Neelakanta Iyer Subramania Iyer Vs. Ramakrishna Iyer Venkitachalam Iyer and anr. - Court Judgment

Isaac, J.

1. This is an appeal by the second plaintiff in O. S. No. 110 of 1119 in the Court of the erstwhile Second Judge, Alleppey from an order under Section 144, Civil P. C. The suit was for recovery of 47 acres of paddy land with mesne profits from defendants Nos. 6 and 7, on deposit of Rs. 10,800. The suit was dismissed with costs. But in A. S. No. 336 of 1124 (T), it was decreed with costs by the Travanoore-Cochin High Court. Pursuant to the decree of the High Court, the second plaintiff recovered possession of the property on 3-4-1954. Defendants Nos. 6 and 7 filed C. A. No. 744 of 1957 in the Supreme Court against the decree of the High Court. The appeal was allowed by the Supreme Court with costs, by its judgment dated 30-3-1961. Thereupon an application under Section 144 Civil P. C. was filed by defendants Nos. 6 and 7 on 12-6-1961 for restoration of the property with mesne profits. Though the application was resisted by the second plaintiff on several grounds, the property was delivered back to the 6th and 7th defendants through Court in November 1961; and thereafter only the question relating to the mesne profits remained to be determined.

2. The claim for mesne profits relates to the period from April 1954 to November 1961. The property concerned in this case formed part of a larger block of paddy land, having an extent of 257 acres. There was a suit for partition of the whole land, as O. S. No. 102 of 1116, in which the parties to this appeal were also parties. The appellant herein was appointed receiver in that suit; and during all the relevant period, he was in management of the property. Regarding the claim of the respondents for mesne profits, the appellant contended that it had been fixed in the suit at 2090 parahs of paddy, and that the respondents were not entitled to get anything more than that rate. Secondly, it was contended that the appellant, as receiver, had accounted to the Court in O. S. No. 102 of 1116 for the income of the property, and that the respondents right was only to pet in that suit their share of the income from the property. Thirdly, it was contended that the whole property was leased out from year to year through Court in O. S. No. 102 of 1116 for cultivation, that the appellant had not been able to collect from the lessees the whole income, and that he was not liable for what he has not collected. The appellant did not let in any evidence in support of his contentions. The first respondent was partly examined, when it was agreed by the parties that the case can be disposed of by both parties filing statements with regard to the amounts payable as mesne profits, and after hearing their counsel. Accordingly, both parties filed statements; and the case was disposed of by the lower Court after hearing the counsel.

3. The statements filed in the lower Court showed that both the parties agreed that the mesne profits may be determined on the basis of the amount for which theproperty was leased out in O. S. No. 102 of 1116. The dispute related only to the market value of paddy, and the claim of the appellant for expenses, and the commission which he claimed to get as receiver's remuneration. With respect to these matters, the appellant's claims were finally conceded by the respondents; and the lower Court passed an order fixing the mesne profits as the net amount shown in the statement filed by the appellant's counsel as payable to the respondents. The lower Court also awarded interest on the mesne profits.

4. Ordinarily, one would have thought that the above order would put an end to the litigation. The concessions made by the respondents in the lower Court were apparently for buying peace, and getting out of the long drawn-out litigation, which was started by the appellant about twenty-three years ago. This application for restitution itself has been pending in that Court for about six years. Paddy has been valued in fixing the mesne profits only at the rates fixed by the Government, though it is well known that, during the years concerned in this case, paddy had a far higher price in the open market, which is sometimes called the blackmarket. However, the same contentions as were originally raised by the appellant in the lower Court were seriously pressed before us by his learned counsel. These contentions have no merit, and the appellant is also precluded from raising them, in view of the fact that the mesne profits were determined by the lower Court in the manner agreed to by the parties. The appellant's learned counsel, however, contended that the lower Court failed to consider the appellant's contention that his liability for mesne profits was only for what he had or might reasonably have received as income from the property, and that, therefore, he was liable only for what he actually received from the lessees. It was submitted, that, in respect of the rent for one year, he received only part of the rent, and that he had filed a suit for the balance. It was also submitted that 110 rent for another year had been deposited by the lessee in Court in O. S. No. 102 of 1116.

