THE SPECIAL OFFICER (REVENUE) KERALA STATE ELECTRICITY BOARD AND ANR. ETC. ETC.versusM.R.F. LIMITED ETC. ETC.

      THE SPECIAL OFFICER (REVENUE) KERALA STATE                               A
         ELECTRICITY BOARD AND ANR. ETC. ETC.
                             v.
                 M.R.F. LIMITED ETC. ETC.

                          DECEMBER 12, 1995
                                                                               B
                [G.N. RAY AND FAIZAN UDDIN, JJ.]


       Restitutiolt-f'rinciple of-Duty of Court-Electricity charges-Upward
revision of tariffs--Strnck down by High Court as invali(}-Appeal-Revisions
upheld-Board's claim of interest on unpaid bill drawn on basis of revised      C
tariff-Maintainable.

       Respondent Company entered into an agreement with the kerala
State Electricity Board for supply of electricity to the factory of the High
Court in its favour and in terms of interim order passed by this company.      D
The agreement contained a provision for payment of power and energy
supplied to the company by the Board within 15 days from the date of the
receipt of the invoice by the consumer, namely the company and that in
default of payment within the stipulated time, the payment was to be made
with interest @18% per annum or at such other percentage as would be
fixed by the Board from time to time. The Board revised the tariffs for the    E
electricity supplied it in 1980, 1982 and 1984.

       The respondent company and other consumers challenged such
revisions by filing writ petitions. The High Court struck down the reVisions
of tariff by the Board holding that the respondent company and other F
consumers were, therefore, entitled to the refund of excess amount on
account of the payment of revised tariffs and that such amount paid in
excess would be adjusted towards future bills to be issued by the Board.
The Board filed Special Leave Petitions challenging the order of the High
Court. All the appeals were allowed by this Court upholding the validity
of revisions of tariffs by the Board making the respondent company and G
other consumers liable to pay the amounts due on the basis of revisions
of tariff including the amounts since adjusted by them. The Board there-
after raised a demand for payment of the amount by the respondent
inclusive of interest @18% p.a. The respondent company while not chal·
lenging the liability to pay the excess amount refused to pay interest as H
                                      599
    600                  SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A demanded by the Board. Such claim of interest was challenged by filing a
  writ petition. The Single Judge quashed the demand for interest holding
  that the demand was not justified. The Board filed an appeal against the
  judgment of the Single Judge. The Division Bench while dismissing the
  appeal held that after the High Court had struck down the revisions of
  tariffs and directed adjustment of the excess amount paid towards future
B demands, the respondent company was justified in not making payment of
  amounts which became due and therefore, it could not be held that the
  respondent company had defaulted in payment of amount, and that there
  was no enforceable demand after the decision of the High Court and
   therefore, the order quashing the demand for the interest by the Single
C Judge was justified. These appeals had been filed against the judgment of
  the Division Bench of the High Court.

         The appellants contended that the High Court on a total misconcep-
  tion on the fact and the legal position, bad held that at the relevant time,
D when the order of the High Court striking down the upward revisions of
  tariffs and subsequently when interim order passed by this Court during
  the pendency of the special leave petitions was subsisting, no liability had
  accrued for the respondent company to make payment on the basis of the
  revised tariffs; that in law such liability was always there because the
  revisions of tariff were held valid by this court and because of the er-
E roneous judgment of the High Court striking down the upward revisions
  of tariff such liability remained suspended till the correct position in law
  was finally determined by this court with which the liability revived; that
  as the liability of the respondent company to pay on the basis of the revised
  tariffs was always there and as such payment had not been made by the
F respondent company by taking advantage to the erroneous decision of the
   High Court, the respondent company should not be permitted to claim any
  immunity on its liability to pay interest on the unpaid amount of enhanced
   bill after the correct legal position was finally determined by this Court;
  that when a party to a legal proceeding has suffered on account of an
  erroneous adjudication by a court of law, the court has ~n imperative duty
G to restore the party which has suffered on account of such erroneous order,
   to the position, as far practicable, as would have prevailed, had there been
   no snch erroneous decision of the court; that in the instant case when the
   company had enjoyed the fruits of erroneous decision in its favour in as
   much as the company not only did not pay on the basis of the revised tariffs
H but whatever amount had been paid on the basis of revised tariff for the
                 SPL. OFFICER (REVENUE) v. M.R.F. LTIJ.                        601

earlier period was allowed to be adjusted by the company against its future           A
liability only on the basis of unrevised tariffs, and when the correct
position in law was settled by this court by holding that the upward
revisions of tariffs were fully justified, it was the bounden ·duty of the
respondent company to not only pay the unpaid amount of the bill due on
account of revisions of tariffs but also the agreed rate of interest @18%             B
on snch unpaid amount; that the respondent company being the manufac-
turing company and an on going concern, had gainfully utilised the
amount which it did not pay, the company had obligation, both moral and
legal, to repay the unpaid portion of the bill With interest; that the Board
was entitled to demand for payment of electricity charge consumed by the
company on the basis of revised tariffs and also the interest on such                 C
amount by way of restitution.

