M.P. Palaniappa Chettiar and Others vs S.A. Ramanathan Chettiar and Another

Curgenven, J.—The appellants in the miscellaneous appeal, who are also the petitioners in the revision petition, applied to the Subordinate

Judge, Ramnad, for restitution in the following circumstances. In O.S. No. 6 of 1911 on the file of the same Court they obtained a decree upon a

promissory, note for a sum of Rs. 28,575, and as a result of adjustment between the parties the judgment-debtors paid into Court a sum of Ea.

17,618. Respondent 1 filed the suit O.S. No. 14 of 1921 in the Subordinate Judge''s Court of Sivaganga for a declaration that he was entitled to

the amount of this decree, the appellants being only his representatives, and obtained a declaration to this effect and further that he was entitled to

continue the execution proceedings of the said decree. An appeal (A.S. No. 135 of 1924) was preferred to this Court and this judgment was

modified, the respondent being declared entitled only to a 5/17ths share in the promissory note and therefore in the decree. In connexion with this

appeal application was made for an injunction restraining the respondent from executing the decree in O.S. No. 6 and drawing the money in

deposit and an order was made that he might draw it on furnishing security to the satisfaction of the Ramnad Sub-Court.

The security was furnished and the money was drawn. The result of A. Section No. 135 of 1924 was that the present appellants were entitled

to recover 12/17ths of this amount. They accordingly filed this petition before the Subordinate Judge of Ramnad for restitution. Six issues were

framed, the first of which inquired whether the Court had jurisdiction to entertain the application. The learned Subordinate Judge has found upon

this in the negative. The judgment is not very clear, but he appears to hold that Section 144, Civil P.C., will not apply and that apart from that

provision the Court has no inherent powers to order restitution. The appeal before us relates to the finding u/s 144 and the revision petition has

been filed in case the facts should not come within that section but should justify the Court in exercising its inherent powers. We propose first to

consider the position apart from the circumstance that the respondent has bound himself by the execution of a security bond to obey any orders

that may be passed for the refund of the money. It will be observed that the decree in O.S. No. 14 of 1921 declared that the plaintiff in that suit

was entitled to continue the execution in O.S. No. 6 of 1911. In such circumstances, it has been held in Sethuram v. Shanmugam Pillai (1898) 21

Mad. 353 that he occupies the position of a transferee decree-holder under Order 21, Rule 16, Civil P.C., i.e., he possesses an interest which has

been transferred to him by the operation of law. He may thus be regarded as a party to 0. 8. No. 6 of 1911 and the general question which arises

is whether when execution has been wrongly taken by a transferee decree-holder, the Court can upon discovering the error accord restitution to

the rightful decree-holder. Some attempt has been made to argue that if such a power exists it should be exercised not by the Court which passed

the decree in O.S. No. 6 of 1911 but by the Sivaganga Court, which made the declaration of the respondent''s title. This is a wholly untenable

position. The latter Court was only concerned with making the declaration and had no power to allow the decree-holder to draw the money lying

to the credit of the other suit. This was the function of the executing Court and if execution was taken by the wrong person, it is that Court, if any,

that should rectify the mistake. It is first for consideration, whether the case can be brought within the terms of Section 144, Civil P.C. The section

has replaced Section 583 of the Code of 1882 and is drafted in noticeably wider terms. But we hesitate to say whether a case of this nature was in

contemplation when it was so drafted. The words, ""where and in so far as a decree is varied or reversed, the Court of first instance shall "" seem to

us to be directed to the ordinary case where the decree of the executing Court has been varied or reversed, the use of the phrase ""the Court of first

instance,"" supporting this construction. In more than one case, see for instance in 1 Ashutosh Nandi and Another Vs. Kundal Kamini Dasi and

Others, , and Sohnun v. Mast Ram AIR 1929 Lah. 657, it has been held that while a wider interpretatian should be given to the section, it only

applies where restitution is sought owing to a change in the decree under which execution has been taken. There is indeed a case, Mrs. Burn

