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Judgment
Tarlok Singh Chauhan, J.
1.The case has a chequered history. The suit, out of which the present appeals arise, was initially dismissed by the learned Single Judge of this Court
vide judgment and decree dated 02.07.2002. The judgment and decree so passed were assailed by the plaintiff by filing OSA No. 13 of 2002 before
the learned Division Bench of this Court, but that was dismissed vide judgment and decree dated 12.08.2008.
Aggrieved by the said order, the plaintiff filed an appeal by way of SLP before the Hon’ble Supreme Court and the same came to be allowed
on 26.10.2010 vide decision reported in Mahendra Pal versus State of Himachal Pradesh and others (2010) 13 SCC 441 and the judgment and decree
passed by the learned Single Judge as also the Division Bench of this Court were set aside and the matter was remanded to the learned Single Judge
for afresh consideration. It was after such remand that the learned Single Judge vide impugned judgment and decree dated 27.04.2011 decreed the
suit for a sum of `24,02,154/- in favour of the plaintiff and against the defendants along with future interest at the rate of 6% per annum from the date
of decree till realization of the decretal amount, who held liable defendants No.1 to 3 to pay the entire decretal amount along with interest jointly and
severally to the plaintiff. The parties shall be referred to as the plaintiff and defendants.
Both the parties aggrieved by the judgment and decree passed by the learned Single Judge have filed the instant appeals.
As regards OSA No.8 of 2011 preferred by the plaintiff, he has assailed the judgment and decree passed by the learned Single Judge on the ground
that even though the learned Single Judge has rightly come to the conclusion that the plaintiff is entitled for 3/4th share with respect to 1,33,453 resin
blazes but has wrongly come to the conclusion that the plaintiff was entitled to `24/- per blaze as fixed for the year 1994 tapping season, whereas,
according to the admitted position between the parties, this rate was `26/- per blaze for the year 1995 tapping season, therefore, the findings on issues
No.4 and 5 as recorded by the learned Single Judge were liable to be modified to the extent that the plaintiff was to be held entitled to 3/4th value of
1,33,453 resin blazes at the rate of `26/- per blaze which comes to `26,02,338.59/- as against the decretal amount of `24,02,154/-. The other ground of
challenge made by the plaintiff/appellant is with respect to rate of interest, as according to him, he was entitled to the interest at the rate of 16.5% per
annum from the date it was due i.e. year 1995 or in the alternate with effect from 1998 when the suit came to be filed till the payment, instead of 6%
per annum from the date of decree.
On the other hand, the defendant-State has filed OSA No. 13 of 2011 mainly on the ground that the suit of the plaintiff could not have been decreed
since the entire resin was produced during the period when the forest was in the hands of the State and further there was no cogent and legal
evidence qua handing over of 1,33,453 resin blazes by the respondent/plaintiff prior to 11.03.1995.
However, before adverting to the merits of the appeals, certain basic facts, as have been noticed in its decision by the Hon’ble Supreme Court
in Mahendra Pal’s case (supra) need to be noticed.
Kutlehar was a small princely State in Kangra Hills having 16 tapas (tikas) as forests which were known as “Kutlehar Forestsâ€. These forests
were managed by the Raja of Kutlehar subject to the terms and conditions specified by the then Government. Such management continued
generation after generation.
The plaintiff was appointed as a Forest Officer in the capacity of Superintendent of Kutlehar forests under Section 2(2) of the
Forest Act by Notification dated 01.10.1958 issued by the then Government of Punjab before the formation of the State of Himachal Pradesh. The
said forests were under the charge and management of the plaintiff and he was entitled to dispose of the forest produce such as resin, timber, bamboo,
grass, etc. in accordance with the working plans prepared by the Forest Department. As per the terms and conditions of the management, he was
entitled to retain 3/4th share of the total income from the said forests and 1/4t h share of the gross income was payable to the Government. The
entire expenditure on the management and exploitation of the forests were to be incurred by the plaintiff.