        The respondent contended that the Company had not taken any illegal
and undue advantage and only on the basis of the decision of the High Court
 in its favour and in terms of interim order passed by this Court, it paid the
 recoverable dues on acconnt of the electricity bill and got the claim of refund      D
 of the Company slowly adjusted against future bills and if on such facts and
 circumstances, the High Court had struck down the claim of interest by the
 Board on the ground that the amount on which interest W"dS claimed was not
 due and recoverable at the relevant period and the Company could nut be held
tu have defaulted in payment of any sum on which the interest might be                E
claimed, no exception could be taken to such decision; that it is not an inflexible
rule that in all cases in order to give effect to restitution, mesne profits and
damages including interest are to be given; that even if the company had a
liability to pay on the basis of revised tariffs, since upheld by this Court, the
liability to pay revived only prospectively from the date of the decision of this
Court and not from any earlier period and as the Company accepting such               F
liability had paid the demand on account of enhancement, it had rightly
refused to pay interest on such excess amount claimed on the footing that
demand for excess amount was also enforceable from the dates of revision of
tariffs and the High Court was, therefore, fully justified in quashing the memo
claiming interest on the excess dues by indicating cogent reasons and no              G
interference by this Court was called for.

      Allowing the appeals, this Court

      HELD : 1.1. It is an imperative duty of the Court to ensure that the
party to the tis does not suffer any unmerited hardship on account of an              H
    602                   SUPRF.ME COURT REPORTS [1995] SUPP. 6 S.C.R.

A order passed by the Court. The principle of restitution as enunciated by
    the Privy Council in Rodger's case has been followed in later decisions and
    such principle being in conformity to justice and fair play be followed. It
    should, however, be noted that in an action by way of restitution, no
    inflexible rule can be laid down. It will be the endeavour of the Court to
    ensure that a party who had suffered on account of decision of the court,
B   since finally rever-.d, should be put back to the position, as far as
    practicable, in which he would have been if the decision of the Court
    adversely affecting him had not been passed. In giving fnll and complete
    relief in an action for restitution, the Court has not only power but also a
    duty to order for mesne profits, damage, costs, interest etc. as may deem
C   expedient and fair conforming to justice to be done in the facts of the case.
     But in giving such relief, the Court should not be oblivions of any un-
     merited hardship to be suffered by the party against whom action by way
     of restitution is taken. In deciding appropriate action by way of restitution,
     the Court should take a pragmatic view and frame relief in such a manner
D    as may be reasonable, fair and practicable and does not bring about
     unmerited hardship to either of the party. [614-E-H]

          1.2. Revisions of tariff for the electricity charges payable by the Com-
    pany and other consumers had been struck down by the kerala High Conrt.
    So long such decision was not revised, the same, even though erroneous,
E remained fully operative. The result was that no bill could be drawn by the
     Board on the basis of revised rates and even if such bill had in fact been
    drawn, such bill remained inoperative, during the entire period when the
    judgment of the Kerala High Court had governed· the field. Pendency of
    appeal before this Court only ensured that the proceeding had not been
    finally rnncluded. Rut in the absence of any interim order of this Court
F   granting stay of operation of the impugned judgment, the judgment of the
    High Court was binding between the parties to the lis despite pendency of
    the appeal. Viewed from this aspect, it is quite evident that the Company
     or for that matter, similarly placed consumers had no obligation to take
     notice of the revised tariffs and to make any payment on the basis of such
G    revised tariffs. Consequently, the Company could not be held to be a defaul-
     ter for non-payment at the enhanced rate during the period when revi>ions,
     though made, remained unenforceable on a:ccount of the decision of the
     High Court. Rut after the decision of this Court upholding upw.rd
     revisions of tariITs, the Board's entitlement to draw bills on the bsis of
     upward revisions and conse<1uential, enforceability of payment of :such bills
H
                SPL. OFFICER (REVENUE) v. M.R.F. LID.                  603

by the consumers revived force. Hence, it would not be correct to contend ·A
that although the Company or for that matter consumers were required to
pay on the basis of revisions of tariffs from the dates when such revisions
became effective, liability for such payment would accrue only from the date
of pronouncement of the judgment by this Court upholding upward
revisions and not from any date prior to that. If the upward revisions are B
held as valid, enforceability of such upward revisions being consequential
to such revisions, though it had remained unenforceable for some period
on account of the decision of the High Court, can not but revive from the
date of upward revisions. (613-F-H, 614-A-D)

