Judgment:
1. In this order we are considering CA No. 45 of 2001 filed by the petitioner in CP Nos. 11/12/111/1995. Both the petitions filed by the petitioner as Trustees of Canbank Mutual Fund were disposed of by this Board by a common order dated 13-6-1996 directing National Thermal Power Corpn. Ltd. (NTPC) to pay the redemption amount in respect of the bonds impugned in those petitions. This order was challenged by NTPC in the Delhi High Court which set aside the order of this Board with the direction that the disputes between the parties should be referred to the High Power Committee of the Government of India. Aggrieved by this direction, the petitioner filed an SLP before the Supreme Court, which, while setting aside the order of the High Court, has restored the order of this Board. Accordingly, NTPC paid the face value of the Bonds to the fund and declined to pay any interest for the delayed payment. In view of this, the petitioner moved an application before the Supreme Court seeking for consequential order relating to payment of interest.
The Supreme Court disposed of the application stating that it was for the parties to move this Board for proper orders. Accordingly, this application has been filed seeking for directions to NTPC to pay interest from the due dates of redemption of the bonds till the date of payment.
2. To appreciate the prayer made in the application, it would be appropriate to give a summary of the disputes raised in the petitions and also the orders passed by this Board, High Court and the Supreme Court. The applicant, viz., Canara Bank, in the capacity of the Trustee of Canbank Mutual Fund (the fund) filed two petitions under Section 111(4) of the Companies Act, 1956 ('the Act"), seeking for rectification of the Register of Bond Holders of NTPC in respect of 13% and 14% NTPC Bonds of the face value of Rs. 7.745 crores and Rs. 2.17 crores, respectively. It had also sought redemption of the bonds along with the interest due as well as further interest. Since the issues raised in both the petitions were common, they were considered together. Canara Bank are the trustee of Canbank Mutual Fund. The fund purchased 1396 secured redeemable NTPC bonds of the face value of Rs. 57.5 crores and 14% NTPC bonds of the face value of Rs. 2.17 crores.
The letter of allotment in respect of 1396 bonds were lodged with NTPC on 30-6-1989 and the 14% bonds were lodged with NTPC in instalments on different dates from 11-8-1992 to 11-2-1993. In respect of 13% bonds, the letters of allotments were endorsed in favour of 'Canara Bank - Trustee Canbank Mutual Fund'. The fund sold all the bonds except to the extent of Rs. 7.745 crores and these bonds were lodged with the NTPC for redemption on 23-5-1995. Likewise, 14% bonds were also lodged for entering the name of 'Canara Bank -Trustee Canbank Mutual Fund'. The NTPC had refused to consider the request of the fund in respect of both these bonds on 3 main grounds - that Canara Bank and NTPC being Government undertakings, the disputes between them should be referred to the Committee of Secretaries of the Government of India for resolution in terms of the judgment of the Supreme Court in ONGC v.Collector of Central Excise JT 1991 4 SC 158, that the company cannot take note of a trust in the Register of Members and that Canara Bank owed certain amount of money to NTPC against which the proceeds of the bonds had to be adjusted.
3. All these grounds were negatived by this Board in its order dated 13-6-1996 and directed NTPC to make the payment of the redemption amount in respect of both these bonds to the fund. Aggrieved by this order, NTPC filed an appeal before the Delhi High Court which set aside the order of this Board and directed that the disputes raised in these petitions should be referred to the Committee of Secretaries of the Government of India in terms of the decision of the Supreme Court in ONGC's case (supra). Aggrieved by this judgment, Canara Bank filed an SLP before the Supreme Court, which, while setting aside the order of the High Court, restored the order of, this Board dated 13-6-1996 and also awarded a cost of Rs. 10,000 to Canara Bank, In view of this, NTPC has paid the redemption amount on 11-12-2000. Since the redemption amount comprised of only the face value of the bonds, the fund accepted the amount under protest and sought for interest for the delayed payment inasmuch as the 13% bonds were due for redemption on 13-3-1995 and the 14% bonds on 29-3-1993 arid 12-3-1994. The NTPC refused to pay any interest and, accordingly, Canara Bank approached the Supreme Court for directions to NTPC to pay interest at the coupon rates for the delayed period. Disposing of this application, the Supreme Court observed that it was for the parties to approach this Board for proper orders. Accordingly, Canara Bank has filed this application seeking for directions to NTPC to pay interest'at coupon rates for the delayed period as per the statement enclosed with the application according to which the interest amount works out to Rs. 7.93 crores.
