MRS. KAVITA TREHAN AND ANR.versusBALSARA HYGIENE PRODUCTS LTD.

                                                   '
A                   MRS. KAVITA TREHAN AND ANR.
                                 v.
                   BALSARA HYGIENE PRODUCTS LTD.

                                 JULY 11, 1994

B        [M.N. VENKATACHALIAH, C.J. AND S.C. AGRAWAL, J.]

         Cod~ of Civil Procedure, 1908 : Section 144-Restitutionary jurisdic-
    tion-Not exhaustiv,,_Scope explained.

C         The appellants who are the clearing and forwarding agents for the
    respondent's products instituted a suit in the Court or Senior Sub-Judge
    seeking a declaration or their lien over the goods or the respondent lying
    with them. Simultaneously, the appellants sought an ex-parte injunction
    "hich was granted by the Trial Court-and subsequently made absolute. In
    the meanwhile the appellants sold away bulk or the goods worth Rs. 32.4
D   lakhs under !he authority of the ex-parte interim order. The suit was, at
    the instance of the respondent, subsequently transferred to the High Court
    by an order of this Court.

          The High Court dismissed the suit on the undisputed ground that it
E was hit by ~~ction 69(2) of the Indian Partnership Act, 1932.
          The High Court also directed the appellants to rurnish security for·
    the sum of Rs. 25.4 lakhs in substitution of the goods sold away while
    declining the payment or the sale proceeds to the respondent. Aggrieved
    by the High Court's judgment, the appellants preforred the present appeal.

F       On behalf of the appellants, it was contended that High Court erred
  about the scope and nature of restitutionary jurisdiction; that Section 144
  C.P.C. did not in terms apply; that the powers under Section 151 C.P.C.
  could not be exercised; and that the appeal against the order confirming
  injunction having been withdrawn the matter assumed finality and could
G not be re-agitated in any subsequent proceedings.

         On behalf of the respondent, it was contended that since the goods
    were converted into money the High Court quite appropriately directed
    furnishment of security.

H         Dismissing the appeal, this Court
                                       340
              KA VITA (MRS.) v. BALSARA HYGIENE LTD.                    341

      HELD : 1. The law of Restitution encompasses all claims founded          A
upon the principle of unjust enrichment. Section 144 C.P.C. incorporates
only a part of the general law of restitution. It is not exhaustive.
                                                              [350-B, 351-G]
      Binayk Swain v. Ramesh Chandra Panigrahi & Anr., [1966] 3 SCR 24;
Gangadhar & Ors. v. Raghubar Dayal & Ors., AIR (1975) All. 102 F.B.; State     B
Govt. of Andhra Pradesh v. Mis Manickchand Jeevraj & Co., Bombay, AIR
(1973) A.P. 27, relied on.

       Allexander Rozer Charles Camie v. The Acomptoir D' Escompte De
Paris, (1869-71) 3 AC 465; Jai Berham v. Kedar Nath Marwari & Ors., AIR
(1922) P.C. 269; Law of Restitution Golf & Jones, 4th Edn. Page 31 and         C
Halsbury's Laws of England, 4th Edn. p. 434, referred to.

      2. The jurisdiction to make restitution is inherent in every court and
will be exercised whenever the justice of the case demands. It will be
exercised under inherent powers where the case did not strictly fall within    D
the ambit terms of Section 144 CPC. The instant case may not strictly fall
within the terms of Section 144 CPC; but the aggrieved party in such a
case can appeal to the larger and general powers of restitution inherent in
every court. [352-A-B, 351-H)

      Sakamma v. Eregowda, [1974) 2 KLJ 357, held inapplicable.                E
      3. That an appeal filed against the interlocutory order was withdrawn
does not make any difference. Upon dismissal of the suit the interlocutory
order stood set-aside and that whatever was done to upset the status-quo,
was required to he undone to the extent possible. This the High Court did
by directing furnishment of security to the extent of the value of the goods   F
sold away under the cover of the interlocutory order. [352-E-F)

      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1581-82
of 1993.

      From the Judgment and Order dated 29.1.92 of the D·elhi High Court       G
in R.F.A. (OS) No. 36 of 1991.

      Ashok Grover for the Appellants.