       1.3. In the instant case, the Company and other consumers though       C
 had liability to pay on the basis of revised tariffs, they had not paid on
such basis because of erroneous decision of the High Court. Not only they
 did not pay on the basis of revised tariffs, but they got adjustment of
payments already made prior to the decision of the High Court, against
future bills to be drawn only on the basis of unrevised tariffs in a phased
manner. The Company is an on going business concern and must have             D
utilised the money, saved on account of the decision of the High Court,
gainfully in its commercial activities. Similarly, other consumers have
gainfully utilised the amount saved for being not required to pay on the
basis of revised tariffs. The Board had to suffer financial lose because of
the said erroneous decision of the High Court. In the aforesaid cir-          E
cumstances, it will be lawful, conforming to equity and well established
principle of restitution for the Board to claim interest at 18% on the
unpaid portion of the Bill drawn on the basis of revised tariffs. The
Company had agreed to pay interest at 18% on the bills if not paid when
it became due and payable. Even otherwise, claim of 18% interest per
annum also appear to be just and proper. [615-A-D]                            F
       Alexander Rodger, Chades Camie and Richard James Gilman v. 17ze
Comptoir D' Escompte De Pwid and Chmte1ed Bank of India, Australia a11d
Chi11a, [1871] Law Reports (Privy Council Appeals) 465, Jai Berham a11d
Others v. Kedar Nath Marwaii and Others, AIR (1922) Privy Council 269, L. G
Guran Ditta v. T.R. Ditta, AIR (1935) Privy Council 12, Pappu Reddiar v.
P.S. V. Rm Ramanatha Iyer, AIR (1963) Madras 45 and Income Tax Officer,
Kolar a11d Another v. Seqhu Buchiah Setty, [1964) 7 SCR 148, referred to.

     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11737 of
1995 Etc. Etc.                                               H
    604                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A        From the Judgment and Order dated 27.2.91 of the Kerala High
    Court in W.A. No. 49/91.

          P.S. Poti and Ms. Malini Poduval for the Appellants.

          S.K. Dholakia and K.R. Nambiar for the Respondents.
B
          The judgment of the Court was delivered by

           G.N. RAY, J. Leave granted in all these five special leave petitions.
    Heard learned counsel for the parties and the appeals are disposed of by
    a common judgment in view of the fact that in all these matters common
C   question of law and fact arise.

          M.R.F. Limited is the respondent in appeal arising out of S.L.P. No.
   16265/1991. The said M.R.F. Limited (hereinafter referred to as the Com-
   pany) is engaged in manufacturing automobile tubes, tread rubber etc. and
   the said Company entered into an agreement with the Kerala State
D Electricity Board (hereinafter referred to as the Board) for supply of
   electricity to the factory of the said Company. The agreement contained a
  ·provision for payment of power and energy supplied to the Company by
   the Board within 15 days from the date of the receipt of the invoice by the
   consumer, namely, the Company. It was further provided for in the agree-
E ment that in default of payment within the stipulated time, the payment
   was to be made with interest @· 18% per annum or at such other percent-
   age as would be fJXed by the Board from time to time.

           The Board revised the tariffs for the electricity supplied by it in 1980,
    1982 and 1984. The respondent-Company challenged such revisions by
F   filing a Writ Petition before the Kerala High Court being numbered as OP
    2710/85. Similar Writ Petitions were filed by other consumers challenging
    the upward revisions by the Board. All such Writ Petitions were heard
    along with the Writ Petition filed by the respondent-Company. The Kerala
    High Court by common judgment dated December 19, 1985, struck down
G   the revision of tariff by the Board. The respondent-Company and other
    consumers were, therefore; entitled to the refund of excess amount on
    account of the payment of revised tariffs. The High Court of Kerala
    directed that such amount paid in excess would be adjusted towards future
    bills to be issued by the Board.

H          The Board, thereafter, moved this Court by filing ~11ecial leave
         SPL. OFFICER (REVENUE) v. M.R.F. LIB. (G.N. RAY, J.]         605

petitions inter alia challenging the correctness of the judgment of the A
Kerala High Court dated December 19, 1985 striking down the revisions
of tariffs. Such special leave petition was entertained by this Court and an
interim order was passed inter alia directing that pending disposal of the
appeals before this Court, there would be stay of the refund of charges
already collected. It was further directed by this Court that future charges B
would be collected to the extent of 50% only and the balance would be
adjusted towards the past charges. The respondent Company paid 50% of
the demands for the months of March to June 1986 and adjusted 50% of
the balance towards the refund due to them. Similar appeals were also
preferred by the State Electricity Board against other consumers whose
Writ Petitions were disposed of by the said common judgment by the C
Kerala High Court. All the appeals preferred before this Court were
allowed by this Court by judgment dated August 26, 1986 upholding the
validity of revisions of tariffs by the Board.

