Lokambal Achi vs P. Srinivasa Pillai and Others

Balakrishna Ayyar, J.—Lokambal Achi, the decree-holder in O. S. No. 65 of 1943, on the file of the Subordinate Judge, Cuddalore, is the

appellant before me. On 9-10-1950 she obtained a decree in that court for Rs. 12278-1-0. Defendants 2 to 5 in the suit appealed to this court in

A. S. No. 117 of 1951. While the appeal was pending, Lokambal Acbi levied execution. The judgment-debtors then moved this court for stay of

execution and by an order of the court made on 29-3-1951, it directed the judgment-debtors to deposit in court a sum of Rs. 5000 in cash.

The judgment-debtors were further directed to furnish security for the balance of the decree amount and costs. The judgment-debtors deposited

Rs. 5000 on 11-4-1951, but instead of furnishing security in respect of the balance of Rs. 7496-5-0 they elected to deposit that money into court.

This they did on 25-6-1951. On 11-7-1951 the decree-holder applied for a cheque for Rs. 1056-5-0 stating that it represented the costs of the

suit. A cheque was ordered to issue for this amount and this was done apparently on 7-8-1951.

On 13-9-1955, this court disposed of App. No. 117 of 1951 by remanding the suit to the lower court for disposal afresh in accordance with the

provisions of Act IV of 1938. A revised decree was made by the Subordinate Judge for a sum of Rs. 2245-13-0 plus costs amounting to Rs.

353-4-0 and subsequent interest on the sum of Rs. 1700. On 16-8-1956, the decree-holders were permitted to draw the balance of the decree

amount in accordance with the modified decree, except for a sum of Rs. 500.

In 1956 the judgment-debtors filed E. A. No. 537 of 1956 for a direction to the decree-holders to pay them (1) interest on Rs. 5000 at 5 1/2 per

cent per annum from 11-4-1951 to 7-8-1951; (2) interest on Rs. 3943-11-0 as from 7-8-1951 upto the date of petition; and (3) interest on Rs.

7496-5-0 from 25-6-1951 upto the date of petition at 5 1/2 per cent. The total interest thus claimed was a sum of Rs. 3233-4-0. The contention

of the judgment-debtors that is to say the petitioners in E. A. No. 537 of 1956 was that they were entitled to these amounts by way of restitution

u/s 144 C. P. Code.

The learned Subordinate Judge dismissed the application observing ""In the matter of restitution, the court has to take into consideration both the

parties and not only the party who applies for restitution. In this case the decree-holder has not drawn that portion of the deposit amount for which

he had to furnish security. It is the decree-holder''s case that he could not furnish security being in impecunious circumstances."" On appeal, the

learned District Judge held :

As per the revised decree, the decree-holder was entitled to Rs. 1624-1-0. He has drawn only Rs. 1056-5-0 the costs awarded to him as per

the decree on 15-10-1951. As he was entitled to Rs. 1624-1-0 out of the sum of Rs. 5000 deposited by the petitioners, the latter can claim only

interest by way of compensation on the difference, i. e., Rs. 5000 minus Rs. 1624-1-0 : 3375-15-0. I am of opinion that interest at 3 per cent per

annum will be reasonable compensation for the loss sustained by the petitioner in this case. They are therefore entitled to restitution to the extent of

Rs. 497-38 nP.

The decree-holder has now come to this court in appeal.

Two amounts are involved in the present controversy. One as Rs. 7496-5-0 which the judgment debtors deposited on 25-6-1951. They cannot

possibly claim interest on this amount because in respect of this amount they were called upon only to furnish security. They were not really called

upon to put that money into court. Instead of furnishing security as they were ordered to do, they elected to put the money into court. Both the

courts have properly found that the judgment-debtors are not entitled to interest on this amount.

The other sum is the difference between the amount of Rs. 5000 which the judgment-debtors put into court on 11-4-1951, and the amount for

which Lokambal Achi finally got a decree. The question is whether the judgment-debtors are entitled to any and, if so, what interest on this

amount.

All the decisions of this court that have a bearing on this matter have been placed before me by learned counsel. Various other decisions

commencing from Rodger v. Comptoir D'' Escompete de Paris, (1871) 24 LT 111 were also read and dis-cussed. It is unnecessary to examine

these cases seriatim. It will be sufficient to observe that two principles have been held to be applicable to situations similar to the present. One is

the principle of restitution incorporated in clear terms in Section 144 C. P. Code. The lower court passes a decree.

In pursuance of that decree, the judgment-debtor puts the money into court or pays it over to the decree-holder. That decree is reversed or altered

in appeal. Then the principle of restitution requires that the judgment-debtor should be placed in the position which he would have occupied if the

original decree had not been passed. If that decree had not been passed, he would have had the use of the money which he deposited into court or

paid over to the decree-holder; and that use he has lost.

That loss must be made good to him,; and that can be done only by requiring the decree-holder to pay interest on the money. This principle has

been applied without qualification where either the money has been actually paid over to the decree-holder or has been deposited in court and no

conditions have been imposed or difficulties placed in the way of the decree-holder drawing out that amount. If the money has been really made

available to the decree-holder he would be bound to pay interest if the decree is reversed.

The other principle is this. Even though the money has been deposited into court, but the deposit has been made subject to a condition like

furnishing security which the decree-holder may be unable or unwilling to comply with or other difficulties are placed in the way of the decree-

holder with the result that the money was really not available to him at all then he would not be required to pay interest; and the reason of the rule is

that to do so would be to require him to pay for an advantage which he never really enjoyed through no fault of his own.

Taken separately both the principles are eminently just and equitable hut in their actual operation they may sometimes clash, as for instance, in

situation similar to the present. In such cases courts, must effect such equitable adjustment as the circumstances will permit.

At page 429 in Gauridutt Ganesh Lal Vs. Madho Prasad and Others, the court observed,

I think it quite consistent with this to hold that there is no hard and fast rule that interest must be allowed from the date of deposit or yet that it must

be withheld until the date of withdrawal or any other date ..... The court will do whit seems just having regard to all the circumstances of the

case.....

I may also refer to the observations of Mahajan J. in Lal Bhagwant Singh Vs. Rai Sahib Lala Sri Kishen Das, it is explained,

An order of restitution in the manner asked for in the circumstances of this case would be contrary to the principles of the doctrine of restitution

which 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 that 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.

These observations suggest that the principle of restitution should be applied keeping in view the real justice of the case.

In the present controversy no doubt the decree which the learned Subordinate Judge originally passed was subsequently varied but, at the same

time, the fact remains that the money which was deposited by the judgment-debtors was not really available to the decree-holder. The usual rate of

interest which 3 court awards is 6 per cent. In the present case, however, the learned District Judge directed that interest should be paid only at

three per cent and when he did so, it seems to me, he was in substance effecting an adjustment between the two principles which apply to

situations of this kind.

That being so I am not prepared to disturb the finding of the learned District Judge. It was how-ever pointed out that the figures adopted by the

learned District Judge in Paragraph 12 of his order require rectification. So far as this is concerned, counsel have agreed before mo that as a matter

of computation merely, this figure may be reduced by one third and the amount payable by way of restitution fixed at Rs. 331-59 nps.

The appeal is allowed to this extent and the order of the learned District Judge modified accord ingly. There will be no order as to costs. No

leave.