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TIPS & EXPERT ADVICE ON ESSAYS, PAPERS & COLLEGE APPLICATIONS

The owner or the person interested in the land when recovered the compensation under the award and decree which was reversed, varied or modified on appeal, the court is empowered under section 144, C.P.C., to restitute the amount to the State with interest or quantified damages or by way of compensation.

Restitution, as laid down in S. 144, C.P.C. means restoring to a party on the variation or reversal of a decree or order, of what has been lost to him in execution of the decree or order or directly in consequence of that decree or order. It is the sacred duty of the State to restitute the property wrongly taken away from a law-abiding citizen after the successful party has vindicated its right.

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The granting of restitution is not discretionary. The court is bound to place the parties in the position which they would have occupied but for the decree appealed from. In other words, restitution can be demanded not as a matter of favour but as a matter of right. The wording of S. 144 is imperative and the courts shall cause restitution to be made where the order has been reversed.

The principle embodied in the doctrine is that on the reversal of a decree in appeal the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost. The loss sustained must be properly consequential and includes cost and interest, damages, compensation and mesne profits.

The obligation arises automatically on the reversal or modification of the decree and necessarily carries with it the right to restitution of all that has been done under the erroneous decree and the court in making restitution is bound to restore the parties, so far as- they can be restored, to the same position they were in at the time when the court by its erroneous action had displaced them from.

Section 144 of the Code which deals with restitution reads:

144. Application for restitution:

(1) 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 Court which passed the decree or order shall, on the application of any party entitled to any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, 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, reversed, set aside or modified; and, for this purpose, the Court may make any order, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly consequential on such variation, reversal, setting aside or modification of the decree or order.

Explanation:

For the purpose of sub-section (1) the expression “Court which passed the decree or order” shall be deemed to include,

(a) Where the decree of order has been varied or reversed in exercise of appellate or revisional jurisdiction, the court of first instance;

(b) Where the decree or order has been set aside by a separate suit, the court of first instance which passed such decree or order;

(c) Where the court of first instance has ceased to exist or has ceased to have, jurisdiction to execute it, the court which, if the suit wherein the decree or order was passed were instituted at the time of making the application for restitution under this section, would have jurisdiction to try such suit.

(2) No suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by application under sub-section (1).

Section 144 enables the successful party to be placed in status quo ante and empowers the court to order restitution when a decree or an order is varied or reversed in any appeal, revision or other proceeding.

There was however a conflict of judicial opinion as to whether the provision of S. 144 applied to cases also where a decree was set aside or modified otherwise than on an appeal. The amendment made in S. 144 clarifies the position that it is applicable to such cases also where a decree is set aside or modified otherwise than on an appeal.

Under the Code of Civil Procedure (Amendment) Act 1956, the benefit of S. 144 has been enlarged so as to comprise within its orbit not only a decree but also an order, with the result that upon the ultimate reversal or variation of a judgment or order the section enjoins that the court of first instance shall on the application of the party concerned cause restitution to be made so as to place the parties in the position which they would have occupied but for the erroneous judgment or order.

Requisite conditions for the applicability of restitution:

The following conditions are, therefore, necessary for the application of restitution:

1. The restitution sought must be in respect of that decree or order which had been varied or reversed;

2. The applicant has lost, or been deprived of, something by reason of the decree or order which has been subsequently varied or reversed;

3. The party applying for restitution must be entitled to a benefit under a reversing decree or order;

4. The relief claimed must be properly consequential on such variation of the decree or order; and

5. The applicant must be a party to the litigation which has terminated according to law.

If the aforesaid conditions are satisfied, it gives no choice or discretion to the Court, and the only course it has to follow is to order restitution to the party which had suffered loss on account of the erroneous decree or order.

Section 144, Civil Procedure Code, imposes no limitations on the rights of the judgment-debtor to get back the benefit, to which he is entitled under the appellate Court’s decree, which has reversed or varied the trial court’s decree. On a perusal of S. 144, it is obvious that the question whether the balance of convenience is in his favour or not, is irrelevant for the purpose of granting restitution.

Section 144 obviously consists of two parts. The first part postulates the variation or reversal of a decree or an order in an appeal. The second part is more important. Restitution can be granted on the application of any party entitled to any benefit by way of restitution, and it has to be determined by the court granting restitution that the party who has given the application is entitled to the benefit of restitution.

Such an inference cannot be drawn in favour of a person who is a mere trespasser. Where the lower appellate court as well as the High Court held that the sale deed in favour of the appellant was null and void and no rights were conferred on him by virtue of the same, the appellant was a mere trespasser and he did not fulfil the second condition of section 144, C.P.C.

In S.N. Banerji v. Kuchwar Lime and Stone Co. Ltd., it was held that where the persons who have been dispossessed were found to be trespassers and persons in subsequent possession were lawfully in possession by virtue of a valid lease in their favour, it was not necessary for the ends of justice that the trespasser should be restored to possession though they might succeed in a suit for possession. That case was followed in Mahaden Prasad v. Calcutta Dyeing and Cleaning Co.