4. Shri Jay Savla, appearing for the petitioners submitted : This application has been filed in terms of Section 144 of the Code of Civil Procedure, 1908 NTPC, instead of complying with the orders of the CLB dated 13-6-1996 by making payment of the redemption amount, filed an appeal on frivolous grounds. By doing so, even though NTPC obtained a favourable order from the High Court, yet, the order of the CLB was restored by the Apex Court. The initiation of the appeal proceedings by NTPC has delayed payment of the redemption amount by nearly, 4 years during which period NTPC had enjoyed the benefits of the redemption amount of nearly Rs. 10 crores. As per Section 144, the petitioner is entitled to make an application for restitution and seek for interest for the delayed period on the principles of unjust enrichment. The object of the restitutionary claim is to strip the defendant of a benefit which he has unjustly claimed at the expense of the petitioner.
He further submitted that the fund manages mutual funds of thousands of members of the public and it is for their benefit that NTPC should be asked to pay the interest for the delayed period. He relied on the following cases : L. Gurum Ditta v. T.R. Ditto AIR 1935 PC 12 : The duty of the Court in awarding restitution under Section 144 is imperative. It shall place the applicant in the position in which he would have been if the order had not been made; and for this purpose the Court is armed with the powers as to mesne profits, interest and so forth. Hence, restitution ordinarily involves interest also and Court can grant the same.
Pappu Reddiar v. P.S.V.Rm. Ramanatha Iyer AIR 1963 Mad. 45 : Granting of restitution is one of the highest duties of the Court to see that no party suffers by an erroneous act done by it. On reversal of a judgment, law places an obligation on the party who received a benefit on the erroneous judgment to make restitution to the other party of what he had lost. . . Restitution properly so-called is restoration to the original state which would include reparation for the injury done. Section 144 recognizes this when it says that for the purposes of placing the parties in a position which they would have occupied but for the decree that has been set aside, the Court would have powers to direct the payment of interest, damages, mesne profit etc. Essentially, therefore, restitution is doing justice between the two parties.Binayak v. Ramesh Chandra Panigrahi [1966] 3 SCR 4 : The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost. This obligation arises automatically on the reversal or modification of the decree and necessarily carries with it a right to restitution of all that has been done under the erroneous decree and the Court in making restitution is bound to restore the parties so far as they can be restored to the same position they were in at the time when the Court by its erroneous action had displaced them from.
Kavita Trehan v. Sahara Hygiene [1994] 5 SCC 380 : It is inherent in the general jurisdiction of the Court to act rightly and fairly according to the circumstances towards all parties involved....Special Officer (Revenue), Kerala Electricity Board v. MRF Ltd. JT 1995 9 SC 368 : It is the duty of all the Tribunals to take care that no act of the Court in whole of the proceedings does any injury to the suitors in the Court.
Padanathil Reqmini Amma v. P.K. Abdulla JT 1996 1 SC381 : For the purpose of restitution, the Court may make such orders including order for the refund of cost and for the payment of interest, damages, compensation and mesne of profit which are properly consequential on such variation, reversal, setting aside or modification of the decree or order.
