RESTITUTION

 Section 144 of Civil Procedure Code

INTRODUCTION

The term restitution has not been defined anywhere in the Code of Civil Procedure[1] But has been statutorily recognized under section 144 of CPC[2]. In the literal sense, restitution refers to the restoration of things which were lost or stolen to its rightful owner. Justice Subba Rao mentioned restitution as to restoring to a party the benefit which the other party has received under a decree which was eventually held to be wrong[3]. The Black law dictionary[4] has given the meaning of restitution in three senses. Firstly, it’s the act of returning the things to the rightful owner. Secondly, to compensate a person for benefits derived from him by another where wrong has been done. Thirdly, to compensate or to repair the loss caused to another.

DOCTRINE OF RESTITUTION

Doctrine of restitution mentions the repairing of a decree where the Law inflicts a duty on the parties where the degree of wrong has been committed to make restitution to that party for what they have lost as far as they can be restored. Section 144 of CPC does not confer any kind of substantive right to the party. It regulates the power of the court in respect of discretionary relief. It binds a court to perform a duty to see that if a person is harmed by a mistake of the court he shall be restored to the position you would have occupied but for that mistake. The jurisdiction to make the restitution is inherent in every court and can be exercised wherever justice of the case demands. The object of this doctrine is based on the Maxim actus curiae neminem gravabit which means “the act of court shall harm no one”. In the case of S.M. Deshmukh v. Ganesh Krishnaji Khare [5] It was held that the doctrine of restitution is based on the principle that the first and highest of the duties of all the courts to take care that the act of the court should not do any kind of injury to the suitors. Unless it is shown that the restitution would be clearly contrary to the real justice.

CONDITIONS

Following are the conditions for applicability of restitution:

  • The restitution must be regarding the decree or order which had been reversed or varied
  • The party applying for the restitution must be entitled to benefit under the reversing of decree or order.
  • The relief claimed must be substantial on the reversal or variation of the decree or order[6].
  • There must be an inappropriate or incorrect judgment.
  • The benefit of the fault or incorrect judgment has already been received by one party[7].
  • The applicant must be party to the litigation which has been terminated according to the law.

Provisions of Section 144 are not applicable in the following conditions:

  • When there is a finality of the original decree and when that decree has not been varied[8]
  • It is not applicable in case of bona fide purchase of property for value
  • Where purchase money was not paid to co-owner of suit property.
  • Where a judgment-debtor could not have paid the decretal amount.
  • Where the sale was not in substance and truth a consequence of the error in the original decree[9].

In the matter of S.N.Banerji v. Kuchwar Lime & Stone Co. Ltd.[10] , it was held that the persons who are disposed and found to be the trespassers and the persons eventually where the possession was in their hands by the virtue of law in their favor as it’s not necessary for the ends of justice that the trespassers to be restored to position that they might succeed in a suit for reception. This was also reiterated in the case of Mahadeo Prosad Shaw v. Calcutta Dyeing & Cleaning co.[11]

WHO MAY APPLY?

Section 144 enables the successful party to be placed in status quo ante and empowers the court to order restitution when a decree or order is varied or reversed or in any appeal revision or other proceeding. It is applicable to cases where a decree is set aside or modified otherwise then on appeal. Section 144 has wider scope. It not only includes decree but also an order where the outcome will be difference in the judgment or reversal of the judgment in the court of first instance. A party has to file an application for restitution.

In short, section 144 applies to the following persons:

  • A person who is party to the order or decree which being varied or reversed set aside or modified can apply for restitution;
  • A person entitled to any benefit by way of restitution or otherwise in respect of the order of decreasing, varied or reversed or set aside or modified can apply for restitution.[12]

WHO MAY GRANT RESTITUTION?

Restitution is an application for the purpose of execution of a decree and it has to be filed before the court of first instance only. The court of first instance is the competent court to pass an order of restitution. The court which has passed the original degree or order may grant restitution on an application being made to it by the party who is entitled to benefit from such reversed or very decree or order

WHAT REMEDIES THE COURT CAN GRANT?

Section 144 empowers the court to make any orders as an outcome of a decree or order being varied, reversed, modified or set aside for the prepayment of cost and for the payment of interest, damages, compensation, and mesne profit.

For the cause of granting remedies as a part of restitution, the court has empowered phrased as ‘the court may make any orders’. The meaning of the sentence is that the court has power to pass any order in order to meet the ends of Justice. This part of the section says that following orders can be passed over an application of restitution. They are:

  • Orders for the repayment of costs.
  • Payment of interest.
  • Payment of damages.
  • Payment of compensation.
  • Payment of mesne profits.

The only bar to this remedy is that these remedies must arise as a result of the modification, variation, setting aside of the decree or order[13].

Illustration: If Mr. X obtains a decree against Mr. Y over the possession of an immovable property. Mr. Y dissatisfied from the decree appeals against the decree passed. The court set aside the original decree and decreed the possession of immovable property in favor of Mr. Y. Mr. Y thereby has a right to restitution of profits arising out of the immovable property for the duration till the property remained in the position of Mr. Y.