S.M. Deshmukh v. Ganesh Krishnaji Khare:

The doctrine of restitution is based on the principle that the first and highest of the duties of all the Courts is to take care that the act of the Court does no injury or wrong to the suitors. The duty or jurisdiction of the Court to grant restitution is inherent in the general jurisdiction of the courts to act fairly and rightly in the circumstances towards all parties involved.

Illustration:

A obtains a decree against B for possession of immovable property and in execution of the decree obtains possession of the property. The decree is subsequently reversed in appeal. B is entitled on an application under the section restitution of the property, though there may be no direction for restitution in the decree of the appellate court, together with mesne profits for the period during which A remained in possession.

Gangadhar v. Raghubar Dayal:

Broadly speaking, restitution is the right of a party to being placed in the same position which he occupied before the decree or order which has subsequently been varied or reversed was executed. Suppose a landlord files a suit for ejectment against his tenant. The suit is decreed ex parte and in execution of this ex parte decree the tenant is ejected and the landlord is put in possession.

Subsequently, the ex parte decree is set aside. The tenant can certainly without waiting for the final decision in the suit apply for being put back in possession, i.e., being placed in the same position which he occupied before he was ejected in execution of the ex parte decree which has subsequently been set aside. It is so because the very setting aside of the ex parte decree entitled the tenant to be put back in possession.

Application for restitution:

An application under S. 144 can be made before the court which passed the decree or order and cannot be made before the court to which the execution of the decree is transferred by the court.

The decision granting or refusing restitution is a decree within the meaning of S. 2 (2) and as such is appealable. A second appeal also lies.

Collector of Meerut v. Kalka Prasad:

A decree may be varied or reversed in various ways and these words used in S. 144 are equally applicable to a case where the decree has been set aside or varied not by a superior court on appeal or revision but by the same court or some other court of concurrent jurisdiction where grounds for variation or reversal exist. Restitution may be granted even where the decree is set aside on review.

Application for restitution is to be made to the court which passed the original decree or order, viz., the court of first instance.

Object:

Section 144 is so framed as to enable the successful party to be placed in status quo ante As stated above, it enjoins that as far as possible the position which the judgment-debtor and the decree-hol4er would have occupied under the amended decree should be made available to them.

If the possession of property by a party has been disturbed by an order or decree of the court which has been varied or reversed, it is unquestionable that the party is entitled to be put back to the same position as he had held previous to the disturbance of his possession.

And the duty and the jurisdiction of the court in directing restitution is to place the parties in the position which they would have occupied but for the act of the court. It is the duty of the court to see that the act of the court—meaning thereby not only primary or any intermediate court of appeal but the act of court as a whole from the lowest court which entertains jurisdiction over the subject-matter to the highest court which finally disposes of the suit—does no injury to any of the suitors.

The section should be liberally construed, the object being to shorten litigation and to afford a speedy and simple remedy. The principle of restitution is not restricted by the exact words of S. 144, C.P.C.

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 real justice of the case.

In proceedings for restitution the Court has to consider the equities arising in the case and the demand for justice that the rights of both the rival parties make, and to pass such an order as will do justice to both the parties.

The status quo ante is not to be achieved blindly. Such relief has to be given as is properly consequential on the reversal or variation of the decree or order. To find the appropriate relief the court has to see that the party applying for restitution is entitled to a benefit under the reversing decree and that such benefit has not been extinguished or mitigated by reason of supervening events which have either changed the subject-matter of the benefit or its character and incident.

The term ‘decree’ covers an order. The section in terms also does not state or require that the applicant must be a party to the proceeding which has resulted in the original decree being reversed or varied; nor does it require that the final decree should provide for a right in him to apply for restitution.

The language of S. 144, C.P.C. does not expressly rule out the case of a decree which has been varied or reversed by the same court. The section seems to be couched in very general terms and there is nothing in it to rule out the case of such a decree from the purview of that section by necessary implantation.

The court has jurisdiction to order restitution under S. 144 even if the decree is modified or reversed by a court of co-ordinate jurisdiction in a separate suit.

Mesne profits:

The court is competent to make orders as to mesne profits consequent upon an order for restitution and cannot refer the party to a separate suit.

Restitution, conceived in the light of doing justice between the parties, will necessarily have to depend on the facts and circumstances of each case and cannot be reduced to the form of an inflexible rule that courts should have regard only to the detriment suffered by one party and not to the position of the order.

The granting of restitution under S. 144, C.P.C. should be consistent with justice to both parties. Where a sum of money is deposited in court to answer a decree but a restriction is placed to the unconditional withdrawal of the same, in terms of the decree, by reason of which the decree-holder is either unable or unwilling to obtain the use of the money, in such a case it cannot be taken as an invariable rule that the decree-holder should pay interest on the amount lying in court on the reversal of the trial court’s decree in appeal.