5. These are all matters of evidence. The appellant did not adduce any evidence in the lower Court. If the lessee had deposited any amount in O. S. No. 102 of 1.116, the appellant was the only person entitled to receive the same under the decree, as it then stood before it was reversed in the Supreme Court. One does not know whether be has not withdrawn from the Court his share of the income in respect of this property. If he has not done it, he may do so even now; but that is no answer to the respondents' claim against him for mesne profits. Again, he cannot absolve himself from the liability by simply saying that he has not realised the whole amount, and that he has filed a suit. He has to establish that he acted in the ordinary course of business in giving the lease, that he took all reasonable steps in recovering the whole rent, and that, in spite of such efforts, he could not recover the same. Without these tactual basis, his contention cannot be sustained. We also find from a perusal of the statement which he filed in the lower Court that the difference between what he has been found liable to pay and what, according to his contention, he would have been liable, is only a small amount; and there is no justification to remand this ease for a further enquiry on these questions of fact.

6. The learned counsel also raised a contention that the lower Court was not justified in awarding interest on the mesne profits, and that, at any rate, interest on the sum of Rs. 10,800, which the appellant deposited in Court, when instituting this suit, should have been given credit to him. He submitted that restitution arises in equity, and that mesne profits have to be worked out according to the principles of justice, equity and good conscience. The learned counsel cited a decision of the Division Bench of the High Court of Allahabad in Wasiq Ali Khan v. Nand Kishore, AIR 1954 All 119, in support of the above contention. In that case a mortgagor filed a suit for redemption of a usufructuary mortgage which was decreed by the trial Court; and the plaintiff took possession of the property in execution of the decree on depositing the mortgage amount. The decree was reversed in appeal; and the defendants claimed redelivery of the property with mesne profits by way of restitution. The plaintiff contended, among other things, that the defendants should have withdrawn the mortgage amount, and that the amount which the defendants would have earned by way of interest, if the mortgage amount was drawn by them, should be deducted from the mesne profits. In accepting the above contention, Malik C. J., who pronounced the judgment of the Court, said:--

'Here the successful defendants are claiming mesne profits from the plaintiff for the period during which they had been deprived of possession of the property under the decree of the trial Court. These mesne profits have to he worked out according to the principle of justice, equity and Rood conscience, there being no other guide for the purpose. In working out the figures, it appears that the loss suffered by the defendants could have been mitigated by them to some extent if they had withdrawn the amount which had been deposited and by reason of which deposit they had been deprived of possession of the property. It is not shown to us that the withdrawal of the amount would have, in any manner, prejudiced the defendants' case. In the circumstances, it appears to us that they voluntarily suffered part of the damage by allowing the money to remain in deposit in Court when they could have easily withdrawn the amount. In calculating mesne profits, therefore, the Courts can take that fact into consideration and allow them only such damage as they did not suffer voluntarily'.

7. The above decision was followed by our learned brother, Krishnamoorthy Iyer J. in Sreedevi Amma v. Rugmini Amma, 1966 Ker LJ 844. In that case also, the plaintiff obtained a decree for redemption of a mortgage, and took delivery of the property from the defendants in execution, after depositing the mortgage amount. The defendants filed an appeal; and during the pendency of the appeal, the tenancy law was amended. On the basis of the amendment, the trial Court's decree was reversed; and the defendants claimed restitution. The plaintiff contended, among other things, that he should be given credit for interest which the defendants would have earned, if they withdraw the amount deposited in Court by the plaintiff as mortgagor. The learned Judge accepted the contention on the authority of the above decision of the Allahabad High Court. He also quoted a passage from page 544 of Civil Procedure Code by Mulla, 13th Edition, in support of his view. It may be seen that the only authority that the learned author relies on for the proposition contained in the said passage is the decision of the Allahabad High Court. Our learned brother has extracted also the following passage from the judgment of the Privy Council in Rodger v. The Comptoir D' Escompte De Paris, (1871) 3 PC 465, in support of his decision:--