      Harish N. Salve, Sunil Jain, Vijay Hansaria for M/s Jain Hansaria &
Co. for the Respondent.                                                        H
    342                   SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A         The Judgment of the Court was delivered by


          VENJ.<ATACHALIAH, CJ. Civil Appeal No. 1581 of 1993 arises out
    of and is directed against the appellate judgment of the Division Bench
    dated 29th January, 1992 of the High Court of Delhi dismissing RFS [OS]
B   No. 36/91 preferred by the present appellants and affirming the judgment
    and decree dated 28th May, 1991 of the learned Single Judge dismissing
    the appellants' Original Suit No. 39/90. There was a further order by the
    Division Bench which declined to entertain fresh and further arguments in
    the appeal which were sought by the present appellants'by means of C.M.
C   No. 3209/92. That order is assailed in Civil Appeal N.o. 1582 of 1993. The
    appeals raise a short and interesting question as to the scope of restitution-
    ary jurisdiction of the courts. ·


          2. On 27th March, 1989, the appellants instituted Civil Suit No.
D 74/1989 in the Court of Senior Sub-Judge, Chandigarh. Simultaneously,
    appellants sought an injunction under Rules 1 and 2, Order 39 CP.C. The
    averments in the plaint were that the plaintiff-appellant "M/s. Subhagya
    Agencies" was a firm of partners and had been appointed• by the respon-
    dent --- Mis Balsara Hygiene Products Ltd. --- as the latter's clearing and
    forwarding agents for the respondent's products, such as,· tooth- pastes,
E tooth-powder, tooth-brushes, mosquito-repellents, cleaning po\vd.,rs, toilet
    fresheners etc. under terms of an agreement said to be executed on 1st
  . April, 1985 stipulating a commission at the rate of 1.5% upto a turnover
    of Rs. 2 crores and 1% in respect of turnover in excess thereof. Appellants
    further pleaded that there were, allegedly, certain renewals, revisions and
F updating of these arrangements from time to time whereunder large sums
    by way of commission fell due and remained unpaid. It was also alleged
    that the purported termination of the arrangements by the respondent
    under letter dated 15th February, 1989 was invalid. On these and other
    allegations the appellants sought a declaration of the appellants' lien to the
    extent of Rs. 15,80,861.85 over the goods of the respondent lying with the
G appellants; for a further declaration that the purported termination. Was
    illegal and that the respondent ~~y be restrained from interfering' in the
    appellants' alleged 1 rijhl/to dispos~ of the stocks. The Je~in~d Sub-Judge,   ,.
    !st Class, Chandigarh;before whom the suit was instituted and a temporary. ~.{/
    injunction in terms of the above reliefs' sought was persuaded to grant an
H ex-parte injunction in terms following:              '
     KAVITA(MRS.)v. BALSARA HYGIENE LID. [VENKATACHALIAH,J.]             343

             "....... the defendants are restrained from interfering in the dis- A
        posal of the stock in question otherwise than in due course of law
        till further orders. In the meanwhile notices of the suit as well as
        application U /0 39 rules 1 and 2 CPC be issued to the defendant
        in filing of PF for 8.5.89. Compliance of Order 39 rule 3 CPC be
        also made by the plaintiff."                                             B

      3. Respondents moved to have this ex-parte interim order vacated.
Upon hearing both the parties, the learned Sub-Judge, !st Class, Chan-
digarh, by his order dated 29th April, 1989 made the interim order ab-
solute. In the meanwhile, the appellants had sold away bulk of the stocks
under the authority of the ex-parte interim order dated 27.3.1989. Though       C
the goods worth Rs.32.4 lakhs were admittedly sold away, Sri Prem Nath
Trehan, the husband of Smt. Kavita Trehan who brought the suit, claimed
that he had recovered only Rs. 23 lakhs by way of sale proceeds. The
learned Sub-Judge, !st Class, Chandigarh, directed furnishment of a 'bond'
in the sum of Rs. 16 lakhs by the appellants. The suit was, at the instance     D
of the respondent, subsequently transferred to the original side of the Delhi
High Court by an order of the Supreme Court by its order dated 20th
November, 1989.

