SHANMUGASUNDARA MUDALIAR Vs. SRATNAVELU MUDALIAR

JUDGEMENT

(1.) In O.S. No. 5 of 1922 on the file of the Subordinate Judge of Chingleput the appellants as trustees of a certain temple obtained a decree for money against Defendant 1 and others. Defendant 1 among others appealed to this Court against that decree in Appeal No. 218 of 1925. Pending that appeal, Defendant 1 applied for stay of execution of the Subordinate Judge's decree, the amount of which we are told by the date of this appeal with interest had come to about Rs. 7,000. The appellants opposed that stay application, and eventually an order was made by Jackson, J., on the stay petition that execution would be stayed if Defendant 1 paid into-Court Rs. 3,500 and gave security for the remainder of the decree and that, if the Rs. 3,500 was paid into Court in accordance with the order, then the present appellants should be allowed to draw it only on giving security for that amount. Defendant 1 paid that Rs. 3,500 into Court and gave security for the remainder of the decree, and thereupon execution of the decree against him and the other defendants was stayed pending the appeal against that decree to this Court. But, although Defendant 1 paid that Rs. 3,500 into Court, it appears that the present appellants never gave security for the amount, and so they never withdrew it from Court. The appeal of Defendant 1 and others against the Subordinate Judge's decree for money was successful so far as Defendant 1 and some of the other defendants were concerned; and after his success Defendant 1 applied to the Subordinate Judge, in whose Court the Rs. 3,500 had been deposited by him, for restitution. He claimed the Rs. 3,500 with interest upon it. The Subordinate Judge made an order that the Rs. 3,500 should be paid back to him and that the present appellants should pay interest at 6 per cent, on that amount as part of the restitution to be made to Defendant 1. The present appeal is against that order so far as it directs the present appellants to pay interest on the Rs. 3,500 to Defendant 1.

(2.) It is urged for the appellants, first, that they never compelled Defendant 1 to pay that amount into Court and, secondly, that they never got any benefit out of it, as they never withdrew the amount from Court; and for both those reasons it is contended that, although Defendant 1 is entitled to get back the Rs. 3,500, he is not entitled to any interest as part of the restitution now due to him. I cannot agree with the suggestion that the payment of the Rs. 3,500 into the Subordinate Judge's Court by Defendant 1 was a voluntary payment. It is true that the appellants by the time Defendant 1 came to this Court for an order for stay of execution had not taken any proceedings to execute their decree. But there was a decree for money standing against Defendant 1, which he knew might be executed at any moment against him, and he was quite within his rights in coming to this Court and asking that, pending his appeal against that decree, execution might be stayed. When the present appellants got notice of that application, they did not consent to the decree being stayed on security under R. 5 of Order 41, and they were quite within their rights in not consenting. Nor did they disclaim any intention of executing their decree. On the contrary they asserted their right and intention to execute it. Jackson, J., stayed execution of that decree on certain terms : he made an order that, if there was to be any stay at all, Rs. 3,500 must be paid into the Subordinate Judge's Court. That order was obviously intended for the benefit of the present appellants and must have been at their instance. It certainly would never have been made if they had disclaimed a desire for any such order. In the circumstances I think, it is impossible to say that Defendant 1 made the deposit of Rs. 3,500 in the Subordinate Judge's Court as a voluntary payment. Defendant 1 had to pay that amount because a decree, which the appellants were prepared to execute and declared that they intended to execute, had been wrongly made against him, as events have turned out, and for the time from the date he made that payment until the disposal of the appeal against the decree he was deprived of that money. Having been deprived of his money as the result of a decree, which the appellants insisted on executing, but which turns out to be wrong, he is clearly entitled to restitution.

(3.) Mr. Srinivasa Aiyar, who appears for the appellants here, does not deny that restitution in such cases, if it is to be complete, must often include not only the actual money which has been deposited but interest thereon, and that is provided by Section 144 of the Code of Civil Procedure. But he contends that, when we are trying to ascertain what is the exact restitution which should be made in such a case, whether it should be the money deposited alone or the money with the addition of interest upon it, the test to be applied is, not the injury which has been done to the judgment-debtor who has had to pay the amount under a mistaken decree but the benefit which has been obtained by the other party, or at least that no interest should be ordered where, although the judgment-debtor has suffered an injury in consequence of such compulsory payment the decree-holder has not derived any benefit from it. It appears to me that that is not the way to apply the principle of restitution, which is recognised in the Code. The provision in the Code is to be found in Section 144, which lays down that "in so far as a decree is varied or reversed, the Court of first instance shall, on the application of any party entitled to any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, 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". Now, reading that provision in its ordinary plain meaning, the restitution mentioned appears to me to be on its face the restoration to the injured party of what he has lost, not primarily the deprivation of the other party of what he has wrongfully gained. It is the party entitled to restitution who can apply to the Court and claim the help of the Court in the matter: it is for his benefit that the provision is introduced. The restitution must be such as will put the parties in the position which they would have occupied but for the wrong decree. The party who is to be assisted by Court must be put into the position which he would have occupied but for the wrong decree. Is it an answer to that provision to say that it cannot be given effect to because the other party happened to gain no benefit by the wrong decree or order which had been made? I can see nothing in the section to lead us to suppose that it can be defeated in the way. And, if we go further into the section, we find the words "For this purpose the Court may make any orders, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly consequential on such variation or reversal". Take damages. Can it be suggested that the measure of damages in such cases is, not what the wronged party has suffered, but what the other party has gained? Take compensation. Is the wronged party to be deprived of compensation merely because the other party has made no actual profit out of the mistaken decree or order, which is afterwards reversed? I think, if we read the section in its natural way, it will be found to be directed to the benefit of the wronged party and its object to be, so far as possible, to put him back into the position in which he would have been but for the wrong decree or order which is afterwards reversed. Surely that is how the matter should be treated. The Court unfortunately by a mistaken decree has done a wrong to the judgment-debtor. When the Court has done a wrong, it is the Court's duty, so far as possible, to put it right. The Court is not directly interested in depriving the other party of a benefit which he may have got from a mistaken order or decree. It is the wrong that has been done which the Court should wish to put right. The actual benefit which may have been gained by the other party may often be almost impossible to estimate; but that is not the matter in which the Court is interested. If we look at Rodger V/s. The Comptoir d Escompte de Paris (1871) L.R. 3 P.C. 465, in which this matter was discussed by Lord Cairns, I think it will be seen that it is the wrong which has been done by the mistaken order or decree with which the Court is primarily concerned and which the Court must always wish to rectify, not the incidental advantage which the other party may have been fortunate enough to get. That principle has been applied in a case somewhat like this, Dalu Ram V/s. Ramanand A.I.R. 1929 Pat. 593. There the plaintiff was made to pay interest as part of the restitution of the money deposited by the defendant towards the decree, not only from the date when the plaintiff drew that money from Court, but from a much earlier date, when the defendant had deposited it in Court, although it was represented that between those two dates the plaintiff had got no benefit whatever from the money.