In the year 1992, the State Legislative Assembly passed the Himachal Pradesh Kutlehar Forest (Acquisition of Management) Act, 1992
(hereinafter referred to as “the Actâ€) . Pursuant to the provisions of Section 4 of the said Act, the management of these forests was taken over
by the State Government. Challenging the constitutionality of the Act, the plaintiff filed Civil Writ Petition No. 707 of 1992 in this Court whereby this
Court vide judgment dated 09.05.1994 upheld the constitutional validity of the aforesaid Act except Section 5.
During the year 1995, when the management of the Kutlehar forests was with the plaintiff, he offered 1,33,591 resin blazes to the Divisional
Manager, H.P. State Forest Corporation Ltd., Una (hereinafter referred to as the “State Corporationâ€), respondent No.3 herein, for resin tapping,
but on 14.02.1995, the State Corporation took over the resin blazes so offered and invited tenders for undertaking the work of tapping. On 10.03.1995,
the State of H.P. issued the Notification and enforced the provisions of the Act with effect from 11. 03.1995 and asked the plaintiff to hand over the
management of the Kutlehar forests. On 16.03.1995, the plaintiff filed Civil Writ Petition No.127 of 1995 challenging the Notification dated 10.03.1995
in this Court. This Court passed the interim order to the effect that the plaintiff would continue with the management of the forests.
On 25.04.1995, the “Pricing Committee†of the State Corporation decided the prices of resin blazes at the rate of `25 per blaze for the 1995
season. On 09.08.1995, this Court dismissed the writ petition observing that the disputed questions of fact could not begone into in exercise of
extraordinary jurisdiction under Articles 226/227 of the Constitution of India and the plaintiff was given liberty to resort to appropriate proceedings
before the appropriate forum. On 05.01.1996, the plaintiff filed a special leave petition before the Hon’ble Supreme Court which became Civil
Appeal No. 239 of 1996 and was dismissed by order dated 22.08.2000.
On 07.02.1996, the management of the Kutlehar forests was taken over by the State Corporation in absentia.
As observed earlier, the suit came to be filed in the year 1998 for recovery of `35,67,722/- along with interest at the rate of 16. 5% per annum with
costs in respect of 1,33,591 resin blazes offered to the Divisional Manager, Himachal Pradesh, for resin tapping when the management of the Kutlehar
forests was with him in the 1995 season.
The defendants contested the suit by filing written statement in which several preliminary objections were taken. It was stated that the suit was
the repetition of CWP No.1758 of 1995 filed by the plaintiff which was dismissed on 28.10.1997. It was further averred that after coming into force
the Act on 11.03.1995, the Government had authorized Divisional Forest Officer, Una, to enter upon the land and premises vested in the State
Government under Section 4 of the Act which was evaded by the plaintiff by filing CWP No.127 of 1995. It was also alleged that with effect from
11.03.1995 as per Section 4 of the Act, the grant in favour of the plaintiff stood extinguished and all rights, title and interest of the grantee vested in the
Government free from all encumbrances.
On the pleadings of the parties, the learned Single Judge framed the following issues:-
“1. Whether the suit is properly valued for the purpose of court fee and jurisdiction? OPP.
Whether the plaint is not properly verified? OPD-3.
Whether the suit has been instituted by competent person? OPD-3.
Whether the plaintiff is entitled to the suit amount or any other amount? If so, from whom? OPP.
Whether the plaintiff is entitled to claim interest on the amount of the royalty? If so, on what rate? OPP.
Whether the plaintiff has no cause of action as alleged? OPD.
Whether the plaintiff is guilty of acts of suppressio-veri-suggestio falsi? OPD.
Relief.â€
After recording evidence and evaluating the same, the learned Single Judge decreed the suit, as aforesaid, which judgment and decree have been
challenged by both plaintiff and the State by filing the aforesaid appeals.
