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1964 Supreme(AP) 156
Andhra Pradesh High Court
Judges : VENKATESAM
State Of A.P. - Appellant
Versus
Govinda Raja Rice Mill Contractors Co., Chebrolu - Respondent
Decided On : 08-06-64
A party is not liable to pay interest on an amount deposited in court as restitution if that party was prevented from withdrawing the amount by reason of a condition imposed by the court.
Headnote:
RESTITUTION - INTEREST - DECREE AMOUNT DEPOSITED IN COURT - WITHDRAWAL PREVENTED BY CONDITION OF FURNISHING SECURITY - LIABILITY TO PAY INTEREST - SECTION 144, CIVIL PROCEDURE CODE.
Fact of the Case:
In two suits filed by rice millers against the Government, the trial court granted decrees in their favor. On appeal, the High Court reversed the decrees and dismissed the suits. The Government filed execution petitions for restitution, claiming interest on the amounts decreed and costs from the date of deposit till the date of repayment. The trial court awarded interest only up to the date of the High Court's judgment.
Finding of the Court:
The court held that the Government was entitled to interest on the costs withdrawn from the date of withdrawal till the date of re-deposit or payment, but not on the decretal amount that was not withdrawn. The court reasoned that the inability of the plaintiffs to withdraw the decretal amount was due to the condition imposed by the court that they furnish security, which they were unable to do. Therefore, the Government could not be said to have derived any benefit from the deposit of the decretal amount, and thus was not entitled to interest on it.
Issues: 1. Whether the claim for restitution can be awarded only when the party against whom it is demanded had the benefit of the decree which was reversed? 2. Whether the party against whom the restitution is claimed is prevented from withdrawing the amount deposited by reason of the condition that the amount can be withdrawn only on furnishing security for the party is unable to furnish security he could nevertheless be made liable to pay interest? 3. Whether it is necessary for the party claiming restitution to prove that the amount claimed as restitution represents the losses it actually suffered?
Ratio Decidendi: 1. The principle of restitution is that the party against whom restitution is claimed must have the benefit of the decree which is reversed. 2. If the party against whom restitution is claimed is prevented from withdrawing the amount deposited by reason of a condition imposed by the court, that party is not liable to pay interest on the amount. 3. It is not necessary for the party claiming restitution to prove that the amount claimed as restitution represents the losses it actually suffered.
Final Decision: The court modified the trial court's order and held that the Government was entitled to interest on the costs withdrawn from the date of withdrawal till the date of re-deposit or payment, but not on the decretal amount that was not withdrawn.
( 1 ) C. M. As. 48 and 72 of 1962 are appeal and a cross appeal. Both of them arise out of a common order of the learned Subordinate Judge, Eluru in E. A. 287 of 1961 in O. S. 28 of 1951. The facts necessary for a proper appreciation of the contentions of the parties will now be stated.
( 2 ) THESE two C. M. As. 48 and 72 of 1962 arise out of E. A. 287 of 1961 in O. S. 28 of 1951, while C. M. As. 93 and 104 of 1962 arise out of E. A. 219 of 1961 in O. S. 13 of 1952 on the file of the Subordinate Judges Court, Eluru. These suits viz. , O. S. 28 of 1951 were two of the batch of suits files against the Government by the rice millers in the Districts of East and West Godavari and Krishna who were authorised to procure paddy and rice from the producers and to sell them in the market at the price fixed by the Government. The difference between the price at which they were purchased and the price at which they were directed to be sold was asked to be made over to the Government. Several millers made over the difference in compliance with the orders of the Government, and later filed suits for the recovery of those amounts on the ground that they were entitled to the difference in price, but mot the Government.
( 3 ) THE trial Court in all those suits granted decrees, but on appeal a Bench of this Court consisting of Chandra Reddy, Officiating Chief Justice, as he then was, and Srinivasachari J. reversed the said decrees in State of Madras (Now Andhra Pradesh ) v. Jayalakshmi Rice Mill, (1959) 1. Andh WR 44 : (AIR 1959 Andh Pra 352) and dismissed the suits on 8/03/1958.
( 4 ) AGAINST the decree in O. S. 28 of 1951 , the state preferred A. S. 34 of and also filed an application, C. M. P. No 4154 of 1953 on the file of the Madras High Court for stay of execution. Somasundaram, J. , in his order dated 28-4-1953 granted an unconditional stay with regard to the realisation of the amount decreed, but directed that there shall be no stay as to costs. The state deposited the costs amounting to Rs. 3113-13-0 on 13-6-1953 and that amount was withdrawn by the plaintiff on 5-7-1953.
( 5 ) AGAINST the order in C. M. P. No. 4154 of 9153, L. P. A. No. 126 of 1953 was preferred and it was disposed of by a Bench of the Andhra High Court at Guntur consisting of Subba Rao, C. J. as he then was, and Krishna Rao, C. J. as he then was, and Krishna Rao, J. on 21-2-1953. By that judgment the Bench modified the order of Somasundaram J. and directed the Government to deposit the decretal amount within six weeks, and the same could be withdrawn by the plaintiff or furnishing security. Pursuant to that order, the State deposited towards the amount decreed the sum of Rs. 23,527-8-1 on 2-4-1955, and Rupees 11,023-3-0 on 4-4-1955, in all amounting to Rs. 34,550-11-1. As the plaintiff was unable to furnish security for those amounts they were allowed to lie in Court.
( 6 ) AS already stated the appeal against the decree in O. S. 28 of 1951 was allowed by this Court and the suit was dismissed on 8-3-1958. Pursuant to the decree of the High Court , on 6-3-1961, the state filed an execution petition No. 287 of 1961 for restitution, and claimed not only the amounts deposited as and towards the amount decreed and the costs, but also interest at 6 per cent on those amounts from the date of deposit till the date of repayment. Since the amount decreed was not withdrawn by the costs which he had withdrawn He had not deposited the interest on both the sums.
( 7 ) THE learned Subordinate Judge by his order dated 29-9-1961 awarded interest on the various sums representing costs as well as the amounts decreed but only upto the date of the disposal of the appeal on 18-3-1958 in the High Court. He observed that nothing prevented the state from withdrawing the amounts in deposit and granted restitution only to that extent.
( 8 ) AGGRIEVED by this order, the State preferred C. M. A. 48 of 1962 contending that it was entitled to interest on costs not simply upto the d