Murdoch v. Ma Saw Kyi AIR 1931 Rang. 21, which has taken the contrary view. That too related to a declaratory decree out of the modification

of which in appeal the necessity for making restitution arose. With due respect to the reasoning employed in that case, we find it quite unnecessary

to strain the language of the section, and would prefer to base our decision upon the alternative ground that a matter of this sort lies within the

inherent jurisdiction of the Court. It is a general principle, recognised in a number of decisions, that when a Court has wrongly paid out money it

has not only the power but also a duty to recover it from the person so paid. In Jai Barham v. Kedar Nath AIR 1922 P.C. 269, their Lordships of

the Privy Council make the following observations:

It is the duty of the Court u/s 144, Civil P.C., 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.

And quotation is made from Cairns, L.C., in Rodger v. Comptoir D''Escompete de Paris (1871) 3 P.C. 465:

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 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.

This statement of the law would appear general enough to cover a case where the executing Court has been made to take a wrong step by an

erroneous decision passed by another Court. The same principles underlie the judgment of the Calcutta High Court in Rai Charan Bhuiya and

Others Vs. Debi Prosad Bhakut, where it was found necessary to make adjustment of certain sums overpaid to a mortgagee decree-holder by his

judgment-debtor. It was recognised that the case would not fall under the express terms of Section 144 and the question then arose whether it was

competent to the execution Court, in the exercise of its inherent power, to make an order for restitution with a view to secure complete justice

between the parties concerned.

Reference was made to Prag Narain v. Kamakshia Singh (1909) 31 All. 551, in which Lord Macnaghten delivering the judgment of the Judicial

Committee summarily dismissed an argument based upon the terms of the CPC in a case where mesne profits were claimed from a mortgagee

decree-holder who had purchased the property. It was further held that Section 144 is not exhaustive of the powers of the Court but may be taken

as a guide to determine in what class of oases an order of restitutions may be made. Rajjabali Khan Talukdar and Others Vs. Faku Bibi and

Others, was another case not of the normal kind, in which restitution in respect of benefits acquired by certain third parties was disallowed. The

judgment fully recognises the inherent jurisdiction of the Court, but holds that it cannot deal with persons other than the parties on the record. We

have already given our reason for treating the respondent as a party to 0. Section No. 6 of 1911. A case which bears some resemblance to the

present one, inasmuch as it relates to the effect of a declaratory decree, is Shiam Sundar Lal v. Kaisor Zamani Began (1906) 29 All. 143. Certain

property was attached under a decree as the property, of the judgment-debtor and a claim petition filed and allowed. The decree-holder

thereupon sued for a declaration that the property was liable to sale in execution of the decree and obtained a decree in the first Court. The

claimant however succeeded in appeal and sought and obtained restoration of the property. The learned Judges held that whether an order could

be made under the provisions of Section 583 (the present Section 144) or by virtue of the Court''s inherent jurisdiction, the order was a right and

proper one to make. The correctness of this decision has been questioned in Subbarayudu v. Yerram T.S. Seshasani AIR 1917 Mad. 293, but

perhaps if the declaration had declared the decree-holder''s competence to execute the decree in the other suit the doubt would not have arisen.

These decisions are, we think, enough to show that quite apart from Section 144 it is a power inherent in the Court, and a duty laid upon it, to

accord restitution in any case, such as the present, where money has been improperly drawn out under a decree. That would be so even where

execution has been taken in the ordinary course. Where, as here, permission to draw the money was subject to the execution of a bond embodying

an undertaking to repay it if so ordered, it need scarcely be said that the right to claim restitution is at any rate not weakened. We find it

unnecessary therefore to decide whether or not repayment could be enforced in execution under the bond, apart from the general powers of

restitution which the Court possesses. Since we are basing our decision upon the inherent powers of the Court rather than upon the terms of

Section 144 we may agree with the lower Court in its finding as to the inapplicability of that section and dismiss the appeal. But we allow the Civil

Revision Petition and we answer issue 1 in the affirmative and remand the case for further disposal according to law. Respondent 1 will pay the

appellant''s costs of the proceedings in this Court including the printing charges incurred in the appeal (one pleader''s fee).