At the outset, it may be observed that as regards the findings to the entitlement of amount upto 11.03.1995, the claim of the plaintiff has been
upheld even by the Hon’ble Supreme Court in Mahendra Pal’s case (supra) and the case was remanded to the learned
Single Judge only to determine the quantum of amount till the appointed day i.e. 11.03.1995 as per the materials placed by both the parties in the form
of oral and documentary evidence. This is evidently clear from the following observations:- “Hence, it is clear that Kutlehar Forests were under
the charge and management of the appellant and he was competent not only to maintain and preserve the said forests but was also entitled toÂ
his share in accordance with the working plans prepared by the Forest Department. It is also his claim that he took adequateÂ
steps for the protection of Fauna and Flora available in the forests in question. It is also his claim that according to the terms andÂ
conditions subject to which management of the said forests  was entrusted to the appellant and his forefathers, they were entitled to
retain 3/4th share of the total income derived or derivable from the forests whereas 1/4th share of the gross income was payable to the
Government.†The Supreme Court continued that : “The learned Single Judge and the Division Bench of the High Court basing reliance on
Section 4 of the Act held that the right, title and interest of the plaintiff/appellant herein grantee/superintendent of Kutlehar Forests stood extinguished
on the appointed day, i.e. 11.03.1995, therefore, he was under no obligation to continue with the management of the forests nor has any right to share
in income arising out of the produce of the said forests on and after 11.03.1995. It is true that after 11.03.1995, the appellant cannot have any right
over the forest produce. However, in view of the earlier order of this Court clarifying the position and his entitlement, there is no need to go into the
vesting right etc. as claimed by the State Government. Admittedly, the appellant was asked to look after the forest produce as Superintendent of
Forests and in lieu of salary he was assured grant of 3/4th of the price of resin blaze. It is specifically pleaded and the materials were also placed by
the appellant about the work done such as maintenance, manuring protecting the trees etc. It is also specifically pleaded that before the appointed day,
1.e. 11.03.1995, he was still in the management of Kutlehar Forests, offered 1,33,591 resin blazes to the Divisional Manager of the State Corporation
at Una for resin tapping during 1995 vide letter dated 03.02.1995. It is also seen that the State Corporation-respondent No.3 herein took over the resin
blazes so offered and invited tenders for undertaking the work of tapping on 14.02.1995 and the tenders were opened on 01.03.1995 at 2.30 p.m. All
these details are available in the letter of the State Corporation dated 22.03.1995. Inasmuch as the appellant was continuing as Superintendent of
Forests without a specific salary but with an assurance of 3/4th price of forest produce such as resin blazes etc. till the appointment day, i.e.
11.03.1995, we are of the view that the appellant is entitled for his legitimate dues till such date. Those aspects were not being correctly adverted to
and appreciated by the learned Single Judge as well as by the Division Bench of the High Court and mainly concentrated on the “vesting†of
forests on or after 11.03.1995 in favour of the State Corporation by holding that the appellant was not entitled to claim anything thereafter. Even
though the appellant placed relevant materials including the assertion and statement of PW-3 who is none else than the Divisional Manager for the
State Corporation, Una, those aspects have not been properly appreciated. In those circumstances, we are of the view that ends of justice would be
met by remitting the matter to the learned Single Judge for fresh disposal and quantifying the eligible amount.†The Supreme Court further held that:
“Under these circumstances, we set aside the orders passed by the learned Single Judge as well as the Division Bench of the High Court and remit
the matter to the learned Single Judge for fresh consideration with the available materials. Except pointing out the claim of the appellant, we have not
expressed anything on the merits and it is for the learned Single Judge to determine the quantum of the amount till the appointed day, i.e. 11.03.1995 as
per the materials placed by both parties in the form of oral and documentary evidence. Inasmuch as the matter is pending from 1999, we request the
learned Single Judge to restore the suit to its original number i.e. Civil Suit No. 36 of 1998 and dispose of the same within a period of six months from
the date of receipt of this judgment.â€
The Section 4 of the Act is as follows:- “Vesting of rights of grantee in Government and extinction of rights in grant.- Notwithstanding anything
contained in any law for the time being in force, or in any  contract or in any judgment, decree or order of any Court, with effect from the appointed
day,-
(i) The grant shall stand extinguished and any service or obligation attached to such land shall stand abolished; and the grantee shall have no liability to
perform any condition or obligation to render any service attached to such grant;
(ii) all rights, title and interest of the grantee in the forests or waste lands held by him, shall vest in the Government free from all encumbrances.â€
Bearing in mind the aforesaid observations, it would be noticed that under Section 4 of the Act, the grant was extinguished and any
service/obligation attached to such land stood abolished and the same was vested in the Government free from all encumbrances.
