Kandasami Mudali vs Annamalai Reddi and Others

Cornish, J.—In execution of a mortgage decree against the appellant his property was brought to sale on 10th August, 1927. The

preliminary decree in the suit had been made ex parte but before the passing of the final decree the appellant had applied to have the ex parte

preliminary decree set aside. '' He did not succeed in this application until the matter had been carried to the appellate Court when the ex parte

decree was set aside and the suit was remanded for fresh trial. This was on 16th January, 1928. The result of this new trial was that the mortgage

amount decreed was Rs. 278-9-3 less than the amount of the ex parte decree. This new decree was made on 31st October, 1928. An application

for restitution was made by the appellant of the excess amount received by the respondent from the sale under the ex parte decree. This

application was made on 30th October, 1931. The question is, is this application in time? The District Judge has held that restitution could have

been and ought to have been claimed when the ex parte decree was set aside on 16th January, 1928, and consequently that the application is time

barred. This decision would be right if Article 181 of the Limitation Act governed the application. It has been held by the Lahore High Court in

Gujar Mal v. Narayan Singh AIR 1931 Lah. 504 that Article 181 is the relevant provision to applications for restitution. But a Bench of this High

Court in Unnamalai Ammal Vs. Mathan alias Arunachalam and Another, has held that an application for restitution is in reality an application for

execution of a decree, on the ground, as I understand it, that it is to enforce a legal obligation arising from a decree itself, that is to say, an

obligation upon the decree-holder to refund more than he is entitled to receive under the decree. The Madras ruling is that Article 182 of the

Limitation Act is the appropriate provision. Clause 7 of this Article gives a period of three years, where the application is to enforce the payment

which the decree directs to be made on a certain date, from that date. Therefore it has been argued for the appellant that the decree having been

made on 31st October, 1928 and the decree having given 3 months'' time for payment, the application for restitution made on 30th October,

1931, is in time. In my opinion this contention is correct. When an ex parte decree is set aside and a fresh trial ordered, I do not think that this

process can be rightly described as a variation or reversal of the decree which has been set aside. The parties are remitted to the position in which

they stood before the ex parte decree was made. There is a retrial and the decree made upon this retrial is a new decree. Being a new decree it is

not a decree varying or reversing the decree which has been set aside. The effect of the new decree was to fix the liability of the defendant and if

the result is that the plaintiff is entitled to less than he has actually received upon the execution of the decree which has been set aside, he is in

equity, at all events, bound to restore the excess. Section 144, Civil Procedure Code, may not be strictly applicable to the cage, but upon the

equitable principle which underlies Section 144, and also in pursuance of the inherent power of the Court to prevent an abuse of its process, I think

that an order for restitution of the balance can be made in favour of the appellant. As I have already said, this application was made within the

time-limit fixed by Article 182 and it was in time.

The result is that the appeal is allowed with costs and the order of the District Munsiff will be restored.

(Leave to appeal is refused.)