       In view of the said decision of this Court dated August 26, 1986 D
upholding the tariff revisions by the Board, the respondent- Company and
other consumers became liable to pay the amounts due on the basis of
revisions of tariff including the amounts since adjusted by them in the
manner indicated hereinbefore.

       The Board thereafter raised a demand for payment of the amount E
by the respondent inclusive of interest @18% per annum. The respondent-
Company did not challenge the liability to pay the excess amount in view
of the revisions of tariffs put if refused to pay interest as demanded by the
Board and such claim of interest by the Board was challenged before the
Kerala High Court by filing a writ petition numbered as OP 76fo/86. The F
learned Single Bench disposed of Writ Petition by holding that the demand
for interest comprised in the demand notice (Ext. P.2) was not justified
and the demand for interest of a sum of Rs. 6, 60, 615 as contained in Ext.
P.2 was quashed. The Board thereafter preferred an appeal. Such appeal
was numbered as W.A. No. 49/91. It was i11ter alia held by the Division
Bench in disposing of the said appeal by its judgment dated February 27, G
1991, that after the Kerala High Court had struck down the revisions of
tariffs and directed adjustment of the excess amount paid towards future
demands, the respondent was justified in not making payment of amounts
which became due after December 19, 1985. The Division Bench of the
High Court also pointed out that the interim order of this Court was passed H
     606                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A only on May 15, 1986. In the aforesaid circumstances, it could not be
  contended by the appellant-Board that the respondent-Company had not
  complied with the directions of this Court. It could not also be contended,
  therefore, that the respondent-Company had defaulted in payment of 50%
  of the future bills as directed to be paid by this Court. The Division Bench
  also held that the liability to honour future bills had ceased on account of
B the decisions of the Kerala High Court December 19, 1985 till the excess
  payment was adjusted. It was also indicated by the Division Bench that
  even before such adjustments had been fully made, this Court passed
  interim order and the respondent-Company had complied with such inter-
  im order. The Division Bench, therefore, held that there was no enforce-
C able demand after the decision of the Kerala High Court and the interim
  order passed by this Court. The Division Bench agreed with the view of
  the learned Single Bench that the respondent-Company could not be held
   to have defaulted for non-payment of liability which did not factually exist
   at the relevant time. The finding of the learned Single Judge that there was
D no default on the part of the respondent Company, as there was nothing
   to hold that the respondent-Company defaulted on account of its failure
   to pay was accepted. Hence, the order quashing the demand for the
   interest as contained in Ext. P.2 of the learned Single Bench was held
   justified. The said appeal was therefore dismissed by the Dhision Bench
   by the impugned order.
E
            The demand or the Board for interest on account of the liability
      arising out of revisions of tariffs from other consumers were also chal-
      lenged before the Kerala High Court. Such demands of interest were also
      quashed by the Single Bench of the Kerala High Court and the Division
F     Bench also dismissed appeals preferred by the Board following the Judg-
      ment dated March 2, 1994 passed in Writ Appeal No. 48/91. Being ag-
      grieved by the aforesaid decision of the Kerala High Court quashing the
      demand of payment of interest on account of the liability arising due to
      revisions of tariffs, the Board moved this Court by filing Special leave
      petitions out of which the instant appeals arise. As in all these appeals, the
 G    same question requires to be decided they have been heard analogously
       and are being disposed of by this common judgment.

         Mr. Poti, learned Senior counsel appearing for the appellants has
   contended that the upward revision of tariffs by the Board were challenged
 H by the respondent-Company and other consumers. Initially, they succeeded
          SPL. OFFlCER (REVENUE) v. M.R.F. LTD. [G.N. RAY, J.]              607

 before the Kerala High Court where such upward revisions of tariffs had A
 been struck down but ultimately the. validity of such upward revisions of
 tariffs has been upheld by this Court. Hence, liability of a consumer of
 electricity supplied by the Board to pay dues on the basis of the revised
 tariffs cannot be denied and the respondent-Company has also conceded
 to such demand. But the respondent-Company is only objecting tci its B
liability to pay interest on the unpaid portion of the bill which is at-
tributable to the upward revision of tariffs. He has submitted that the
Kerala High Court, unfortunately, on a total misconception of the fact and
the legal position, has held that at the relevant time, when the order of the
Kerala High Court striking down the upward revisions of tariffs and
subsequently when interim order passed by this Court during the pendency C
of the special leave petitions inter alia regulating a scheme of adjustment
between the Board and the respondent-Company on the basis of the
decision of the kerala High Court was subsisting, no liability had accrued
for the respondent-Company to make payment on the basis of the revised
tariffs. Accordingly, question of payment of interest on such unpaid amount D
also does not arise.