Law of Restitution by Foff & Jones, 4th edn.: The Law of Restitution encompasses all claims founded upon the principle of unjust enrichment. Restitutionary claims are to be found in equity as well as at law. Restitutionary law has many branches. The law of quasi contract is that part of restitution which stems from the common indebitatus counts for money had and received and for money paid and from quantum meruit and quantum valebant claims.
5. Shri Ashwani Kumar, senior advocate, appearing for NTPC submitted : This application is misconceived and abuse of the process of this Board. The provisions of Section 144 is not at all applicable to the facts of the case inasmuch as the order of this Board dated 13-6-1996 has neither been modified nor set aside and as a matter of fact it has been restored. The question of application of Section 144 would arise only when the order of the court of first instance is either varied, modified or set aside. Since in this case, the application is founded on setting aside the order of the High Court, this application is not maintainable in terms of Section 144. Even otherwise, in the original petition itself, the applicant had asked for interest after the period of maturity at 24 per cent which prayer had been expressly rejected by this Board on the ground that NTPC had genuinely disputed the ownership. Since even at the time when the original order was passed, there was a gap between the dates of maturity and the date of the order, this Board did not consider payment of interest for that period.
Since this order is merged with the order of the Apex Court, the same is binding on all the parties and has become res judicata. Further, the Supreme Court has already awarded a cost of Rs. 10,000 to the applicant. Therefore, not only the provisions of Section 144 are not applicable, even this Board has rejected the prayer for payment of interest and the Supreme Court had adequately compensated by awarding cost. Under the circumstances, this application, being frivolous, should be dismissed.Vijayabai v. Shriram Tukaram [1999] 1 SCC 693 : It would be impermissible to permit any party to raise an issue inter se where such an issue under the very Act has been decided in an earlier proceeding. Even if res judicata in its strict sense may not apply but its principles would be applicable.Sajjadanashin Sayed v. Musa Dadabhat Ummer [2000] 3 SCC 350 : If the matter was in issue directly and substantially in a prior litigation and decided against a party, then the decision would be res judicata in a subsequent proceeding.K.K. Modi v. K.N. Modi [1998] 3 SCC 573 : It is an abuse of the process of a Court and contrary to the justice and public policy for a party to re-litigate the same which has already been tried and decided earlier against him. The re-agitation may or may not be barred res judicata but if the same issue is sought to be reagitated, it also amounts to an abuse of process of the Court.
Buddhi Kota Subbarao v. K. Parasaran AIR 1996 SC 2687 : No litigant has a right to unlimited drought on the Court time and public money in order to get his affairs settled in the manner as he wishes. Easy access to justice should not be misused as a licence to fight misconceived or frivolous petitions.Zafar Khan v. Board of Revenue AIR 1985 SC 39 : In a proceeding under Section 144, the party applying for restitution has to satisfy the Court of the first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and, therefore, restitution must be ordered.
6. We have considered the pleadings and arguments of the counsel. Since this application has been filed in terms of Section 144, it is necessary to reproduce the same : "Application for restitution.--(1) Where and insofar as a decree or an order is varied or reversed in any appeal, revision or other proceeding or is set aside or modified in any suit instituted for the purpose, the Court which passed the decree or order 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, reversed, set aside or modified, 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, reversal, setting aside or modification of the decree or order.
Explanation.--For the purposes of Sub-section (1), the expression 'Court which passed the decree or order' shall be deemed to include-- (a) where the decree or order has been varied or reversed in exercise of appellate or revisional jurisdiction, the Court of first instance; (b) where the decree or order has been set aside by a separate suit, the Court of first instance which passed such decree or order; (c) where the Court of first instance has ceased to exist or has ceased to have jurisdiction to execute it, the Court which, if the suit wherein the decree or order was passed were instituted at the time of making the application for restitution under this section, would have jurisdiction to try such suit.
(2) No suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by an application under subsection (1).
