Restitution (Sec. 144)

Doctrine of restitution

The doctrine of restitution implies to brings the aggrieved party to the original position where the benefit of the erroneous judgment of the court is received by the other party who was not entitled to such benefit.  Restitution is not a new concept and Section 144 merely gives statutory recognition to this principle. Section 144 of CPC deals with the application for restitution.

Section 144 states that:

When a decree or order of the Court has been:

varied/reversed in any appeal, revision or other proceedings;

is set aside/ modified in any suit instituted for that purpose.

The Court that passed the decree/order will grant restitution on receiving an application of the party entitled to the benefit

The court in the case of Mahjibhai Mohanbhai Barot vs Patel Manibhai Gokalbhai held that an application for restitution is an application for execution of a decree.

The Supreme Court in the case of Lal Bhagwant Singh vs Rai Sahib Lala Sri Kishen Das held that the party who received the benefit of the erroneous judgment is by law under an obligation to make restitution to the other party for his loss.   

The same view was reiterated by the court in the case of Binayak Swain vs Ramesh Chandra Panigrahi, the doctrine of restitution means that, on reversal of a decree or order, an obligation is imposed by law on the party who has received the benefit of the erroneous decree to make restitution to the other party for his loss. This obligation automatically arises when the decree or order is reversed or modified by the Court. It necessarily carries with it the right of restitution for all the things that have been done under the erroneous decree. The Court while making restitution is under a duty to restore the parties, as far as possible, at the time when the erroneous action of the Court displaced them.

The Apex Court in the case of Union Carbide Corporation v. Union of India held that restitution is a principle of equity and is subject to the Court’s discretion. Section 144 of CPC doesn’t grant any new substantive right to the party not already obtained under the general law. The Court is obliged to ensure that no one goes back with a feeling that he was impaired by an act which he did on the faith of the Court’s order.

Actus curiae neminem gravabit

The Latin maxim actus curiae neminem gravabit means the act of court should not affect anyone and is founded upon the principle of equity. The Court is obliged to ensure that no one is endured by its order and it should not pass any order to the prejudice of any person. The apex court reiterated the maxim of actus curiae neminem gravabit in the case of Odisha Forest Development Corporation v. M/s Anupam Traders.    

Conditions

In applying for restitution, the following conditions must be fulfilled:

The decree/order must have been varied or reversed in any appeal, revision or is set aside or modified. The party in respect of the reversed or modified decree/order must be entitled to benefit by way of restitution or otherwise. The relief claimed by the party must be properly consequential of the variation, reversal, setting aside or modification of the decree/order.

The Orissa High Court in Banchhanidhi Das vs Bhanu Sahuani laid down certain principles to be followed for the application of restitution:

There should be an erroneous judgment passed by the court. The party to the record must have received the benefit of the erroneous judgment. The party applying for restitution must show that as a consequence of the erroneous judgment or decree, a party received the benefit.

The erroneous judgment or decree must have been reversed in appeal.

Who may apply?

A person may apply for restitution who:

Was a party to the order or decree being varied, reversed, set aside, or modified. Is entitled to any benefit by way of restitution or otherwise in respect of the order or decree being varied, reversed, set aside, or modified.    

Against whom restitution may be granted?

The court may grant restitution against the party who has wrongly received the benefit under the erroneous decree or order of the court. The party receiving the benefit is under an obligation to make restitution to the party for what he has lost.

Who may grant restitution?

The court which has passed the original decree or order may grant restitution on an application being made to it by the party who is entitled to benefit from such reversed or varied decree or order.

What remedies can the court can grant?

The court under Section 144 can make any orders as a consequence of a decree or order being varied, reversed, modified, set aside for the refund of costs and for payment of interest, damages, compensation, and mesne profit.

Nature of proceeding

The nature of proceeding under Section 144 is execution proceedings. The process to get an order or decree into effect is called execution proceedings.

Extent of restitution

Section 144 is not exhaustive but inclusive. Even if a matter does not fall within the scope of Section 144, the court has the power to grant restitution on its discretion.   

Inherent power to grant restitution

Under Section 151, a court has an inherent power to make such order as may be necessary for meeting the ends of justice or to prevent the abuse of the process of Court other than the power to grant restitution under Section 144. The power of the court to grant restitution is not confined only to Section 144, the court has an inherent power to grant the remedy of restitution where Section 144 does not apply. There are different circumstances in which the court can order to restore the status quo ante (previously existing state of affairs) to meet the ends of justice.

It was held in K.N. Krishnappa vs T.R. Gopalkrishna Setty that under Section 151 C.P.C, the inherent powers of the Court can be invoked for restoring the parties to the position in which they were, prior to the execution.

Bar of Suit

Section 144(2) bars a separate suit instituted for obtaining any remedy if restitution or other relief could be obtained by making an application under Section 144(1).