        Mr. Poti has submitted that the Kerala High Court has failed to
 appreciate that the validity of upward revisions of tariffs was finally decided
 by this Court by disposing of special leave petitions after setting aside the
decision of the Kerala High Court that such upward revisions of tariffs            E
were illegal. The interim order by this Court while the special leave
 petitions were pending for final disposal, was made to safeguard the
interest of the parties because the respondent-Company was keen to get
back the alleged over payment on account of bills calculated on the basis
of revised tariffs since struck down by the Kerala High Court. This court,         F
therefore, subject to the final decision of the question as to the validity of
the upward revisions of tariff in the special leave petition pending before
it, passed the said interim order in favour of the respondent-Company so
that the alleged over-payment by the respondent-Company would be ad-
justed \vithout causing undue hardship to the Board.
                                                                                   G
      Mt. Poli has submitted that it must be held that in law such liability
was always there because the revisions of tariff were held valid by this
Court. He has submitted that because of the erroneous judgment of the
Kerala High Court striking down the upward revisions of tariff such liability
remained suspended till the correct position in law was finally determined H
    608                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A by this Court with the liability revived with full vigour.

        Mr. Poti has submitted that as the liability of the respondent-Com-
  pany to pay on the basis of the revised tariff was always there and as such
  payment had not been made by the respondent-Company by taking ad-
  vantage of the erroneous decision of the High Court, the respondent-Com-
B pany should not be permitted to claim any immunity on its liability to pay
  interest on the unpaid amount of the enhanced bill after the correct legal
  position was finally determined by this Court. Mr. Poli has submitted that
  when a party to a legal proceeding has suffered on account of an erroneous
  adjudication by a Court of law, the court has an imperative duty to restore
C the party which has suffered on account of such erroneous order, to the
  positions, as far practicable, as would have prevailed, had there been no
  such erroneous decision of the Court.

         In support of this contention, Mr. Poti has referred to a decision of
D the Privy Council in Alexander Rodger, Charles Camie and Richard James
  Gilman v. The Comptoir D'Escompte De Parid and the Chartered Bank of
  India, Australia and China, (1871) Law Reports (Privy Council Appeals
  465). In that case, the respondents before the Privy Council brought an
  action against the defendants-appellants for recovery of a certain sum. An
  order was passed by the Court at Hongkong for payment of $56, 390.92 as
E principal and $6, 336.47 as interest with further sum as costs. The defen-
  dants thereafter applied for a new trial or for a non suit. Such application
  was refused with costs. Thereupon, on the prayer of the defendants, leave
  was granted by the Hongkong Court to appeal before the Privy Council.
  The plaintiffs decree holders, however executed decree of payment of
F principal with interest and received the money decreed in its favour.
   Ultimately, the Privy Council allowed the appeal and in terms of such
   decision of the Privy Council, it was ordered that the judgment of the
   Courts below should he reversed and an order of non suit should be
   entered. In the order passed on the basis of ultimate decision of the
   Council there was however no specific direction for refund of the entire
G amount which also included the interest on the principal since realised by
   the plaintiffs by executing the decree. The defendant thereafter applied for
   restitution and the Supreme Court of Hongkong held that it had power to
   direct for payment of all sums and costs that had been paid under the
   judgment to the plaintiffs but it had no power to order for payment of any
H interest upon any part of the sum paid over by the defendants to the
        SPL OFFICER (REVENUE) v. M.R.F. LID. [G.N. RAY, J.]             609

plaintiffs. In the aforesaid facts, the question which came up for considera- A
tion before the Privy Council was whether the Court of Hongkong had or
had not the power to order for payment of interest and, if so, whether in
this case it was proper to exercise this power ? The Privy Council has held
in the said decision in Rodger's case that one of the first and highest duty
of this Court is to take care that an act of the Court does not cause any B
injury to any of the suitors and when the expression "the act of the Court"
is used, it does not mean that the only act of the primary court or of any
intermediary court of the appeal but act as a whole of the Court from the
lowest Court which entertains jurisdiction over the matter upto the highest
Court which finally dispenses with the case. It has been held by the Privy
Council that it is the duty of all these Tribunals to take care that no act of C
the Court in whole of the proceedings does any injury to the suitors in the
Court. The Privy Council has also negatived the contention of the plaintiff-
respondents that the principal sum and not the interest on it,· since
recovered by execution, is enforceable by way of restitution.