7. A reading of the provisions of section would show that the object of this section is to restore the benefit lost by a litigant due to an order/decree passed by a Court, which order, on appeal or revision is reverse, modified or set aside. By this, the parties are placed in a position which they would have occupied but for the erroneous order. In such cases, the section also provides for ordering payment of consequential cost, interest, damages, etc. The learned counsel for the applicant has cited authorities explaining the purport and the object of the principle of restitution which, inter alia, include that on reversal of a judgment, law places an obligation on the party who received a benefit on the erroneous judgment to make restitution to the other party of what he had lost. In the present case, this Board had ordered redemption of the Bonds along with interest by an order dated 13-6-1996. Since, interest warrants had already been encashed on due dates, the face value of the bonds of nearly Rs. 10 crores would have to be paid to the applicant in terms of that order. However, due to the appeal and the resultant order, which has been subsequently set aside, this money was retained with NTPC and it has enjoyed the benefits of this amount, till it was paid to the Fund on 11-12-2000. Thus, according to the learned counsel for the applicant, all the ingredients of this section are present in this case meriting issue of directions to NTPC to pay interest at the coupon rate from the due dates of redemption till the date of payment of the face value of the Bonds.
However, the learned counsel for NTPC pointed out that the provisions of this section would apply only when the order/decree of the Court of the first instance - in this case the order of this Board - had been set aside or reversed and not otherwise. On this proposition he relied on the case of Zafar Khan (supra). From a reading of this judgment we are not in a position to draw such a proposition from this judgment. It only says that the Court of first instance should be satisfied that a decree or an order has been set aside or modified on appeal or revision. As a matter of fact, this issue as to whether, an appellate order which has been set aside could entitle a person to apply for restitution has been answered by the Supreme Court in Binayak's case (supra). In this case, a money suit against the appellant was dismissed by the trial court but the first appellate court passed an ex pane decree against him. The appellant's property was sold in execution and purchased by the decree holder. The appellant went to the High Court which set aside the ex parte decree and remanded the suit. The appellant then filed an application for restitution under Section 144.
The trial court allowed the appellant's application for restitution.
The Supreme Court upheld the order of restitution observing. "The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost. The Court in making restitution is bound to restore the parties so far as they can be restored to the same position they were in at the time when the Court by its erroneous action has displaced them from. Thus, in that case, like the present case before us, the cause of action for claiming restitution was setting aside of the appellate order and not the order or decree of the Court of the first instance. Thus, it is clear from this case that as long as any order - whether by a Court of first instance or by an appellate court - is set aside, reversed or modified, an application for restitution could be filed before the Court of first instance. This case also indicates that in applying the provisions of a statute, one should also take into consideration the spirit of the provision. The object of the section is that no one should suffer on an erroneous order of a Court. Once it is established that an order which has been set aside has bestowed some benefit on one at the cost of the other, the provisions of this section come into play. It is also to be noted that the explanatory note (a) to Section 144 is a deeming and inclusive provision and does not stipulate that only when the order/decree of the Court of first instance is varied, modified, reversed or set aside, the provisions of this section would apply. In this connection it is worthwhile referring to the observation of his Lordship Chief Justice Venkatachaliah in Kavita Trehan 's case (supra) at paragraph 22 "The jurisdiction to make restitution is inherent in every Court and will be exercised whenever the justice of the case demands. It will be exercised under inherent powers where the case did not strictly fall within the ambit of Section 144". Section 144 opens with the words "Where and insofar as a decree or an order is varied or reversed in any appeal, revision or other proceedings or is set aside or modified in any suit instituted for the purpose.,." The instant case may not strictly fall within the terms of Section 144 but the aggrieved party in such a case can appeal to the larger and general powers of restitution inherent in every Court". It is to be noted that in this case, a Single Judge of the High Court while setting aside an interim order of a lower court ordered restitution and this was upheld by the Division Bench and also by the Supreme Court. The Supreme Court approved the observation of the Single Judge "Dismissal of the suit has the effect of automatic dissolution of the interim order. But what is the use of setting aside or reversing a wrong order of the Court if a party who has suffered as a consequence thereof reminds seething with pain of injustice even when the order is knocked down. Healing touch in such a case is a must. The strain of injustice must be removed, at least bleached if it is not possible to totally eradicate it...." "There is no higher principle for the guidance of the court than the one that no act of courts should harm a litigant and it is the bounded duty of the court to see that if a person is harmed by a mistake of the court, he should be restored to the position he would have occupied but for that mistake". Thus, we find that in a case of restitution, equitable consideration would overweigh the procedural aspects. In the present case, the applicant alleges that it has been denied the benefit of the money due on redemption of the bonds and that NTPC has been benefited by unjust enrichment because of the order of the High Court which has subsequently been set aside.