Where possession over the plots was with the supardar appointed in proceedings under S. 146, Cr. PC. and the possession was to enure for the benefit of the person in whom the title to the plots vested and the respondents were not in possession over the said plots either on the date when the ex parte decree was passed or on the date when the appellants took possession over the plots in consequence of such decree, it was held that the respondents could claim to be put back in possession only when a declaration contrary to or in variance of that which had been granted by the ex parte decree in favour of the appellants was subsequently granted in favour of the respondent.

Parties:

A bona fide stranger purchaser is not affected by the reversal of the decree in the appeal.

Forum:

Proceedings for restitution are not to be deemed to be proceedings in execution, but are to be treated as miscellaneous cases arising out of the suit. Hence jurisdiction of the court to try the original suit will determine its jurisdiction to try the miscellaneous case.

Restitution is not execution. The court of first instance mentioned in S. 144 really means the court which is competent to set matters right by s granting restitution in the manner and to the extent that is proper under the circumstances. The court within whose jurisdiction the property; delivered and to be redelivered is situate has jurisdiction to grant restitution, though it is not the court which passed the decree.

The aforesaid view about restitution application being an execution proceeding or not has now been set at rest by the authoritative decision of the Supreme Court, and the proceedings for restitution under S. 144, C.P.C. are execution proceedings.

In view of the decision of the Supreme Court in Mahijibhai Mohanbhai Barot v. Patel Manibhai Gokabhai, it is now well settled that an application under S. 144, C.P.C. is an application in execution. A fortiori an objection against such an application shall be an objection under S. 47, C.P.C.

Prior to the Amendment Act, 1976, an application for restitution under S. 144 in all cases had to be made to the court of first instance. Even since the Amendment Act, 1976, the substituted expression ‘the court which passed the decree or order’ would, as per clause (a) of 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. An application for restitution has therefore to be made to the court of first instance, i.e., the trial court, and the Supreme Court cannot grant restitution.

Restitution under inherent powers:

Section 144 is not exhaustive of the principles of restitution. It is inherent in the general jurisdiction of the court to act rightly and fairly according to the circumstances towards all parties involved and for the purpose of preventing injustice under S. 151, C.P.C.

But if a party is not entitled to take his stand upon the statute itself, it is a matter of discretion with the court to grant or refuse the relief in exercise of its inherent jurisdiction under S. 151. An order for restitution under S. 151 unlike an order under S. 144, is not appealable.

It is really the duty of the court to grant restitution under its inherent powers when a person has been deprived of his property due to an order of the court which has subsequently been varied or reversed as being erroneous.

The provisions of S. 144, C.P.C. are not exhaustive and the Court has inherent power to restore any party which has suffered any injury by virtue of any order passed by the Court to the position which it would have occupied if the wrong order had not originally been passed by the court.

This was the view taken by the Privy Council in Prag Narain v. Kamakhia Singh, and was followed by the Lahore High Court in Sohnun v. Mast Ram. The same view was taken by the Madras High Court in S. Chokaling v. S. Krishna, the Calcutta High Court in Jatindra Nath v. Jugal Chandra, and the Jammu & Kashmir High Court in Subhash Chander v. Bodh Raj.

On the authority of these cases and on the principle contained in the maxim actus curiae neminem gravabit it is really the duty of the court to grant restitution under its inherent powers when a person has been deprived of his property due to an order of the court which has subsequently been varied or reversed as being erroneous. It has been held that even if the respondents could not invoke the powers of the court to grant restitution under S. 144, C.P.C., they could certainly do so under S. 151, C.P.C.

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 valebat claims.” (See ‘The Law of Restitution’—Goff & Jones, 4th Edn., page 3). Halsbur/s 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 those two strands are in the process of being woven into a single topic in the law, which may be termed ‘restitution’.”

The House of Lords had occasion to examine some of these principles in Woolwich Equitable Building Society v. Inland Revenue Commissioners.1 In regard to the law of restoration of loss or damage caused pursuant to judicial orders, the Privy Council in Alexander Rodger Charles Carnie v.

The Comptoir D’ Escompete De Paris, stated:

“One of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors, and when the expression ‘the act of the Court’ is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of appeal, but the act of the Court as a whole, from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case.”

In Jai Berham v. Kedar Nath Marwari, the Judicial Committee referring to the above passage with approval added:

“It is the duty of the Court under S. 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.”

In Binayak Swain v. Ramesh Chandra Panigrahi, the Supreme Court stated the principle thus:

“The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost.

This obligation arises automatically on the reversal or modification of the decree and necessarily carries with it the right to restitution of all that has been done under the erroneous decree, and the Court in making restitution is bound to restore the parties, so far as they can be restored, to the same position they were in at the time when the Court by its erroneous action had displaced them from”

Section 144, C.P.C. incorporates only a part of the general law of restitution. It is not exhaustive.

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.

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