Now, adver ting to the oral and documentary evidence available on record, it would be noticed that plaintiff Mohinder Pal stepped into the witness
box as PW-9 and proved on record that he had been notified as Superintendent of Kutlehar Forests and in accordance with the terms and conditions
of the notification, he was to share the revenue income of the forests with the State Government. 3/4t h of the revenue income was to fall to his share
while remaining 1/4t h was that of Government. The arrangement was in force since the time of his forefathers and continued till 07.02.1996. The
prices of produce were fixed by the Pricing Committee of defendant No.3. On 03.02.1995 vide Ex. PW-3/A 1,33, 453 resin blazes were handed over
to defendant No.3 from Kutlehar Forests. On 14.02.1995, defendant No.3 vide Ex.PW-3/C issued tender notice. Thereafter, the amount despiteÂ
repeated demands/notice was not paid to him which constrained plaintiff to file a writ petition before this CourtÂ
and the same was dismissed and even SLP filed was dismissed constraining him to file the instant suit. In cross-examination, the plaintiff denied that
he had not been given the rights to manage the forests and stated that the services of the staff were taken over by the State only with effect from
07.02.1996. He denied having received 3/4th share in the forest produce of Kutlehar Forests as an employee or agent of the State. He also denied that
this amount was given to him as Superintendent of Kutlehar Forests.
PW-2 Abdul Wahid Khan produced copy of notification dated 18.05.1974 Ex.PW-2/A vide which Pricing Committee for Himachal Pradesh Forest
Corporation Ltd. was constituted. This notification was subsequently modified vide notification dated 28. 11.1988 Ex.PW-2/B. He further proved the
proceedings of the Pricing Committee held on 16.05.1988 vide Ex.PW-2/C and thereafter the proceedings of the Pricing Committee held on
25.04.1995 vide Ex.PW-2/D whereby for the year 1994 rate of `24/- per blaze was fixed and `26/- per blaze was tentatively fixed for 1995 tapping
season. He also proved on record the proceedings of the Pricing Committee held on 12.06.1991 vide Ex.PW-2/E whereby the rate of interest for
belated payments with effect from 1991-92 was fixed at the rate of 16.5%.
PW-3 Chander Bhushan Pandey, Divisional Manager, State Forest Corporation, proved letter Ex.PW-3/A dated 03.02.1995 addressed by the
plaintiff to the Divisional Manager, Una, whereby the plaintiff informed the Divisional Manager that 1,33,453 blazes would be available in 1995 tapping
season. He also proved on record letter dated 10.06.1995 vide Ex.PW-3/B whereby the aforesaid blazes were received and acknowledged by the
defendants. He further stated that public notice with regard to auction/tender of labour supply mate andtapping of resin blazes for the year 1995 was
issued on 14.02.1995 vide Ex.PW-3/C pursuant to which tenders were received and final tenders were accepted and royalty to the extent of
`34,73,366/- was payable to the plaintiff.
PW-4 Bhagi Rath, Assistant Manager, Himachal Pradesh State Forest Corporation, proved certificate Ex.PW-4/A dated
03.1995 vide which 1,33,453 resin blazes for tapping season 1995 were received from Kutlehar Forests.
PW-8 R.P. Kapila, Manager, State Bank of India, has proved the copies of circulars issued by the State Bank of India with regard to various rates
of lending by the Bank during 1995 vide Ex.PW-8/A to Ex.PW-8/C.
As against the evidence led by the plaintiff, the defendants examined D1W1 Kirpal Singh, Forest Ranger, who stated that resin extracted season is
from 15th February to 30th November every year. D1W2 Piare Lal, Senior Assistant, in the Office of Principal Chief Conservator of Forests proved
notification dated 10.03.1995 Ex. D1/A vide which 11.03.1995 was fixed as the appointed date on which the Act came into force. He also proved
order dated 10.03.1995 Ex.D1/B whereby the Divisional Forest Officer, Una, was authorized to enter upon the land/premises vested in the State
Government under Section 4 of the Act.