       Mr. Poti has also referred to another decision of the privy Council
                                                                              D
in lai Berham and Others v. Kedar Nath Marwari and Others, AIR (1922)
Privy Council 269. In the said decision, the earlier decision of the Privy
Conncil in Rodger's case was referred to and relied upon and it has been
held by the Privy Council that one of the first 'and highest duties of all the
Courts is to take care that act of the Court does not cause injury to any of E
the suitors. It would be inequitable and contrary to justice that the judg-
ment debtor should be restored the property without making good to the
auction purchaser the money which has been applied for his benefit.

       Mr. Poti has also referred to another decision of the Privy Council F
in L. Guran Ditta v. T.R. Ditta, AIR (1935) Privy Council 12. In that case
also, the decision in Rodger's case was referred to and it has been held by
the Privy Council that the duty of the Court when awarding restitution
under Section 144 of the Code of Civil Procedure is imperative. The Court
shall place the applicant in the position in which he would have been if the
order had not been made and for this purpose the Court is armed with G
powers. The Privy Council has also indicated that the expression "may"
should not be understood as discretionary but it only points out that the
Court is empowered to grant mesne profits, interest and so forth. The Privy
Council has also held that the restitution ordinarily involves interest also
and the Court can grant the same.                                            H
    610                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A         Mr. Poli has also referred to a Full Bench decision of the Madras
    High Court in Pappu Reddiar v. P.S. V. Rm Ramanatha Iyer, AIR (1963)
    Madras 45. The Madras High Court has held that the restitution conceived
    in the light of doing justice between the parties will necessarily have to
    depend on the circumstances of each case and cannot be reduced to the
    form of inflexible rule that the Courts should have regard only to the
B   detriments suffered by one party and not to the position of the other. The
    granting of restitution under Section 144 of the Civil Procedure Code
    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
C   which decree holder is either unable or unwilling to obtain the use of the
    money, it cannot be taken as invariable rule in such a case that the decree
    holder should pay interest on the amount lying in Court on the reversal of
    the trial Court's decree in appeal.

D           Mr. Poli has submitted that in the instant case, the Company had
    enjoyed the fruits of erroneous decision in its favour inasmuch as the
    Company not only did not pay on the basis of the revised tariffs but
    whatever amount had been paid on the basis of the revised tariffs for the
    earlier period was allowed to be adjusted by the Company against its future
    liability only on the basis of unrevised tariffs.
E
         Mr. Poti has submitted that such advantage was enjoyed by the
  Company because the Company had obtained an erroneous decision from
  the Kerala High Court but when the correct position in law was settled by
  this Court by holding that the upward revisions of tariffs were fully justified,
  it was the bounded duty of the respondent-Company to not only pay the
F unpaid amount of the bill due on account of revisions of tariff but also the
  agreed rate of interest @ 18% on such unpaid amount. Mr. Poli has
  submitted that it was highly improper on the part of the Company to deny
  its liability to pay interest on the unpaid amount of the bill. Mr. Poti has
  submitted that the respondent-Company being the manufacturing Com-
G pany and an on going business concern, has gainfully utilised the amount
  which it did not pay because of the subsistence of erroneous decision
  passed by the Kerala High Court. But when the question of liability was
  clearly determined by this court, the company had obligation, both moral
  and legal, to repay the unpaid portion of the bill with interest. Mr. Poli has
  submitted that the Board is entitled to demand for payment of electricity
H charges consumed by the Company on the basis of revised tariffs and the
         SPL OFFICER (REVENUE) v. M.R.F. LTD. [G.N. RAY, J.)              611

