Restitution under Civil Procedure Code

The expression “restitution” has not been defined in the Code, but it is “an act of restoring a
thing to its proper owner”. It means restoring of anything unjustly taken from another.

Section 144. 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 ant restitution or other relief which could be
obtained by application under sub-section (1).

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 an unjust benefit of the erroneous decree to make
restitution to the other party for what he has lost. The obligation arises automatically on the reverasal
or modification of the decree and necessarily carries with it the right to restitution of all that has been
done under the erroneous decree; and the court in making the restitution is bound to restore the parties,
so far as they can be restored, to the same position they were in at the tim when the court by its erroneous
action had displaced them from.

Section 144 does not confer any new substantive right. It merely regulates the power of the court in that
behalf. It is the bounden duty of courts 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. Similarly, on the reversal
of a judgment the law places an obligation on the party who received the benefit of the erroneous
judgment to make restitution to the other party for what he has lost and it is the duty of the court to
enforce the obligation; unless it is shown that restitution would be clearly contrary to the real justice of
the case.

Kavita Trehan vs. Balsara Hygiene Products Ltd., court observed that the jurisdiction to make
restitution is inherent in every court and can be exercised whenever justice of the case demands.

ILLUTRATIONS

1. A obtains a decree against B for possession of immovable property and in execution of the
decree obtains possession thereof. The decree is subsequently reversed in appeal. B is entitled
under this section to restitution of the property, even though there is no direction for restitution
in the decree of the appellate court.
2. A obtains a decree against B for Rs 5000, and recovers the amount in execution. The decree is
subsequently reversed in appeal. B is entitled under this section to a refund of the amount
 together with the interest up to the date of repayment, though the appellate decree may be silent
as to interest.

OBJECT

The doctrine of restitution is based upon the well-known maxim “actus curiae neminem gravabit”, i.e.
the act of court shall harm no one. The doctrine of restitution is based on equitable principles. In
proceedings for restitution the court should pass an order consistent with justice to both the parties.

Throwing light on the importance of this doctrine, the Supreme Court in South Eastern Coal
Fields Limited v. State of M.P. said-

“Litigation may turn into a fruitful industry. Though litigation is not gambling yet there is an
element of chance in any litigation. Unscrupulous litigants may feel encouraged to approach
the courts, persuading the court to pass interlocutory orders favourable to them by making out
a prima facie case when the issues are yet to be heard and determined on merits and if the
concept of restitution is excluded from application to interim orders, then the litigant would
stand to gain by swallowing the benefits yielding out of the interim order even though the
battle has been lost at the end. This cannot be countenanced."

CONDITIONS

Before restitution can be ordered in der this section, the following three conditions must be
satisfied:

1. The restitution sought must be in respect of the decree or oreder which had been
reversed or varied;
2. The party applying for restitution must be entitled to benefit under the reversing decree
or order;
3. The relief claimed must be properly consequential on the reversal or variation of the
decree or order.

WHO MAY APPLY?

1. He must be a party to the decree or order varied or reversed.

2. He must have become entitled to any benefit by way of restitution or otherwise
under the reversing decree or order.

WHO MAY GRANT RESTITUTION?

An application for restitution lies to the court which has passes the decree or made the order.
(Read Explanation it defines the expression “Court”)

BAR OF SUIT

Sub-section (2) of Section 144 provides in express terms that where restitution could be
claimed by an application under this section, no separate suit shall be brought for such relief.

APPEAL
The determination of a question under Section 144 has been expressly declared to be a “decree”
under Section 2 (2) of the Code and is, therefore, appelable.