As noticed above, the claim of the plaintiff is being contested by the defendants only on the ground that after issuance of the notification plaintiff
had no interest left in the forests so as to claim decretal amount and that the plaintiff was not the owner of the forest land after the notification dated
10.03.1995. Therefore, there was no question of entering any contract as the plaintiff had no subsisting interest left in the forests.
As already observed above, the Hon’ble Supreme Court in its decision dated 26.10.2010 in Mahendra Pal’s case (supra) had categorically
observed that the plaintiff was asked to look after the forests produce as Superintendent and in lieu of salary he was assured grant of 3/ 4th that of the
resin blazes. The plaintiff continued as Superintendent of forests without a specific salary but with an assurance of 3/4t h of such resin blazes etc. till
the appointed day i.e. 11. 03.1995. It was further observed that it was not only specifically pleaded, but there was material placed on record by the
plaintiff about the work done such as maintenance, manuring, protecting the trees etc.. Therefore, the plaintiff was entitled for his legitimate dues till
such date i.e.11.03.1995.
It is not in dispute that the Corporation took over the resin blazes so offered by the plaintiff on 03.02.1995 and thereafter invited tenders for
undertaking tapping work on 14.02.1995 and the tenders were opened on 01.03.1995 at 2.30 p.m. Admittedly, by thi s time, the plaintiff had done the
work of maintenance, manuring, protecting of trees etc. and, therefore, was entitled to the amount received after tapping and the mere fact that the
forests came to be vested in the State Government under the Act in the interregnum has no force because by that time the plaintiff had not only put
inputs and maintained the forests, but even offered 1,33,453 resin blazes to the defendants. Not only this, further even the defendants had already
invited tenders on 14.02.1995. It is not in dispute that the defendants had infact extracted resin from above 1,33,453 resin blazes in the year1995
tapping season. Therefore, the plaintiff was entitled to the rate of `26/- per blaze that was fixed in the year 1995 tapping season as against `24/-, as
awarded by the learned Single Judge.
The learned Single Judge has erred in applying the rates of 1994 when admittedly the tapping season pertained to the year 1995 and was to be
governed by the said rate. Even the Hon’ble Supreme Court while remanding the matter has not negated the claim of the plaintiff, but has only
directed this Court to determine the quantum of amount. In this way, the plaintiff would be entitled to `26/- per blaze as against `24/- per blaze as
awarded by the learned Single Judge.
Now, remains the question of interest. It cannot be disputed that in case the plaintiff has been deprived of use of money, because of lapse or fault
of the defendants, to which he is otherwise legally entitled to, then he would have a right to be compensated for such deprivation which may be called
interest, compensation or damages etc.
A Constitution Bench of the Hon’ble Supreme Court  in Secretary, Irrigation Department, Government of Orissa and others versus
G.C.Roy (1992) 1 SCC 508, held that:- “43…(i) A person deprived of the use of money to which he is legitimately entitled has a right to be
compensated for the deprivation, call it by any name. It may be called interest, compensation or damages……. .â€
Black’s Law Dictionary (7th Edition) defines ‘interest’ inter alia as: “3. The compensation fixed by agreement or allowed by law
for the use or detention of money, or for the loss of money by one who is entitled to its use; especially, the amount owed to a lender in return for the
use of [the] borrowed money.â€
According to Stroud’s Judicial Dictionary of Words And Phrases (5th Edition) interest means, inter alia, compensation paid by the borrower to
the lender for deprivation of the use of his money.
The essence of interest in the opinion of Lord Wright, in Riches versus Westminster Bank Ltd., 1947 AC 390 : (1947) 1 All ER 469 (HL) (AC at
p.400: All ER at p.472-E-F) is that:- ‘…..it is a payment which becomes due because the creditor has not had his money at the due date. It may be
regarded either as representing the profit he might have made if he had had the use of the money, or conversely the loss he suffered because he had
not that use. The general idea is that he is entitled to compensation for the deprivation’; the money due to the creditor was not paid, or, in other
words, ‘was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a
compensation, whether the compensation was liquidated under an agreement or statute’.
