Kadirvelu Chettiar v. Kempu Chettiar

1. The point to which Mr. Rangaswami Aiyangar has directed a very interesting and careful argument does not appear to have been decided in any reported case. It can be very simply stated. On the 20th September, 1933, there was a decree in favour of the present petitioner against respondents 1 to 3 in this petition for Rs. 320-7-0. The respondents (the defendants in the suit) preferred a Civil Revision Petition early in 1934. It is numbered, I am told, 92 of 1934, and So it must obviously have been very early in the year. On the 31st of March, 1934, the decree-holder transferred his decree. On the 20th of September, 1934, the transferee decree-holder was recognised by Court. On the 6th of May, 1936, the Civil Revision Petition was heard and decided. The decree of the 20th September, 1933, was set aside and a re-trial was ordered. Before the Civil Revision Petition was decided, the transferee decree-holder had realised the amount of the decree from the judgment-debtors, the present respondents 1 to 3. On the re-hearing, only Rs. 75 with proportionate costs was decreed. The present respondents 1 to 3 then applied under Section 144 of the Code of Civil Procedure for the recovery of the amount paid by them to the transferee decree-holder and they made as respondents to that application both the original decree-holder and the transferee. It was mentioned to me that the transferee decree-holder was not made a party to the Civil Revision Petition which resulted in the re-hearing. It is against the order of the learned Subordinate Judge on the application for Restitution that this Civil Revision Petition comes before me.

2. The learned Judge took the view that when a decree-holder, after having obtained a decree, assigns it to a third party, he is presumed to have the benefit of the decree and, when the third party to whom he has assigned the decree realized the amount from the defendant, the right to claim restitution as against the original decree-holder arises. He therefore made an order for restitution against both the original decree-holder and the transferee decree-holder for an amount which may be said to represent the original decree after deducting the amount of the second decree and making allowances for costs and interest. Mr. Rangaswami Aiyangar has argued that that order is an illegal order and that the only person against whom restitution can be made is the transferee decree-holder and not the original decree-holder. Section 144, which has been frequently discussed in cases, is worded in the most comprehensive terms, and I think the result of the cases is that it should be widely construed. Its object is to put right what was originally an error of the Court and to restore the parties to the position they would have occupied. It is argued that, after the transfer has been made, the original decree-holder ceased to be a party. In my view, that position is covered exactly by Section 144. In the decision reported in Govindappa v. Hanumanthappa (1912) 23 M.L.J. 513 : I.L.R. 38 Mad. 36, the more difficult position, as to whether the transferee decree-holder can be made the subject of an order under Section 144 has been decided and decided against the transferee decree-holder. It seems to me that the case before me is precisely covered by Section 144 and that the word 'party' should be given a wide meaning, because it is clear that it is not confined only to the original parties to the suit, but applies also to persons who would become subsequently concerned. That, I think, may be derived from the observations in two cases. The first is in Doraisami Aiyar v. Annasdmi Aiyar (1900) 10 M.L.J. 307 : I.L.R. 23 Mad. 306. At p. 310, Subrahmania Aiyar, J" states:

The principle of the doctrine of restitution is that on the reversal of a judgment the law raises an obligation in the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost...That 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.

3. Now the present party, the original' plaintiff, unquestionably received the benefit from the erroneous judgment because he was able to sell his decree to the transferee decree-holder. In the Allahabad case Brij Lal v. Damoddr Das (1922) I.L.R. 44 All. 555 at 560 Walsh, J. after reiterating that Section 144 is very wide in its terms, says that the word 'party' is not used in that section in the sense 'party to the suit', the expression ordinarily found in other parts of the Code, but must mean 'party to the application'. I think that what the learned Judge intends is that it is not confined to the expression 'party to the suit' but may include any other persons who are parties to the application. In my view, the fact that a party to a suit who has obtained a decree wrongly against another person prefers to get the immediate benefit of it by a sale, that is to say, a transfer, rather than waiting to execute against the party, in no way affects the rights of the original party to recover in restitution what he has paid over under pressure of the original erroneous decree. The fact that he has paid it over to a nominee of the original plaintiff seems to me wholly irrelevant to his right to recover against the person who caused him to make that payment, namely, the original plaintiff. I think that any other view might open the door to fraudulent transfers to men of straw and might defeat the very object of Section 144. I think the order of the lower Court was a proper order and I do not propose to interfere with it in any way although it was at one time suggested that the order might be varied by directing that the remedy should be first exhausted against the transferee decree-holder. That, however, is not a matter for consideration in revision. This petition will be therefore dismissed with costs of the fourth respondent.

4. I should like to add, and counsel agree, that the references in Govindappa v. Hanumanthappa (1912) 23 M.L.J. 513 : I.L.R. 38 Mad. 36, to Tangi Joghi v Hall (1899) I.L.R. 23 Mad. 203 are evidently printing errors and that throughout that case the references were, intended to be to the case of Doraisami Aiyar v. Annasami Aiyar (1900) 10 M.L.J. 307 : I.L.R. 23 Mad. 306 reported in the same volume at p. 306.