The principle embodied in the doctrine is that on the reversal of a decree in appeal the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he had lost. [Dorasami v. Aannsami, (1900) 23 Mad.
306, 311]. The loss sustained must be properly consequential and includes cost and interest, damages, compensation and mesne profits. Section 144 of the Code, which deals with restitution, reads: “Where and in so far 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 purposes, the court which passed the decree or order shall, on the application of any party entitled to any benefit by way or restitution or otherwise, cause such restitution to be made as well, 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 interests, damages, compensation and mesne profits which are properly consequential on such variation, reversal, setting aside or modification of the decree or order.
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 S.
144, would have jurisdiction to try such suit. [S. 144 (1)].
No suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by application under sub-section (1).” [S. 144 (2)].
The following conditions are, therefore, necessary for the application of restitution: 1. The restitution sought must be in respect of the decree or order which had been varied or reversed; 2. The party applying for restitution must be entitled to a benefit under a reversing decree or order; and 3. The relief claimed must be properly consequential on such variation or reversal of the decree or order.
A obtains a decree against B for possession of immovable property and in execution of the decree obtains possession of the property. The decree is subsequently reversed in appeal. B is entitled on an application under this section to restitution of the property, though three may be no direction for restitution in the decree of the appellate court, together with mesne profits for the period during which a remained in possession.
Sub -section (2) of Section 144 further provides that “no suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by application under sub-section (1)” quoted above. [S. 141 (2)].
Restitution conceived in the light of 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. The granting of restitution under S. 144, C.P.C.
, should be consistent with justice to both the parties. Where a sum of money is deposited in court to answer a decree but a restriction is placed to the unconditional withdrawal of the same in terms of the decree, by reason of which the decree holder is either unable or unwilling to obtain the use of the money, in such a case it cannot be taken as an invariable rule that the decree-holder should pay interest on the amount lying in the court on the reversal of the trial court’s decree in appeal. (Pappu Reddiar v. P.S.V.
Rm. Ramnatha Iyar, A.I.R. 1963 Mad.
45). The decision granting or refusing restitution is a decree within the meaning of Section 2 (2) and as such is appealable.