Payrte Chand Vs Ashrafunnissa Begum and others

Kondalah

1. This appeal by the appellant, an assignee-decree holder is directed against the order of the Court of the Chief Judge, City Civil Court, Hyderabad, in E. A. No. 28 of 1970 directing him to make restitution to the judgment-debtors u/s 144 C P.C., of a sum of Rs. 2,482-82 with interest at 6% thereon from 19-6-1965 till payment. The facts leading to this appeal may briefly be stated: One Shujyatunnissa Begum, wife of late Shabjabada Mir Mohammad Ali Khan obtained a decree for a sum of Rs. 1,26,000/- towards Mehar from Matruka share in the estate of her late husband Mir Sadatullah Khan and seven others on July 31, 1961 in O.S. No. 144/1958 on the file of the Court of the 1st Additional Judge, City Civil Court, Hyderabad. Defendants 4 to 6 preferred an appeal, C. C. C. A. No. 751692 against the decree passed against them to the extent of the jagir property, pending the disposal of the appeal, the original decree-holder filed E. P. No. 25/1963 and recovered in the execution proceedings a sum of Rs. 2,472-82 by way of cheque on June 19, 1965 from the commutation amount relating to the share of late Mir Mohammad Ali khan and due and payable to the defendants-shareholders. The defendants, but for the execution of the decree, would have been entitled to the aforesaid sum of Rs. 2,472-52 withdrawn by the original decree-holder. Thereafter, i.e., on 15th November, 1965, the original decree-holder assigned the entire decree to the appellant for a cash consideration of Rs. 10.000/- and executed a document on stamp papers worth Rs. 300/- whereunder all (sic) rights and interest of the assignor were to be held thereafter by the assignee with absolute rights and the assignor transferred to the assignee all the benefits and advantages of the said decree. The transferred decree-holder would be entitled to claim the said decretal amount. The appellant paid the consideration of Rs. 10,000/- to the original decree-holder and obtained a receipted therefore. Subsequent to the assignment, the name of the appellant was substituted in the E.P. on August 22, 1966. On July 13, 1967, the regular appeal preferred by the defendants 4 to 6 to this Court was allowed setting aside the decree and Judgment of the trial Court and remanding the suit for fresh disposal in accordance with law. The suit was posted for trial, to 5th September, 1967 and an application to implead the appellant herein as party plaintiff was also filed. But, however before the application for impleading the appellant as party plaintiff was taken up, the suit was dismissed for default on February 4, 1968 as none appeared for the plaintiff. The dismissal of the suit has been allowed to become final E.A. No. 191/68 in E.P. No. 24/63 filed by the defendants 4 and 5, the judgment debtors, against the Plaintiff and the assignee decree-holder for restitution in respect of a sum of Rs. 2,472-82 with interest at 6% was dismissed on 5-1-1970. Thereafter the present E.A. No. 28/1970, to review the earner order dated 5-1-1970 was filed by the judgment debtors 4 and 5. The lower Court allowed the review petition and ordered restitution as prayed for on 20-10-1970 against the assignee decree-holder only. Hence this appeal.

2. Mr. R. Prasad, the learned counsel for the appellant, contends that the Court below erred in ordering restitution in the present case as the amount sought to be recovered was not received by his client as the original decree-holder herself had withdrawn that amount on 19-6-1965 itself, i.e., about 5 months prior to the assignment in his favour. According to the counsel, the provisions of section of 144 C.P.C., can be attracted only when the benefit has accured to or has been taken by a party, be it decree-holder, a judgment-debtor or any one claiming title or interest under them, but not any other person or persons.

3. This claim of the appellant is resisted by Mr. Surendra Kumar, learned counsel appearing for the respondents 1 and 2, CONtending interalia that the court below has rightly ordered restitution and there is no merit in this appeal.

4. The short question that arises for decision is whether, on the facts and in the circumstances, restitution u/s 144 C.P.C. is permissible against the assignee decree-holder in respect of a sum of money recovered in execution of the decree by the original decree-holder even prior to the date of assignment from the judgment-debtors.

5. The answer to the question largely depends upon the provisions of Section 144 C.P.C., which reads as follows:

(1) Where and in so far as a decree on an order is varied or reversed, the Court of first instances 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 order or such part thereof as has been varied or reversed ; and, 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.

(2) xx xx xx xx

S. 144 C.P.C. provides for restitution which means restoring to a party on the variation or reversal of a decree that he lost in execution of the decree. It does not apply unless the party has lost the property in execution of the decree which was subsequently reversed or varied in appeal. The intendment and object of the doctrine of restitution has been explained by the Supreme Court in Lal Bhagwant Singh Vs. Rai Sahib Lala Sri Kishen Das, at 139 thus :

....... 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.