Therefore, this application is maintainable. Further, the Apex Court has also permitted the applicant to move this Board. Now our examination would be limited to see whether by virtue of the order of the High Court NTPC has gained any benefit at the cost of the applicant.
8. Now the issue is whether there is any justification for restitution as prayed for by the applicant. The admitted position is the applicant would have received a sum of Rs. 9.91 crores in the middle of 1996 in terms of the order of this Board dated 13-6-1996 but for the order of the High Court. This amount was kept with NTPC till December, 2000.
NTPC is a commercial organization and must have utilized this money retained by virtue of the order of the High Court and employed the same gainfully in its commercial activities. A large members of public who had invested in the mutual fund schemes of the fund, have suffered due to the nonavailability of this money in time. In the aforesaid circumstances, it will be lawful, conforming to equity and well established principles of restitution, for the fund to claim interest on the face value of the bonds for the period during which the money was retained with NTPC.9. The applicant has sought for payment of interest from the dates of maturity of the Bonds till the date of payment of the redemption amount. The learned counsel for NTPC pointed out that this Board had already rejected the prayer for interest for the delayed period and, therefore, the applicant cannot revive the same prayer now. On this proposition, he cited a number of cases. We do agree that one cannot reopen an issue which has already been decided in an earlier proceeding. Further, the object of restitution is to place the parties in the same position that they would have occupied but for the order of a Court which is subsequently set aside. By allowing the prayer of the applicant to allow interest from the dates of maturity would place it in a position which was not intended by the earlier order of this Board as this Board had rejected the prayer for interest from the dates of maturity in its order dated 13-6-1996. But at the same time, that order did not cover and rightly could not have covered the period subsequent to that order as no one could have anticipated the subsequent events.
Therefore, the applicant would be entitled for restitution in the form of interest only for the period subsequent to the date of that order.
In other words, our order for restitution would cover only the period after 13-6-1996 being the date of the earlier order. We find that after the Supreme Court passed the order on 5-12-2000, NTPC had paid the face value of the bonds on 11-12-2000, i.e., after a period of 6 days.
Assuming that in case NTPC had not preferred an appeal against the order of the Board dated 13-6-1996, it would have paid the amount after the same number of days, the delayed period would start only from 19-6-1996. In view of this, NTPC is liable to pay interest for the period from 19-6-1996 to 11-12-2000. As far as the rates of interest are concerned, we find justification in the claim of the applicant that the interest should be at the coupon rates, that is, 13% and 14%. We have also noted the contention of the learned counsel for NTPC that since the Supreme Court has already awarded a cost of Rs. 10,000 to the applicant, it cannot claim any interest. Awarding of cost could never be considered to be a substitution of other legitimate claims as the cost awarded is only to compensate either fully or in part the cost of litigation.
10. Accordingly, we direct NTPC to pay interest at coupon rates of 13% and 14% for the period from 19-6-1996 to 11-12-2000 on the face value of the Bonds. The applicant will compute the interest due as above and send a letter of claim to NTPC which will pay the amount so computed (subject to verification) within 15 days from the date of receipt of the claim letter from the applicant.
11. With the above direction we dispose of this application, however, without any order as to cost.