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Judgment
Cornish, J.—The appeal is against the part of a restitution order directing interest to be paid on the sum ordered to be refunded. A
mortgagor having become insolvent the Official Receiver made a payment to a first mortgagee, who is the appellant before us, on account of his
mortgage debt. The second mortgagee, who is third Respondent in this appeal, objected to the rate of interest allowed by the Official Receiver to
the prior mortgagee on his debt. He appealed to the District Court against the Official Receiver''s decision without success. He then carried his
appeal to the High Court with the result that the lower Court''s order was modified by directing that the interest due should be recalculated at the
rate of Re. 1 per cent, per mensem instead of Re. 1-9-0 per mensem. The excess payment made on this account amounted to Rs. 1,746 odd. On
the petition of the present third respondent the lower Court has ordered this sum to be refunded to the third respondent with interest at 6 per cent,
per annum. The appeal is against this order for payment of interest, the appellant''s contention being that the Court had no jurisdiction to give
interest.
The High Court''s order on appeal varying the order of the lower Court by directing that the interest paid by the Official Receiver to the present
appellant on this mortgage debt should be recalculated at a lower rate was not a variation of a decree within the terms of Section 144, Civil
Procedure Code. It was a variation of an order in an appeal u/s 75 of the Provincial Insolvency Act. Section 144 of the CPC however, is not
exhaustive of the power of the Court to order restitution. Section 151 saves the inherent power of the Court to make such orders as may be
necessary for the ends of justice. As was said by their Lordships in Jai Berham and others V. Kedar Nath Marwari and others, 49 Indian Appeals
351 the duty imposed on the Court by Section 144, CPC to restore the parties to the position which they would have occupied but for such
decree as has been varied or reversed does not arise merely under that section. ''It is inherent in the general jurisdiction of the Court to act rightly
and fairly according to the circumstances towards all parties involved''.
The High Court on appeal having ordered that the interest paid to the first mortgagee by the Official Receiver under the sanction of the
insolvency Court should be recalculated at a lower rate, it followed that the mortgagee was bound to refund the excess which he had received in
payment of interest at the higher rate. That money was not his, but should have been paid to the second mortgagee. We think that the learned
District Judge was right in directing the appellant to pay interest on the excess payment for the long period, more than six years, during which he
has had the benefit of this over paid amount. For unless third respondent is repaid the money, of which he has been wrongfully deprived, with
interest, he will not be fully restored to the position which he would have occupied but for the order of the Court which was later varied on appeal.
There is a memorandum of objections to the 6 per cent, rate fixed by the lower Court. But we see no reason to interfere with this. The appeal
and memorandum are dismissed. But as both parties have failed in part we make no order as to the costs.