Board is also legally entitled to claim payment of interest on such amount A
by way of restitution. Mr. Poli has submitted that when the respondent-
Company moved the Kerala High Court by making an application under
Article 226 of the Constitution contending inter alia it had no liability to
pay interest on the unpaid portion of the bill due on account of the
revisions of tariffs, the High Court failed in its duty in not rejecting the said B
petition by clearly indicating that such contention was untenable both in
law and also in equity and in any event, such claim of the Company being
unfair and inequitable, the exercise of writ jurisdiction of the High Court
which is not only discretionary but also equitable, was not at all warranted.
Mr. Poti has, therefore, submitted that the impugned judgment of the High
Court in quashing the bill raised by the Board against the, Company to the C
extent of the interest claimed @ 18%, must be set aside by indicating that
the Board is justified in making such claim and the respondent- Company
has liabili•y to pay interest @ 18% on the unpaid portion of the bill for the
entire perio.i -,,.hen the amount be.came due till such date when the prin-
cipal amount on account of revised has been paid.
                                                                                D
       Mr. Dholakia, learned senior counsel for the respondent, has,· how-
ever, disputed the contentions of Mr. Foti. He has contended that the
Company had challenged the validity of upward revisions of tariff before
the High Court by filing writ petition and on contest, such writ petition was
allowed by striking down the upward revisions of tariff. The Board's appeal     E
against such decision was also dismissed by the Division Bench of the High
Court. The Board thereafter filed special leave p~tition before this Court.
Although such special ieave petition was entertained by this Court, this
Co11rt was also not inclined to stay the operation of the impugned judgment
of the High Court. On the contrary, proceeding on the footing that in view
of the impl!glled judgment of the High Court, the appellant Board was           F
under obligation to refund the entire excess amount since paid by the
Company, this Court passed an interim order in favour of the Board, and
to the detriment of the interest of the Company, that claim of refund of
excess amount of the Company would be slowly adjusted against future bills
drawn against the Company. The Company had not taken any illegal and
undue advantage and only on the basis of the decision of the High Court         G
in its favour and in terms of interim order passed by this Court, it paid
then recoverable dues on account of the electricity bill and got the claim
of refund of the Company slowly adjusted against future bills. If on such
facts and circumstances, the High Court has struck down the claim of
interest by the Board on the ground that the amount on which interest was       H
      612                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

 A    claimed was not due and recoverable at the relevant period and the
      Company cannot be held to have defaulted in payment of any sum on which
      the interest may be claimed, no exception can be taken to such decision.
      Mr. Dholakia has submitted that it is not an inflexible rule that in all cases,
      in order to give effect to restitution, mesne profits and damages including
      interest are lo be given.
 B
            In this connection, Mr. Dholakia has referred to a decision of Cal-
      cutta High Court in Surendra Nath Choudhury v. Sulta11 Ahmed, AIR
      (1935) cal. 1206. In the said decision, the High Court has held that where
      the wrong doers have not been shown to have cultivated the lands but
 C    settled the lands with tenants, mesne profits can only be calculated on the
      basis of rental value of the land. In assessing what a party has lost on
      account of dispossession, the law takes into account not what he could have
      made but what his opponent did in fact make or could with reasonable
      diligence have made.


..D        Mr. Dholakia has also referred to a decision of this Court in Income
      Tax Officer, Kolar and Another v. Seqliu Buchian Setty, [1964] 7 SCR 148.
      It has been held as per majority decision in this case that on the income
      tax officer's order being revised in appeal, the default based on it and other
      consequential proceedings must be taken to have been superseded and
 E    fresh proceedings have lo be started to realise the uues as formed by
      revised order. As demand notice was issued on the basis of assessment
      made by the Income Tax Officer and no fresh notice of demand was issued
      on the basis of revised assessment made in appeal, the assessee could not
      have been treated as defaulter and the proceedings of the collector based
 F    on the certificate issued by the I.T.O would be held as illegal. Mr. Dholakia
      has submitted that even if the Company has a liability to pay on the basis
      of revised tariffs, since upheld by this Court, it will not be correct to
      contend that such liability was enforceable from the dates of revisions of
      tariff and on such premises, the Company may be held defaulter in payment
      of excess amount flowing from revisions of tariff and consequently incur-
 G    ring a liability to pay interest on such excess amount. After the High Court
      struck down the upward revisions of tariff, no claim on such revisions could
      be made and a consumer had also no liability to pay on the basis of revised
       tariffs. It was only when this Court had finally decided the question of
       validity of revisions of tariff in favour of the Board, the liability to pay
 H     revived only prospectively from the date of the decision of this court and
         SPL. OFFICER (REVENUE) v. M.R.F. LTD. [G.N. RAY, J.]           613

not from any earlier period. Mr. Dholakia has submitted that as already A
indicated, this Court did not pass any interim order of stay of operation of
the impugned judgment of High Court so that there was any occasion to
proceed on the footing that liability to pay at the revised rates had
remained in force. The liability to pay on the basis of revised rates ceased
to be operative after the pronouncement by the High Court but became B
operative after the final decision by this Court. The Company accepting
such liability after the decision of this Court has paid the demand on
account of enhancement due to revisions of tariff but as the liability for
payment of excess amount was enforceable from the date of decision of
this Court, it h~ ;ightly refused to pay interest on such excess amount
claimed on the footing that demand for excess amount was also enforceable C
from the dates of revision of tariffs.