       It was admitted by the appellants --- this is borne out by the state-
ment of Sri Prem Nath Trehan who was examined under Rule 2 Order 10             E
C.P.C. that appellants had in their possession respondent's goods to the
extent of about Rs. 36 lakhs --- that under cover of the interim injunction
granted in the suit, the appellants had sold goods to the extent of Rs. 32.40
lakhs. Except a sum of Rs. 7 lakhs paid to the respondent under directions
of the court, the balance was retained by the appellants. The suit came to      F
be dismissed on the unclisputed ground that it was hit by sub-section (2)
of Section 69 of the Indian Partnership Act, 1932. Indeed, the appellants
did not dispute the liability of the suit for such dismissal on the ground of
non-registration of the partnership.

       4. The further question that arose before the learned Single Judge of G
the High Court who tried the suit was whether, in view of the fact that
under the directions and orders of the court dated 27th March, 1989 and
29th April, 1989, the appellants had disposed of the goods, the respondent
was entitled to restitution of the stocks or their money-value by way of.
restitution. The learned Single Judge noticed the two questions that arose H
    344                  SUPREME COURT REPORTS [1994} SUPP.1 S.C.R.

A   before him, thus :

            "Two questions arise in this suit. The first one being whether the
            suit is liable to be dismissed in view of Section 69 of the Indian
            Partnership Act, partnership being unregistered on the date of
            filing of the suit and in case the suit is to be dismissed, the second
B           question would be whether the parties are to be relegated to the
            original situation prevailing on March 27, 1989."

          5. On the first question, the learned Single Judge observed :

                '' ... .Insofar as the first point is concerned, Mr. Sahai, learned
c           counsel for the plaintiff fairly conceded that the suit is liable to be
            dismissed as the partnership was not registered on the date of
            institution of the suit. The position in law is that where the suit is
            filed by the partners it shall be taken to be a suit on behalf of the
            firm. In the present case the suit has been filed by the partners of
D           a firm which was not registered on the date of filing·of the suit
            and as such the suit would be hit by the provisions of sub-section
            2 of Section 69 of the Partnership Act."

          The correctness of this view and the consequent disn.iissal of the suit
    are not questioned before us.
E
           6. On the second question, the learned Single Judge noticed that at
    least a sum of Rs. 32,40,000 was the value of the goods which the appellants
    had admittedly sold away. In computing the quantum, the learned Single
    Judge relied upon appellants' own accounts of the stocks held by them at
F   Zirakpur and Chandigarh. On the question of the extent of the stocks sold
    and the quantum of sale proceeds realised, the learned Single Judge
    observed : ·

                 "Before the legal aspect of the matter is thrashed out, it has
             first to be seen as to what extent the goods and stocks of the
G            defendant were in the custody and possession of the plaintiffs at
             the time of passing of the interim order. Fortunately, that evidence
             to some extent is on record. The plaintiffs have filed the accounts
             of Zirakpur and Chandigarh.

H            xxxx                xxxx                    xxxx
     KA VITA (~RS.), .. BALSAR.·\ HYGIENE LTD. [\"El\KATACHALIAH. l.I   345