'It is contended, on the part of the Respondents here, that the principal sum being restored to the present petitioners, they have 110 right to recover from them any interest. It is obvious that, if that is so, injury, and very grave injury, will be done to the petitioners. They will by reason of an act of the Court have paid a sum which it is now ascertained was ordered to be paid by mistake and wrongfully. They will recover that sum after the lapse of a considerable time, but they will recover it without the ordinary fruits which are derived from the enjoyment of money. On the other hand, those fruits will have been enjoyed, or may have been enjoyed, by the person who by mistake and by wrong obtained possession of the money under a judgment which has been reversed. So far, therefore, as principle is concerned, their Lordships have no doubt or hesitation in saying that injustice will be done to the petitioners, and that the perfect judicial determination which it must be the object of all Courts to arrive at, will not have been arrived at unless the persons who have had their money improperly taken from them have the money restored to them, with interest, during the time that the money has been withheld'.

The above passage does not seem to support the learned Judge's view. It only indicates the contrary.

8. With great respect, we are unable to accept the view expressed by the two learned Judges of the Allahabad High Court, and our learned brother in the two decisions (Sic) referred to above. The right of a party, who has been wronged by an erroneous decision consequent on its variation or reversal, is governed by the statutory provision contained in Section 144 of the Civil Procedure Code. There is no scope to bring into it conceptions of 'justice, equity and good conscience', which are bound to vary from Judge to Judge. Section 144 Civil P. C. provides as follows :--

'144. (1) Where and 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; 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) No suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by application under Sub-section (1)'.

It is clear from the above provision that what an aggrieved party is entitled to get by way of restitution or otherwise is that which would place the parties, so far as may be, in the position, which they would have occupied but for the decree, which was varied or reversed. In the case of a defendant, who has been deprived of his property in execution of a decree, which the plaintiff should not have got, the least that would do justice is to restore to him the property with mesne profits. It is the duty of the Court to do justice to a party who has been wronged by its decision. We fail to see how the fact that the plaintiff deposited money in accordance with his action, which he should not have instituted, would affect the position of such a defendant. We also fail to see any logic in the reasoning that a defendant, who never wanted the plaintiff's money and who rightly contested that the plaintiff had no right to file this suit, should have drawn the money from Court and mitigated the loss of the plaintiff. This could have been possible, only if the defendant drew the money, and invested it profitably. The more proper thing would have been for the plaintiff not to file the action, and if he does so, not to deposit the money and take delivery of the defendant's property, until the decree became final. If he elects to execute a decree pending in appeal, he takes the risk of the decree being reversed; and if the decree is reversed, he must restore to the defendant the benefits which the plaintiff received under the reversed decree. This is plainly, what Section 144, Civil P. C. requires.

9. A Division Bench of this Court had occasion to deal with the scope of the provision in Central Bank of India Ltd. v. Chattanath Karayalar, 1966 Ker LJ 197 = (AIR 1966 Ker 225). There is a very elaborate discussion of the matter in this decision; which fully supports our view. In Bhagwant Singh v. Sri Kishen Das, AIR 1953 SC 136, dealing with the principles underlying Section 144 C. P. C. The Supreme Court said; '...... the principle of the doctrine of restitution is that 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'. We, therefore, hold that the appellant's claim that, when assessing his liability for mesne profits, he should be given credit for interest on the amount deposited by him in Court along with the filing of this suit, is untenable.

10. In the result, we dismiss this appeal with costs. We make it clear that the amount, if any, deposited by the appellant towards his liability for mesne profits, or made available for being drawn towards the said liability, should be credited towards the said liability as determined by the Court below, on the dates on which notice of such deposit or of the fact that any such amount was so available to the respondents, was given to them by the appellant. In other respects, the order of the lower Court is confirmed.