      He has submitted that the High Court is, therefore, fully justified in
quashing the memo claiming interest on the excess dues by indicating
cogent reasons and no interference by this Court is called for. The appeals, D
therefore, should be dismissed. In other appeals, no new contention has
been raised by the parties.

       After giving our careful consideration to the facts and circumstances
 of the case and the submissions made by the learned counsel for the
parties, it appears to us that revisions of tariff for the electricity charges E
payable by the Company and other consumers had been struck down by
the Kerala High Court. So long such decision was not revised, the same,
even though erroneous, remained fully operative. The result was that no
bill could be drawn by the Board on the basis of revised rates and even if
such bill had in fact been drawn, such bill remained inoperative, during the F
entire period when the judgment of the Kerala High Court had governed
the field. Pendency of appeal before this Court only ensured that the
proceedings had not been finally concluded. But in the absence of any
interim order of this Court granting stay of operation of the impugned
judgment, the judgment of the High Court was binding between the parties
to the lis despite pendency of the appeal. Viewed from this aspect, it is G
quite evident that the Company or for that matter, similarly placed con-
sumers had no obligation to take notice of the revised tariffs and to make
any payment on the basis of such revised tariffs. Consequently, the Com-
pany cannot be held to be a defaulter for non payment at the enhanced
rate during the period when revisions, though made, remained unenforce- H
    614                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A   able on account of the decision of the High Court.

           But after the decision of this Court upholding upward revisions of
    tariffs, the Board's entitlement to draw bills on the basis of upward
    revisions and consequential enforceability of payment of such bills by
    consumers revived with full force. Hence it would not be correct to contend
B   that although the company or for that matter consumers were required to
    pay on the basis of revisions of tariffs from the dates when such revisions
    became effective, liability for such payment would accrue only from the
    date of pronouncement of the judgment by this Court upholding upward
    revisions and not from any date prior to that. If the upward revisions are
C   held as valid, enforceability of such upward revisions being consequential
    to such revisions, though it had remained unenforceable for some period
    on account of the decision uf the High Court, can not but revive from the
    dates of upward revisions.

D        There is no manner of doubt it is an imperative duty of the court to
  ensure that party to the !is does not suffer any unmerited hardship on
  account of an order passed by the Court. The principle of restitution as
  enunciated by the Privy Council in Rodger's case (Supra) has been foliowed
  by the Privy Council in later decisions and such principle being in conforrn-
  ity to justice and fair play be followed. It should, huwever, be noted that
E in an action by way of restitution, no inflexible rule can be laid down. It
  will be the endeavour of the Court to ensure that a party who had suffered
  on account of decision of the Court, since finally •eversed, should be put
  back to the position, as far as practicable, in which he would have been if
  the decision of the court adversely affecting him had not been passed. In
F giving full and complete relief in an action for restitution, the court has not
  only power but also a duty to order for mesne profits, damages, costs,
  interest etc. as may deem expedient and fair conforming to justice to be
   done in the facts of the case. But in giving such relief, the Court should
   not be oblivious of any unmerited hardship to be suffered by the party
   against whom action by way of restitution is taken. In deciding appropriate
G action by way of restitution, the court should take a pragmatic view and
   frame relief in such a manner as may be reasonable, fair and practicable
   and does not bring about unmerited hardship to either of the party.

             In the instant case, the company and other consumers though have
H    liability to pay on the basis of revised tariffs, they had not paid on such
        SPL. _OFFICER (REVENUE) v. M.R.F. LTD. [G.N. RAY,J.]         615

basis because of erroneous decision of the High Court. Not only they did A
not pay on the basis of revised tariffs, but they got adjustment of payments
already made prior to the decision of the High Court, against future bills
to be drawn only on the basis of unrevised tariffs in a phased manner. The
Company is an on going business concern and must have utilised the
money, saved on account of the decision of the High Court, gainfully in its B
commercial activities. Similarly, other consumers have gainfully utilised the
amount saved for being not required to pay on the basis of revised tariffs.
The Board had to suffer financial loss because of the said erroneous
decision of the High Court. In the aforesaid Circumstances, it will be
lawful, conforming to equity and well established principle of restitution
for the Board to claim interest at 18% on the unpaid portion of the Bill C
drawn on the basis of revised tariffs. The Company had agreed to pay
interest at 18% on the bills if not paid when it became due and payable.
Even otherwise, claim of 18% interest per annum also appears to be just
and proper. We, therefore, set aside the impugned decision of the High
Court by allowing these appeals. There will be, however, no order as to D
cost.

R.A.                                                   Appeals allowed.