            Again in the statement of Mr Prem Nath Trehan, General A
        Attorney of M/s. Subhagya Agencies it has been clearly admitted
        that the value of the goods of the defendant which were with them
        were to the tune of Rs. 35 lakhs on the date when the present suit
        was filed. It has heen further stated that they are left with stocks
        worth Rs. 2,64,000. It is also admitted in his statement that though
                                                                              B
        goods worth about Rs. 32.40 bkhs were sold pursuant to the orders
        of the Sub-Judge, no payment as such was made by them to the
        defendant. Mr. Trchan has stated that the value of the goods sold
        was no doubt to the tune of Rs. 32.40 lakhs .......... In \oew of the
        aforesaid accounts of Zirakpur and Chandigarh, and staten1cnt of
        general attorney of the firm there is no manner of doubt that the C
        goods worth Rs. 32.40 lakhs belonging to defendant have been
        admittedly sold by the plaintiffs. For the purpose of this case I
        would proceed on this basis though the figure is disputed by the
        defendant who claim that its goods and stocks in the hands of the
        plaintiffs was more than what is made out by them. Out of the said D
        amount a sum of Rs. 7 lakhs stands paid by the plaintiffs to the
        defendant. Now the question that arises is whether the plaintiffs
        can be directed to pay the remaining sum of Rs. 25.40 lakhs to the
        defendant. If not, what is the other course open to secure the
        interest of the defendant."
                                                                              E
       7. It was urged by the respondent before the High Court that at least
the amount of Rs. 25,40,000 (i.e. Rs. 32,40,000 less Rs. 7,00,000 paid)
should be directed to be said lo the respondent on the ground that the
appellants were merely a clearing and forwarding agent and had no right
to sell the goods and to appropriate the sale proceeds. It was urged that F
the possession was really that of the principal, i.e. the respondent and the
sale proceeds should be directed to be paid over to the respondent by way
of restitution. Learned Single Judge rejected this prayer for payment.
Learned Single Judge noticed that the goods were in the possession of the
appellants and that the limited question that .fell for consideration was
whether the appellants should be directed to furnish sufficient and satis- G
factory security for the value of the goods which the appellants had sold
away pursuant to the interlocutory orders of the learned Sup-Judge, !st
Class, Chandigarh. Accordingly, the learned Single Judge, while dismissing
the suit on the ground of non-registration of the partnershiP,, issued the
following directions :                                                       H
    346                   SUPREME COURT REPORTS (1994] SUPP. l S.C.R.

A              "...... plaintiffs are also directed to take out an FDR from a
            nationalised bank in the sum of Rs. 25.40 lakhs in the name of the
            Registrar of this court for a period of one year in the first instance
            which would be subject to further orders of this court depending
            upon the outcome of the proceedings pending before the court at
            Chandigarh and to the result of a claim, if any, made by the
B           competent court by th!' defendant, if so advised, within the period
            prescribed by law. The FDR will be deposited in this court within
            a period of thirty days. On deposit of the FDR with the Registrar,
            the security bond dated July 18, 1989 furnished by the plaintiffs to
            the tune of Rs.16 lakhs will stand discharged."
c
          9. This order was assailed in appeal before the Division Bench of the
    High Court. The Division Bench by its order dated 29.1.1992 dismissed the
    appellants' appeal observing :

               "The record of the case has been placed before us. After
D           hearing the learned counsel for the parties we are of the view that
            no case for interference with the well considered judgment and
            order dated 28.5.91 of the learned Single Judge is made out."

          10. In these appeals, the appellants assail the correctness of the view
E taken by the High Court in directing them to furnish security for the said
    sum of Rs. 25.40 lakhs in the manner directed. Before we examine ihe
    merits and limitations of the contentions of the appellants, it is necessary
    to refer to the reasoning of the learned Single Judge. The learned Judge
    observed:

F              "It is well settled that a party who has received benefit under
            erroneous order of the court must restore to the other party what
            the latter lost as a result of the said order on the same being
            reversed or set aside. Here in the present case, how far this
            principle applies is to be determined."
G         Then referring to the effect of the dismissal of the suit on the interim
    order, the learned Judge said :

               "......Dismissal of the suit has the effect of automatic dissolution
            of the interim order. But what is the use of' setting aside or
H           reversing a wrong order of the court if a party who has suffered
     KA VITA (MRS.) v. BALSARAHYGIENE LID. [VENKATACHALIAH, J.)               347


        as a consequence thereof remains seething with pain of injustice             A
        even when the order is knocked down ? Healing touch in such a
        case is a must. The stain of injustice must be removed, at least
        bleached if it is not possible to totally eradicate it. In the present
        case, at least the money value of the goods which have been sold
        by the plaintiffs should be secured an.d available in the event of           B
        the plaintiffs failure to establish their· lien in a suit which Mr. Sahai,
        learned counsel for the plaintiffs says has been instituted by them
        in a court at Chandigarh or in any other appropriate proceedings
        which the parties may institute within the time imperative
        prescribed by law.
                                                                                     c
        xxxx                   xxxx                    xxxx

           There is no higher principle for the· guidance of the court than
        the one that no act of courts should harm a litigant and 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          D
        have occupied but for that mistake ..... "

      On the question whether Section 144 in terms applied to the present
case or not, the learned Judge observed :

