clarified in para 27 that as held by Privy Council in the case of Jai Berham vs. Kedar Nath Marwari, AIR 1922 PC 269, Section 144 CPC is rather a statutory recognition of an already existing rule of justice, equity and fair play and therefore even apart from Section 144 the Court has inherent jurisdiction to order restitution so as to do complete justice between the parties. This Court approved the view of the Privy Council that the Court has to act rightly and fairly according to the circumstances, towards all parties involved.

In the ultimate analysis we find that the law on restitution under Section 144 of the CPC is quite well settled. It vests expansive power in the Court but such power has to be exercised to ensure equity, fairness and justice for both the parties. It also flows from more or less common stand of parties on the principle of law that for ascertaining the value of the property which is no longer available for restitution on account of sale etc., the Court should adopt a realistic and verifiable approach instead of resorting to hypothetical and presumptive value. It is also one of the established propositions that in the context of restitution the Court should keep under consideration not only the loss suffered by the party entitled to restitution but also the gain, if any, made by other party who is obliged to make restitution. No unmerited injustice should be caused to any of the parties.

Supreme Court of India

Citibank N.A vs Hiten P. Dalal & Ors on 21 August, 2015

Bench: Vikramajit Sen, Shiva Kirti Singh

REPORTABLE

  CIVIL APPEAL NO. 3580 OF 2005

Citation;(2016) 1 SCC 411

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