6. This section provides for an equitable relief. It is really just and proper to restore the parties to the original position when the judgment and decree of the trial Court was varied or reversed in appeal. Where the provisions of S. 144 are satisfied, the Court has no option except to order restitution. In other words, S. 144 is not discretionary but it is imperative. The Court has a statutory duty and obligation to order restitution, if the provisions of S. 144 are attracted or satisfied in a given case.

7. I shall now examine whether the provisions of S. 144 are satisfied in the present case. Admittedly the original decree-holder had recovered in execution of the decree a sum of Rs. 2,472-82 from the jagir estate to which the defendants-judgment-debtors were entitled. The decree of the trial Court was, in fact, reversed in appeal in so far as defendants 4 to 6 are concerned and subsequently the suit was dismissed. On the reversal of the decree of the Court of the first instance, the present application has been filed by the parties who are entitled to the benefit by way of restitution.

8. The only submission made by Mr. Prasad is that the person who received the benefit under the original decree is not the appellant herein who is the assignee decree-holder but the original decree-holder and in the circumstances, the judgment-debtors have to proceed only against the original decree holder but not against his client. In support of his argument, he laid stress on the words "any party entitled to any benefit" used in Section 144 (1). In my considered opinion, this plea is devoid of any merit. The words "any party entitled to any benefit" used in Section 144 (1), refer to any party who is entitled to file the application by way of restitution. They have to be read along with the other words "on the application of any party entitled to any benefit by way of restitution". On such application, the Court shall place the parties in the position which they would have occupied but for such decree has been varied or reversed. What really requires consideration is the scope and meaning of the expression "place the parties in the position which they would have occupied but for such decree". The expression "parties" used in the Section 144 (1) takes in not only the persons who were originally parties to the suit but also their representatives in interest. The assignee-decree holder is, no doubt, not a party to the suit. In fact, his application to be impleaded as a party plaintiff was not finally disposed of. Further, in the appeal which was disposed of by the High Court, the assignee-decree-holder, the appellant herein was not added as a party respondent in the place of the original decree-holder. The assignee-decree holder might have contested the appeal in the name of the original decree-holder and it cannot be said that he was not aware of the proceedings in the regular appeal in this Court. The decision of the High Court in appeal, is, therefore, binding on the assignee-decree-holder.

9. By virtue of the assignment which is absolute, the assignee-decree-holder stood in the shoes of the plaintiff, the original decree-holder. True, as contended by Mr. Prasad, that it is not the assignee-decree holder that really recovered the sum of Rs. 2,472-82 in execution of the decree. But the assignee-decree holder for all practical purposes, is the plaintiff from the date of assignment. He was therefore entitled to implead himself as a party plaintiff to the suit subsequent to its remand to the trial Court and continue the suit. He had purchased a decree of Rs. 1,26,000/- for a consideration of Rs. 10,000/- only. If the decree had been affirmed by the appellate Court, the assignee-decree holder would have executed the decree in its entirety and profited himself. It is, however, open to him to recover only the balance of the decretal amount due and payable on the date of the assignment. But nonethless he represents the original plaintiff and for all practical purposes, he, who had obtained the rights of the plaintiff, by virtue of the assignment, has also to take the liabilities involved thereunder. Where a person purchases litigation or obtains assignment of a decree on payment of a sum less than the decretal amount, he would be taking the risk involved in executing the decree, if it is finally confirmed. He must be prepared to lose the amount paid by him in case the trial Court''s decree is reversed in appeals. As the appellant has taken a chance to profit himself, if circumstances permit, he cannot blame any one except himself, when he has to pay in restitution proceeding the sum of money recovered by the original decree-holder prior to the assignment in execution of the decree. By virtue of the assignment which is absolute, the plaintiff has practically gone our of the picture and whatever benefits and liabilities the plaintiff had, would accurate to and devolve on the assignee-decree holder. If the assignee decree holder had succeeded in the litigation and finally was able to recover the entire decretal amount or a substantial part thereof, he would have gained enormously, as he had only parted with a paltry sum of Rs. 10,000/- and obtained assignment of the decree worth Rs. 1,26,000/-. The restitution for which provision is made u/s 144 C.P.C. is intended to benefit the judgment debtor and the parties who have lost something in the execution of the decree which was reversed or modified in appeal. The intendment and object of the section being to benefit the party who is entitled to restitution, the submission of Mr. Prasad that his client, the assignee-decree holder did not have the benefit of the amount realised by the original decree-holder in execution of the decree prior to the assignment and therefore, section 144 C.P.C. is not attracted, cannot be acceded to.

10. I may add that the original decree-holder also is liable to be proceeded against u/s 144 C.P.C. In other words, both the original decree-holder and the assignee-decree-holder are liable to be proceeded against by the concerned judgment-debtor or the party who derived interest from him, under this section. The choice to proceed against both or either of the two decree-holders is with the person or the judgment-debtor who is entitled to claim restitution under this provision. Therefore, it cannot be said that the original decree-holder is not liable to be proceeded against under this provision.