           11
                But in a case where a party was not in possession but
                .....
                                                                                     E
        nevertheless has suffered the injury and the same would be in fact
        get aggravated, if no remedial measure is taken to set right the
        wrong after setting aside the offending order of the court, the
        aforesaid principles would also operate in such a case, with innova-
        tions depending upon the circumstances of the case as otherwise F
        the court will be a mute helpless spectator after causing injustice
        and prejudice to a party. It will not be justified to say that though
        the interests of a litigant have been harmed by it~ act, it caruiot
        undo the wrong as the sufferer did not have possession of the
        property over which he had undoubted title. May be possession G
        cannot be restored but any other prejudice, harm and suffering
        caused to him which is capable of being removed or at least
        mitigate.cl could be directed to be so removed or mitigated."

      Then the learned Judge proceeded to make the following observa-
tions which have drawn critical comments by the learned counsel for the              H
    348                     SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A   appellants:

                ".... .In any event horizons of law are ever expanding for law
            does not remain static. Precedents are not halting place, if justice
            demands that a party to the litigation should be put in the position
            which he would have occupied but for the wrong order of the court,
B           an obligation is cast on the court to repair the wrong to the extent
            1
            'possible." .

           11. Sri Ashok Grover, ably presenting the case for the appellants,
    urged that the High Court fell into a serious confusion, and the consequen-
C   tial error, about the scope and nature of the restitutionary of jurisdiction
    which, according to the High Court, entitled the respondent to this relief.
    It is implicit in the reasoning of the High Court, says Sri Grover, that
    Section 144 C.P.C. did not in terms apply; but then the High Court seemed
    to rely on the supposed principle underlying Section 144. Sri Grover's
    contention is that in the present case having regard to the fact that no
D   transfer of possession of any property pursuant to any order of the court
    from the respondent to the appellants had taken place, Section 144 C.P.C.
    in terms did not apply and could not be invoked.

          Sri Grover further contended that powers under Section 151, as
E   pointed out by this Court in Padam Sen & Anr. v. Tile State of Uttar
    Pradesh, (1961] 1 SCR 884, could not be exercised when such exercise is,
    in any way, in conflict with what is expressly provided by the Code or
    against the intention of the legislature. The following passage in the said
    pronouncement of the Code was relied upon :

F            ''..... .It is also well recognised that the inherent power is not to be
             ~xercised in a manner which will be contrary to or different from
             the procedure expressly pro,ided in the Code.

                , The question for determination is whether the impugned order
                of the Additional Munsif appointing Sri Raghubir Pershad Com-
G               missioner for seizing the plaintiffs books of account can be said
                to be an order which is passed by the Court in the exercise of its
                inherent powers. The inherent powers saved by s. 151 of the Code
                are with respect to the procedure to be followed by the Court in
                deciding tho cause beiore it. These powers are not powers over
H               the substantive rights which any litigant possesses. Specific powers
     KAVITA (MRS.) v. BALSARAHYGIENELW. {VENKATACHALIAH, J.I              349

         have to be conferred on the Courts for passing such orders which A
         would affect such rights of a party. Such powers cannot come
         within the scope of inherent powers of the Court in the matters of
         procedure, which powers have their source in the Court possessing
         all the essential powers to regulate its practice and procedure."

                                                                      (P.887]
                                                                                 B

       Sri Grover contended that Section 151 can be invoked in aid of a
jurisdiction that manifestly exists and cannot, in itself, be seen as a source
of jurisdiction. No court, counsel says, has any inherent powers to invest
iiself with a jurisdiction not conferred by law. Learned counsel says that       C
Section 151 empowers the court to control the proceedings and not the
parties before it. He further contends that an appeal against the order
dated 29.4.1989 confirming the injunction having been taken to the District
Judge and later withdrawn, the matter which so assumed finality could not
be re-agitated in any subsequent proceedings. The inherent powers, says          D
the counsel, cannot be a substitute for an appeal or revision or review. It
was also urged that with the decision of the High Court that the suit itself
was not maintainable, the court became functus-officio and could not give
any direction of the kind it did.

