TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appeal Success: Reduced Payment, Restitution Granted, Interest Explained</h1> <h3>Pappu Reddiar Versus P.S.V. Rm. Ramanatha Iyer</h3> Pappu Reddiar Versus P.S.V. Rm. Ramanatha Iyer - TMI Issues Involved:1. Determination of a question relating to the award of interest while directing restitution.2. Obligation of the decree-holder to pay interest on the amount deposited in court.3. Principles underlying the granting of restitution.4. Conditions under which interest is payable as part of restitution.Issue-Wise Detailed Analysis:1. Determination of a Question Relating to the Award of Interest While Directing Restitution:The appeal arises from the judgment of Ganapatia Pillai, J., involving the determination of a question relating to the award of interest while directing restitution. The respondent succeeded in the appeal to a large extent, reducing the payable amount and becoming entitled to restitution. The respondent's application for restitution included claims for excess costs and interest on the amount deposited in court. The lower court directed the appellant to pay back the excess amount of costs only, disallowing the interest claim. Ganapatia Pillai, J. allowed the appeal, holding that the court's concern in granting restitution is to repair the injury done to the party suffering detriment due to the erroneous order, irrespective of whether the other party secured an advantage.2. Obligation of the Decree-Holder to Pay Interest on the Amount Deposited in Court:The correctness of the view that a party to an erroneous money decree who had to deposit money into court would be entitled to collect interest from the other party, although the latter might not have used the money, was challenged. The court emphasized that the principle of restitution is to ensure no party suffers due to an erroneous act by the court. The obligation to make restitution involves not just restoring what was lost but also reparation for the injury done. Section 144, C.P.C., recognizes the court's power to direct payment of interest, damages, mesne profits, etc., to place the parties in the position they would have occupied but for the erroneous decree.3. Principles Underlying the Granting of Restitution:Restitution aims to do justice between the parties, depending on the facts and circumstances of each case. The principle is that on reversing a judgment, the law obliges the party who received the benefit of the erroneous judgment to make restitution to the other party. The court's power to enforce this obligation is both inherent and statutory. The principle has been laid down by the Supreme Court in Bhagwant Singh v. Sri Kishendas, emphasizing that restitution should be consistent with justice to both parties.4. Conditions Under Which Interest is Payable as Part of Restitution:The court discussed various scenarios where interest might be payable as part of restitution:- If money is paid under an erroneous decree to the decree-holder, interest is payable.- If money is deposited in court without restrictions, interest is payable.- If money is deposited with a condition like furnishing security, and the decree-holder withdraws the amount after furnishing security, interest is payable from the date the obstacle is removed.- If money is deposited with a condition like furnishing security, and the decree-holder does not withdraw the amount, normally interest is not payable unless exceptional circumstances justify it.The court concluded that the decree-holder should not be compelled to pay interest on money not available to him due to conditions imposed as to its withdrawal. However, there may be exceptional cases where the court might direct the decree-holder to pay interest despite not withdrawing the money. The court should pass an order consistent with justice to both parties, considering all circumstances.Judgment:The appeal is allowed, and there will be no order as to costs either before the court or the learned judge. The court disagreed with the inflexible rule laid down in previous cases that a party who succeeded in obtaining a money decree subsequently set aside would be bound to pay interest as part of restitution, regardless of circumstances.
TaxTMI 
TaxTMI 