NATURE OF PROCEEDING

The nature of proceeding under section 144 of CPC is execution proceedings. The process to get an order or decree into effect is called execution proceedings. It controls the subject matter of equity and is nearly an enabling section to do justice to the parties in just manner. Even though restitution has been embodied under section 144, the power of the court to grant restitution is equal derivable from its inherent powers. Incase court dismiss the application of restitution at that time the principle of res judicata applies and a fresh application is not maintainable unless the dismissal was on the basis of technical grounds.

The proceedings of restitution are considered as execution proceedings. Section 144 (2) restitution can be claimed by making an application under section 144. The separate suit to claim the remedy shall be barred, therefore a party can only file an application for restitution and cannot institute a separate suit for the circumstances covered by section 144. Restitution is in fact and execution of the new decree and it has a connection with the original decree.

In the case of Citibank N.A. v. Hiten P. Dalal & Ors [14] the Supreme Court has observed the nature of restitution. Briefing the facts a money decree was passed in the favor of the plaintiff regarding whom the defendant had other to deliver the bonds to the plaintiff or written the money value of the bonds to the plaintiff. The defendant chose the first option that is to deliver the bonds to the defendant. On appeal against the money decree, the money decree was reversed. Therefore the plaintiff had to restore the benefit of the money degree to the defendant. The plaintiff had already sold those bonds in the open market.

The Special court was of opinion that the amount which should had been paid by the plaintiff to the defendant on the presumption that the bonds would have been retained till the date of maturity though the evidences clearly held that he sold it in open market where price can be determined on the basis of market prices. The Honorable Court rightly held that the special Court has erred in determining the amount payable on such premises. The plaintiff cannot be burden to pay what the third parties have gained by selling the further bonds. The court also held that the court should consider not only the losses suffered by party and entitled to the restitution but also the gain.

In this case the court has highlighted the nature of restitution by saying that it is an expansive power granted to the force which should be exercised give equity, fairness and justice to both the parties. The court must be in mind the hardships that may be faced by the party obliged to make restitution.

EXTENT OF RESTITUTION

Section 144 of CPC has inclusive nature and is not exhaustive. The court has empowered to grant restitution on its discretion even if the matter does not fall within the ambit of section 144.  

INHERENT POWER TO GRANT RESTITUTION

The Court has empowered to make orders in order to do justice or to prevent any kind of the abuse of courts power under section 151 of CPC[15] other than the power to grant restitution under section 144. The power of granting restitution is not only confined under section 144 the court has an inherent power to grant the remedy of restitution where section 144 does not apply. There are different circumstances in which the court can order to restore the status quo ante to meet the ends of Justice.

In the case of K. N. Krishnappa v. T. R. Gopalkrishna Setty[16] ,the Hon’ble court held that under the section of 151 of CPC, that the inherent powers which the court process can be invoked for restoring the parties the position in which they were prior to the process of execution.

BAR OF SUIT

Section 144 (2) of CPC bars a separate suit inducted for obtaining any remedy if restitution or other relief could be obtained by making an application under section 144 (1) of CPC.

CONCLUSION

The principle of restitution makes certain that the time and the resources of court are not wasted or squandered unnecessarily. It ensures that the case is not dragged for years. If such a case prevails then there will be no end for a suit. It keeps on going with people suffering where the court also has to ensure that no party should be suffered of any loss by its act or omission.  


[1] The Code of Civil Procedure (Amendment) Act, 1908, No. 05, Acts of Parliament, 1908 (India).

[2] Id.

[3] Mahaijibhai v. Manibhai, (1965) 2 SCR 436, (India).

[4] Black’s Law Dictionary, 7th Edn, 1315.

[5] S.M. Deshmukh v. Ganesh Krishnaji Khareit’s, 1974 BOMLR 405, (India).

[6] Ganesh Prasad v. Adi Hindu Social Service League, AIR 1975 AL 310, (India).

[7] Banchhanidhi v. Bhanu Sahoni, AIR 1974 Ori 148, (India).

[8] Union Carbide Corporation v. Union of India, 1991 4 SCC 584, (India).

[9] EDITORIAL BOARD, PROFESSIONAL’S CODE OF CIVIL PROCEDURE, Pg. 258 (2018).

[10] S.N. Banerji v. Kuchwar Lime & Stone Co. Ltd, AIR 1938 PC 295, (India).

[11] Mahadeo Prosad Shaw v. Calcutta Dyeing & Cleaning Co., AIR 1961 Cal 70, (India).

[12] Sachi Ashok Bhigwade, Restitution and Res Judicata under Civil Procedure Code, 1908, BLOG.IPLEADERS.IN, https://blog.ipleaders.in/restitution-and-res-judicata/.

[13] Nancy Joshi, Restitution under the Civil Procedure Code, LAWTIMESJOURNAL, (Sep.11, 2016,05;00PM), https://lawtimesjournal.in/restitution-under-the-civil-procedure-code/.

[14] Citibank N. A v. Hiten P Dalal & Ors, (2016) 1 SCC 411, (India).

[15] Supra Note. 1.

[16] K. N. Krishnappa v. T. N. Gopalkrishna, AIR 1997 Kant 152, (India).


Authored By: Simran, 8th Semester, SDM Law College, Mangalore

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