       12. Sri Barish N. Salve, learned senior counsel for the respondent, E
urged that as, on their own admission, appellants had sold away goods
pursuant to and under the authority of the interim injunction restoration
of the status quo-ante, as nearly as may be possible, is the clear and patent
duty of the court to prevent abuse of process of court and the consequent
miscarriage of justice. He urged that since the goods were converted into F
money, the High Court quite appropriately directed furnishment of security
in substitution of the goods. It was further urged by Sri Salve that in the
instant case the appellants were appointed to act only as clearing and
forwarding agents and that the goods were entrusted to the appellants for
delivery to the buyers specified by the respondent against payment of price G
by cheques drawn in favour of the respondent. Sri Salve stated that the
present case presented the extraordinary spectacle of the s.tle of goods
worth over Rs.33 lakhs being enabled by an ex-pane order in a suit that
ultimately came to be dismissed as not even maintainable. The ex-pane
order of injunction granted by learned Sub-Judge, !st Class, says counsel,
in)proper and such ex-pane order made without circumspection exposes H
    350                  SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A   administration of justice and, particularly, discretionary jurisdiction to
    severe criticism and makes the administration of justice a reproach, and
    that it was unfortunate that the order made by the learned Sub-Judge, Isl
    Class, in this case exposes itself to such criticism.

          13. The Law of Restitution encompasses all claims founded upon the
B principle of unjust enrichment. 'Restitutionary claims are to be found in
    equity as well as at law'. Restitutionary law has many branches. The law of
    quasi-contract is "that part of restitution which stems from the common
    indebitatus counts for money had and received and for money paid, and
    from quantum memit and quantum valebat claims." (See 'The Law of
C   Restitution" - Goff & Jones, 4th Edn. Page 3]. Halsbury's Law of England,
    4th Edu. Page 434 states :

                 "Common Law. Any civilised system of law is bound to provide
             remedies for cases of what has been called unjust enrichment or
             unjust benefit, that is, to prevent a man from retaining the money
D            of, or some benefit derived from, another which it is against
             conscience that he should keep. Such remedies in English law are
             generically different from remedies in contract or in tort, and are
             now recognised to fall within a third category of the common law
             which has been called quasi contract or restitution.
E
                 For historical reasons, quasi contract has traditionally been
             treated as part of, or together with, the law of contract. Yet
             independently, equity has also developed principles which are
             aimed at providing a remedy for unjustifiable enrichment. It may
             be that today these two strands are in the process of being woven
F            into a single topic in the law, which may be termed "restitution'"'.

          Recently the House of Lords had occasion to examine some of these
    principles in Woolwich Equitable Building Society v. Inland Revenue Com-
    missioners, (1993] AC. 70.
G          14. In regard to the law of restoration of loss or damage caused
     pursuant to judicial orders, the Privy Council in Alexander Rozer Charles
     Camie v. The acomptoir D'Escompte De Paris, (1869-71] 3 AC 465 at 475
     sta~ed : "


H               "..... one of the first and highest duties of all Courts is to take
     KAVITA(MRS.)v. BALSARAHYGIENELTD. [VENKATACJlALIAH, J.]                351

        care that the act of the Court does no injury to any of the Suitors, A
        and when the expression "the act of the Court" is used, it does not
        mean merely the act of the Primary Court, or of any intermediate
        Court of appeal, but the act of the Court as a whole, from the
        lowest Court which entertains _jurisdiction over the matter up to
        the highest Court which finally disposes of the case."               B
     In Jai Berham & Ors. v. Kedar Nath Marwari & Ors., AIR (1922) P.C.
269 at 271, the Judicial Committee referring to the above passage with
approval added :

           "It is the duty of the Court under S. 144 of the Civil Procedure         C
        Code to "Place the parties in the position which they .wpµld have
        occupied, but for such decree or such part thereof as has been
        varied or reversed.

           Nor indeed does this duty or jurisdiction arise merely under
        the said section. It is inherent in the general jurisdiction of the         D
        Court to act rigbtly and fairly according to the circumstances
        towards all parties involved."