At this stage, it may be relevant to note that the following observations made by a Division Bench of the High Court of Punjab in CIT versus
Dr.Sham Lal Narula AIR 1963 Punj 411 on the concept of ‘interest’ were duly approved by the Hon’ble Supreme Court in Dr.Sham Lal
Narula versus CIT, AIR 1964 SC 1878 and it was held as under:-
“8. The words “interest†and “compensation†are sometimes used interchangeably and on other occasions they have distinct connotation.
“Interest†in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to
another. In its narrow sense, “interest†is understood to mean the amount which one has contracted to pay for use of borrowed money…… In
whatever category “interest†in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in
demanding it, after it has fallen due, and thus, it is a charge for the use or forbearance of money. In this sense, it is a compensation allowed by law or
fixed by parties, or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become
payable.â€
In South Eastern Coalfields Ltd. Vs. State of M.P. and others (2003) 8 SCC 648, it was held that interest is also payable in equity in certain
circumstances. It was further observed that rule in equity is that interest is payable even in the absence of any agreement or custom to that effect
though subject, of course, to a contrary agreement. Applicability of the rule to avoid interest in equity is attracted when the existence of a state of
circumstances is established which justify the exercise of such equitable jurisdiction and such circumstances can be many. It is apt to reproduce
paragraphs 21, 24, 26 and 28 of the judgment, which reads thus:-
“21. Interest is also payable in equity in certain circumstances, me rule in equity is that interest is payable even in the absence of any agreement or
custom to that effect though subject, of course, to a contrary agreement (See: Chitty on Contracts, Addition 1999, Vol. II, Part 38-248, at page 712).
Interest in equity has been held to be payable on a market rate even though the deed contains no mention of interest. Applicability of the rule to award
interest in equity is attracted on the existence of a state of circumstances being established which justify the exercise of such equitable jurisdiction and
such circumstances can be many.
We are, therefore, of the opinion that in the absence of there being a prohibition either in law or in the contract entered into between the two
parties, there is no reason why the Coalfields should not be compensated by payment of interest for the period for which the consumers/purchasers
did not pay the amount of enhanced royalty which is a constituent part of the price of the mineral for the period for which it remainedunpaid. The
justification for award of interest stands fortified by the weighty factor that the Coalfields themselves are obliged to pay interest to the State on such
amount. It will be a travesty of justice to hold that though the Coalfields must pay the amount of interest to the State but the consumers/purchasers in
whose hands the money was actually withheld be exonerated from liability to pay the interest. Liability of the consumers/purchasers to pay interest to
the Coalfields: (b) for the period for which the restraint order passed by the Court remained in operation.
