Sri Chelikani Sitaramayya vs Koppula Pedda Venkanna

Wadsworth, J.—This appeal arises out of an application for restitution made by a judgment-debtor, the decree against whom had been

reversed in appeal. The appellant is the plaintiff whose decree was reversed. The full records of the proceedings after this decree are not before

me and to a large extent I have had to rely upon statements of the learned Advocates on both sides the correctness of which I do not doubt. It is

established that after the decree was passed the appellant took out execution but withdrew his petition on the respondent paying the amount of

costs. After this execution petition had been withdrawn the respondent, presumably apprehending further steps in execution, though there was no

overt act so far as we are aware by the decree-holder, applied to the Court to stay execution of the decree. This application was opposed and the

Court appears to have ordered the respondent (judgment-debtor) to furnish security for the amount of the decree as a condition precedent to the

grant of stay. The respondent found difficulty in furnishing security and instead of obeying the Courts'' order literally, he deposited into Court the full

amount of the decree, praying the Court to order the decree-holder (appellant here) not to draw out the amount except on furnishing security. The

Court did so order; but the decree-holder was unable or unwilling to furnish the security, with the result that the decree remained stayed and the

money remained in Court. Eventually the decree. was reversed in appeal and the respondent applied for restitution, including in his claim interest on

the amount in deposit for the period for which it was in Court. The lower appellate Court has awarded interest at 12 per cent, on this amount and it

is against this order for interest that the present appeal is preferred by decree-holder.

So far as I am aware there is no case which precisely covers the point now before me though the decision of the Bench in Shanmugasundara

Mudaliar and Others Vs. S. Ratnavelu Mudaliar, deals with somewhat similar facts. That was a case of a decree for money in which an application

was made for stay at a time when no execution petition was pending, as is also the position here, but the Court itself ordered the deposit of a

portion of the decree amount in cash and the giving of security for the remainder and directed the decree-holder not to draw the cash deposit

except on furnishing security. The deposit was made; the decree-holder failed to furnish security and draw out the cash deposit and on the decree

being reversed, restitution was ordered in the shape of interest on the amount deposited in cash, the reason being that the basis of an order of

restitution should not be the benefit which had accrued to the party whose decree has been reversed, but the loss suffered by the successful party

as a result of the erroneous decree and the Courts'' orders thereunder.

It is argued for the appellant here that the position in the present case is different in that the order of the Court as a result of the decree and the

stay application was not for the deposit or cash but for the giving of security and that it was the voluntary act of the present respondent in

substituting a cash deposit in place of the security ordered which resulted in the loss of interest on the money so deposited. On the other hand it is

contended for the respondent that though the respondent on his own initiative made the cash deposit instead of giving security, the act of the

respondent was ratified and adopted by the Court in its final order staying the decree by virtue of this deposit and ordering the appellant to furnish

security as a condition for withdrawing the amount deposited. With some hesitation, I accept the contention of the respondent. If once we adopt

the criterion laid down in the case just quoted that the basis of restitution is to be the loss suffered by the judgment-debtor by reason of the

wrongful decree and the orders resulting therefrom I think it follows that the present respondent is entitled to interest on the deposit. It is true that

he could have escaped the necessity for a deposit by furnishing security. He was unable to do so and tendered the money into Court subject to

certain terms. The Court accepted the deposit, and decided that the terms suggested by the respondent were suitable terms upon which the

appellant should be allowed to withdraw the money and it was on the basis of these terms that the Court stayed execution of the decree. It seems

to me therefore that though the first act in the making of the deposit instead of furnishing security was due to the initiative of the respondent the

Court itself took the responsibility for treating that deposit as the basis for the stay order and imposing certain terms upon the appellant. It follows

that the order for the retention of the money in Court as a condition of stay and the terms imposed upon the appellant form part of an act of the

Court resulting directly from a decree which has been held to be erroneous and that order has in fact deprived the respondent of the use of money

which would have been at his disposal had it not been for the erroneous decree. Therefore in accordance with the general principle embodied in

Section 144, Civil Procedure Code, the order of the lower appellate Court requiring the appellant to pay interest on the amount of his deposit is

correct. The appeal is therefore dismissed with costs.

Leave to appeal is granted.