      In Binayak Swain v. Ramesh Chandra Panigrahi & Anr., [1966] 3 SCR
24 at 27, this Court stated the principal thus :
                                                                                    E
            "...... 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 the benefit of the erroneous decree to make
        restitution to the other party for what he has lost. This obligation
        arises automatically on the reversal or modification of the decree
        and necessarily carries with it the right to restitution of .tll that has   F
        been done under the erroneous decree; and the Court in making
        restitution is bound to restore the parties, so far as they can be
        restored, to the same position they were in at the time when the
        Court by its erroneous action had displaced them from ...... "
                                                                                    G
       15. Section 144 CPC incorporates only a part of the general law of
restitUt;on. It is not exhaustive. (See Gangadhar & Ors. v. Raghubar Dayal
& Ors., AIR (1975) All 102 F.B. and State Govt. of Andhra Pradesh v. Mis.
Manickchand leevraj & Co., Bombay, AIR (1973) A.P. 27.

      The jurisdiction to make .restitution is inherent in every court and H
    352                   SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A   will be exercised whenever the justice of the case demands. It will be
    exercised under inherent powers where the case did not strictly fall within
    the ambit of Section 144. Section 144 opens with the words "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 purpose, ... ". The instant case may not strictly fall within the terms of
B   Section 144; but the aggrieved party in such a case can appeal to the larger
    and general powers of restitution inherent in every court. -

           We have considered this submission of Sri Grover relying on Sakam-
  ma v. Eregowda, [1974) 2 KLl 357 that the mere fact that the suit for
C permanent injunction was dismissed resulting in the vacation of the interim
   order of injunction granted during its pendency, would not entitle the
   successful defendant to seek restitution under Section 144 CPC. That
   principle has no application in this case. In the case before us the injunc-
   tion granted by the learned Senior Sub-Judge,;Chandigarh, was not merely
D negative. in terms interdicting interference from the respondent with the
   custody ~f the goods by the appellants; it went much further and expressly
   enabled the appellants to sell the goods. Pursuant to this order, the
   appellants disturbed the status-quo as on the date of the suit and sold away
   respondent's goods and converted them into money. The High Court while
   declining the prayer for payment of the sale proceeds to the respondent,
E however, sought to relegate the parties to the extent practicable; to the
   same position a~ obtained on the date of the suit. This the High Court did
   by directing furnishment of security to the extent of the value of goods sold
  'away under the cover of the interlocutory order. That an appeal filed
   against the said interlocutory order was withdrawn, does not, in our
F  opinion,   make any difference. Upon dismissal of the suit, the interlocutory
   order stOod set-aside and that whatever was done to upset the status-quo,
   was required to be undone to the extent possible. It is unfortunate that the
   learned Sub-Judge, !st Class made an order which, we think, ought not to
   have been made. If the Trial Judge felt that it was in the interest of justice
   that the goods required to be disposed of, he should have ordered the sale        ,
G by or under the supervision of a Commissioner of the court ensuring that
   the sale'.proceeds were under the court's control. We are constrained to
    cibse~ve'ihai'the order of the learned Sub-Judge, !st Class, failed to have
   due reM~d fo the need to protect the interests of the opposite party and,
    to s'ay the least, an improper order was passed. The ex-pane order granted
H by the l.earnfld Sub-Judge, !st Class, was not of mere negative import bUt
            KAVITA(MRS.)v. BALSARAHYGIENELTD. [VENKATACHALIAH, J.)         353


    virtually enabled and authorised the appellants to sell away respondent's     A
    goods of which appellants were mere clearing and forwarding agents. This
    permission to sell implicit in the form of the order enabled the appellants
    to purport to convey; respecting the goods, a better title than what appel-
    lants themselves had. That such a thing was achieved by an ex-parte order,
    tends to shake litigants' faith in the judicial process. The learned Sub-     B
    Judge, !st class ought not to have made an ex-parte order which occasioned
    serious prejudice and loss to the respondent. On the administrative side,
    the High Court may have to look into the propriety of the conduct of the
    learned Sub-Judge, !st Class, in this case.
        )

          16. In these facts and circumstances, what the learned Single Judge     C
    of the High Court did, which has since been approved by the Division
    Bench, is both good-sense and good law. There are, in our opinion, no legal
    infirmities in the orders under appeal. The appeals do not call for inter-
    ference. Both the appeals are, accordingly, dismissed with costs. The costs
    payable to the respondent are quantified at Rs. 25,000.

    V,S.S.                                                 Appeals dismissed .




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