Ramachandra Iyer, C.J.-

The decision in Shanmugasundara Mudaliar v. Ratnavelu Mudaliar1 cannot be completely reconciled with the principles underlying two later decisions of this Court in Sitaramayya v. Venkanna2 and Periakaruppan Chettiar v. Veerappa Chettiar3.

Post this appeal before a Full Bench.

In pursuance of the above order the appeal came on for hearing before the Full Bench (Ramachandra Iyer, C. J., Ramakrishnan and Kunhamed Kutti,JJ.)

The Judgment of the Court was delivered by

Ramachandra Iyer, C.J.- This appeal arises from the judgment of Ganapatia Pillai, J. and involves the determination of a question relating to award of interest while directing restitution. Muthuswami Reddiar, since deceased, whose estate is now represented by the appellant, had certain monetary dealings with the respondent, in respect of which he filed a suit and obtained a decree in the Sub-Court at Tirunelveli for a sum of Rs.10,643-12-0 towards principal and interest and Rs.1,473-10-0 as and for costs. Against that decree the respondent filed an appeal to this Court, A.S. No. 121 of 1951. Along with the appeal he filed an application for stay of execution of the decree. By order, dated 9th April, 1951, this Court granted conditional relief by directing stay of execution of the trial Court’s decree, if the respondent were to deposit the entire amount in the lower Court within a specified time. It was also provided that the decree-holder could draw the amount deposited on furnishing sufficient security for repayment in case the appeal in this Court should succeed. There was however no restriction regarding the decree for costs which was paid over. In due compliance of the order of this Court, the respondent deposited the balance of the decree amount in the trial Court. The decree-holder did not draw that among by furnishing security therefor, with the result that the amount deposited continued to remain with the Court. he had lost.. The Court possesses the power, a power which is both inherent and statutory to enforce that obligation. But the mere restoration of what a party lost under a decree or order which is later set aside might not secure to him complete justice. Restitution properly so called is restoration to the original state which would include reparation for the injury done. Section 144, Civil Procedure Code, recognises this when it says that for the purpose of placing the parties in the position which they would have occupied but for the decree that had been set aside, the Court would have powers to direct payment of interest, damages, mesne profits, etc. Essentially therefore restitution is doing justice between the two parties. It will be appropriate in this context to refer to the following passage in the judgment of Subrahmanya Iyer, J. in Doraiswami Iyer v. Annaswami Iyer1.

“The principle of the doctrine of restitution is that on the reversal of a judgment, the law raises an obligation in the party who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost. This obligation, it is the duty of the Courts to enforce unless it is shown that restitution would be clearly contrary to the real justice of the case.”

The principle has been laid down in the same terms by the Supreme Court in Bhagwant Singh v. Sri Krishna Das2. Restitution conceived in that light namely doing justice between the parties, will necessarily have to depend on the facts and circumstances of each case and cannot be reduced to the form of an inflexible rule that Courts should have regard only to the detriment suffered by one party and not to the position of the other. Indeed in the very statement of the principle above there is a correlation of the injury to the benefit secured under the erroneous judgment. Where a decree has been executed according to its terms, there will be really no scope for any distinction between the decree-holder getting the benefit and the other party suffering an injury, for the latter is

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