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of <h1>Court rules no restitution as interest rate reduction in decree did not cause prejudice. Lower courts erred.</h1> <h3>Puni Devi Sahu and Ors. Versus Jagannath Mohapatra</h3> The court held that although the reduction of the interest rate technically varied the decree, it did not entitle the defendant to restitution as no ... - Issues Involved:1. Applicability of Section 144, C.P.C. for restitution.2. Whether the decree was 'varied or reversed' under Section 144, C.P.C.3. Allegation of fraud in the execution of the sale.Issue-Wise Detailed Analysis:1. Applicability of Section 144, C.P.C. for Restitution:The core issue in this appeal is whether the decree of the trial Judge in T.S. No. 26/67, which was modified in Second Appeal No. 54/75 by reducing the interest rate from 12% to 6%, can be considered a 'varied or reversed' decree under Section 144, C.P.C., thus entitling the court to entertain an application for restitution. Section 144, C.P.C. mandates that if a decree or order is varied or reversed, the court must, on application, cause restitution to be made to place the parties in the position they would have occupied but for such decree or order.2. Whether the Decree was 'Varied or Reversed' under Section 144, C.P.C.:The judgment elaborates that the term 'varied or reversed' is crucial to determine the applicability of Section 144, C.P.C. The dictionary meaning of 'vary' includes making different, modifying, or altering while preserving identity. The court observed that reducing the interest rate from 12% to 6% technically amounts to a variance of the decree. However, the court emphasized that merely proving a variance is insufficient for restitution; the party must show that they suffered a loss due to the erroneous terms of the original decree.The court cited several precedents, including AIR 1932 Cal 303 and AIR 1948 Mad 12, to illustrate that restitution is warranted only if the party applying for it can demonstrate that the original decree caused prejudice that was rectified by the appellate decree. The court concluded that the reduction in the interest rate did not cause any prejudice to the defendant that would necessitate restitution.3. Allegation of Fraud in the Execution of the Sale:The trial court had found that the plaintiffs suppressed the valuation notice and committed fraud in getting the house sold for Rs. 4200/-, which was prejudicial to the defendant's interest. However, the appellate court dismissed the appeal and confirmed the trial court's findings. The present appeal contends that there was no material evidence to establish fraud and that the courts below erred in their conclusion.The court highlighted that restitution under Section 144, C.P.C. is based on equitable principles and cannot be applied where it conflicts with another rule of equity. The court reiterated that the party applying for restitution must base their claim on the rights existing at the time of dispossession under the decree subsequently varied or reversed.Conclusion:The court concluded that the reduction of the interest rate from 12% to 6% did technically vary the decree, but this did not entitle the defendant to restitution as no prejudice was caused by the original decree. The court found that the lower courts erred in granting restitution based solely on the variance of the decree without considering the lack of prejudice. Consequently, the judgments and decrees of the two lower courts were set aside, and the second appeal was allowed, with no order as to costs.
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