11. I shall now turn to the decisions relied upon by the appellant in support of his plea. The decision of a learned single Judge of the Madras High Court in Kadirvelu Chettiar Vs. Kempu Chettiar and Others, has been relied upon by the appellant for the purpose of showing that it is the party who really received the benefit under the decree which has been reversed, that is liable for restitution and that too, only proportionately if the benefit was received jointly by mote than one person. That decision in my view, does not advance the contention of the appellant. Therein, the transferee, decree-holder had realised the amount of the decree from the judgment-debtors. On the decree being reversed and retrial ordered, the judgment-debtors sought for recovery of the amount paid by them to the transferee decree-holder, from the original decree holder as well as the transferee decree holder. Restitution was ordered by the lower Court. The learned Judge upheld the order of restitution against both the original decree-holder and the transferee decree-holder. Therein the learned Judge observed that section 144 C.P.C. should be widely construed as "its object is to put right what was originally an error of the Court and to restore the parties to the position they would have occupied". The term "party" used in section 144 C.P.C. is of wide import and it is not confined to the original parties to the suit. It applies also to persons who become subsequently concerned. The contention raised on behalf of the petitioner therein that the original decree-holder ceased to be a party subsequent to the transfer and therefore he cannot be proceeded against under S. 144 C.P.C. was rejected by the learned Judge. The learned Judge was of the view that the fact that a party to a suit has obtained the decree wrongly does not alter the legal position. It was observed at page 316 thus :

........the fact that a party to a suit who has obtained a decree wrongly against another person prefers to get the immediate benefit of it by a sale that is to say, a transfer, rather than waiting to execute against the party, in no way affects the rights of the original party to recover in restitution what he has paid over under pressure of the original erroneous decree. The fact that he has paid it over to a nominee of the original plaintiff seems to me wholly irrelevant to his right to recover against the person who caused him to make that payment, namely the original plaintiff. I think that any other view might open the door to fraudlent transfers to men of straw and might defeat the very object of S. 144.

12. This decision in my view, does not support the appellant''s contention but fortifies my view that both the original decree-holder and the transferee decree-holder are liable to make restitution u/s 144 C.P.C.

13. In Govindappa v. Hanumanrhappa (I.L.R. 38 Mad. 36, A Division Bench of the Madras High Court held that restitution of decretal amount can be ordered against the assignee of the decree even though he was not a party to the appeal and that in the absence of fraud, the assignee of a decree is bound by the order of the appellate Court.

14. In Sukhan Singh and Others Vs. Uma Shankar Misir and Others, it was held that restitution can be had not only against the parties to the suit but also against those who derive profit from them.

15. Section 49 B.P.B., on which reliance has been placed by Mr. Prasad, relates to transferee of a decree but it does not in any way improve the appellant''s position. The decision of the Rangoon High Court in Darwood Hashim Esoofy. Tuck Shein AIR 1932 Rag 148 and that of she Madras High Court in S. Chokalingam Asari Vs. N.S. Krishna Iyer and Others, , relied upon by the appellant also are of not much assistance to him. The decision of the Rangoon High Court cited for the purpose of showing that restitution cannot be granted against a person receiving no benefit. Therein the defendant judgment debtor bad to pay a certain sum of money by way of restitution to the plaintiff subsequent to the reversal of the trial court''s decree by the High Court. The matter was taken up to the Privy Council which reversed the decree of the High Court. During the pendency of the appeal before the Privy Council, the assignees of the property were substituted in the place of the original defendant After the reversal of the decree of the High Court by the Privy Council, the defendant sought to recover under S. 144 C.P.C. the sum paid by him from the assignee decree-holder. It was held that no restitution can be ordered against a person receiving no benefit However, such order was passed only against a person who did not loose anything. The party who applied for restitution did not, in fact, pay the amount sought to be recovered by way of restitution as it was the original defendant that paid the sum of money. Hence, facts, that case is distinguishable from the case on band. The decision of a Division Bench of the Madras High Court in S. Chokalingam Asari Vs. N.S. Krishna Iyer and Others, is an authority only for the proposition that a bona fide purchaser from decree-holder for valuable consideration pending appeal cannot be proceeded against under Sec. 144 C.P.C. for restitution on the reversal of the decree in appeal. That case is altogether different from the case on hand.

16. For all the reasons stated, I am satisfied that the Judgment-debtor herein can proceed against the original decree-holder as well as the transferee decree-holder for restitution of the amount recovered from the commutation amount due and payable to them in execution of the decree. The fact that the respondents have chosen not to proceed against the original decree-holder would not, in my considered opinion, take away their right to proceed for restitution against the transferee decree-holder. As pointed out earlier, it is open to the persons entitled to have benefit of restitution either to proceed against both or either of them. The appellant, therefore, cannot succeed in this appeal. In the result, the appeal is dismissed but in the circumstances, there shall be no order as to costs.