In our opinion, the principle of restitution takes care of this submission. The word 'restitution' in its etymological sense means restoring to a party
on the modification, variation or reversal of a decree or order, what has been lost to him in execution or decree or order or the court or in direct
consequence of a decree or order (See : Zafar Khan and Ors. v. Board of Revenue, U.P., and Ors., . In law, the term 'restitution' is used in three
senses; (i) return or restoration of some specific thing to its rightful o wner or status; (ii) compensation for benefits derived from a wrong done to
another; (iii) compensation or reparation for the loss caused to another. (See Black's Law Dictionary, Seventh Edition, p.1315). The Law of Contracts
by John D. Calamari & Joseph M. Perillo has been quoted by Black to say that 'restitution' is an ambiguous term, sometimes referring to the
disgorging of something which has been taken and at times referring to compensation for injury done: ""Often, the result in either meaning of the term
would be the same. ..... Unjust impoverishment as well as unjust enrichment is a ground for restitution. If the defendant is guilty of a non-tortuous
misrepresentation, the measure of recovery is not rigid but, as in other cases of restitution, such factors as relative fault, the agreed upon risks, and the
fairness of alternative risk allocations not agreed upon and not attributable to the fault of either party need to be weighed."" The principle of restitution
has been statutorily recognized in Section 144 of the Code of Civil Procedure, 1908. Section 144 of the C.P.C. speaks not only of a decree being
varied, Â reversed, set aside or modified but also includes an order on par with a decree. The scope of the provision is wide enough so as to include
therein almost all the kinds of variation, reversal, setting aside or modification of a decree or order. The interim order passed by the Court merges into
a final decision. The validity of an interim order, passed in favour of a party, stands reversed in the event of final decision going against the party
successful at the interim stage. Unless otherwise ordered by the Court, the successful party at the end would be justified with ail expediency in
demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against
it. The successful party can demand (a) the delivery of benefit earned by the opposite party under the interim order of the court, or (b) to make
restitution for what it has lost; and it is the duty of the court to do so unless it feels that in the facts and on the circumstances of the case, the
restitution would far from meeting the ends of justice, would rather defeat the same. Undoing the effect of an interim order by resorting to principles
of restitution is an obligation of the party, who has gained by the interim order of the Court, so as to wipe out the effect of the interim order passed
which, in view of the reasoning adopted by the court at the stage of final decision, the court earlier would not or ought not to have passed. There is
nothing, wrong in an effort being made to restore the parties to the same position in which they would have been if the interim order would not have
existed.
That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the 'act of the court' embraces within its
sweep all such acts as to which the court may form an opinion in any legal proceedings that the court would not have so acted had it been correctly
apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the Court being wrongful or a mistake or error
committed by the Court; the test is whether on account of an act of the party persuading the Court to pass an order held at the end as not sustainable,
has resulted in one party gaining an advantage which it would not have otherwise corned, or the other party has suffered an impoverishmentwhich it
would not have suffered but for the order of the Court and the set of such party. The quantum of restitution, depending on the facts and circumstances
of a given case, may take into consideration not only what the party excluded would have made but also what the party under obligation has or might
reasonably have made. There is nothing wrong in the parties demanding being placed in the same position in which they would have been had the
court not intervened by its interim order when at the end of the proceedings the court pronounces its judicial verdict which does not match with and
countenance its own interim verdict. Whenever called upon to adjudicate, the court would act in conjunction with what is the real and substantial
justice. The injury, if any, caused by the act of the court shall be undone and the gain which the party would have earned unless it was interdicted by
the order of the court would be restored to or conferred on the party by suitably commanding the party liable to do so. Any opinion to the contrary
would lead to unjust if not disastrous consequences. Litigation may turn into a fruitful industry. Though litigation is not gambling yet there is an element
of chance in every litigation. Unscrupulous litigants may feel encouraged to approach the Courts, persuading the court to pass interlocutory orders
favourable to them by making out a prima facie case when the issues are yet to be heard and determined on merits and if the concept of restitution is
excluded from application to interim orders, then the litigant would stand to gain by swallowing the benefits yielding out of the interim order even
though the battle has been lost at the end. This cannot be countenanced, we are, therefore, or the opinion that the successful party finally held entitled
to a relief assessable in terms of money at the end of the litigation, is entitled to be compensated by award of interest at a suitable reasonable rate for
the period for which the interim order of the court withholding the release of money had remained in operation.â€
Judged in the light of the aforesaid exposition of law, We are of the considered view that the ends of justice would be subserved in case the
plaintiff is awarded interest at the rate of 6% per annum from the date of institution of the suit i.e. 23.02.1998 till the date of payment. Ordered
accordingly.
In view of the above, OSA No.8 of 2011 is allowed in the aforesaid terms and a decree of `26,02,333.50/- as against `24,02,154/-, along with
interest at the rate of 6% per annum on the awarded amount, from the date of institution of the suit i.e. 23.02.1998, is passed in favour of the plaintiff.
Whereas, OSA No. 13 of 2011 is ordered to be dismissed, leaving the parties to bear their own costs. Pending application, if any, also stands disposed
of. Decree-sheet be prepared accordingly. Registry is directed to place a copy of this judgment on the file of connected matter.