Section 144 CPC:
144. Application for restitution – (1) 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 Court which passed the decree or order shall, on the application of any party entitled in any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree or order or such part thereof as has been varied, reversed, set aside or modified; and, for this purpose, the Court may make any orders, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly consequential on such variation, reversal, setting aside or modification of the decree or order.
The scope of post 1976 amended Section 144 CPC has been considered by this Court in Neelathupara Kummi Seethi Koya Phangal (Dead) by LRs v. Montharapalla Padippua Attakoya & Ors. [1995 (Suppl. 3) SCC 760] in paragraph 3 as under:
“3. In the 1976 Amendment Act suitable amendment was made and Explanations (a) to (c) were added but they have no relevance for the purpose of the case. The question therefore, is whether the transferee executing court is a “court of first instance” within the meaning of Section 144(1) CPC. A bare reading of subsection (1) does indicate that the application for restitution would lie when the decree executed is reversed or varied or modified. The doctrine of restitution is based upon the high cardinal principle that the acts of the court should not be allowed to work in injury or injustice to the suitors. Section 144, therefore, contemplates restitution in a case where property has been received by the decreeholder under the decree, which was subsequently either reversed or varied wholly or partly in those proceedings or other proceedings. In those set of circumstances law raised an obligation on the party that received the benefit of such reversed judgment to restitute the property to the person who had lost it. In that behalf in subsection (2) a right of suit was taken out and an application under subsection (1) was contemplated for execution of the decree by way of restitution. Subsection (1) clearly indicates that it is a “court of first instance” in which the proceedings in the suit had been initiated and a decree was passed or the suit was dismissed, but subsequently on appeal decreed or vice versa. The court of first instance would, therefore, mean the court which passed the decree or order. The transferee executing court is not the court that passed the decree or order, but the decree was transmitted to facilitate execution of that decree or order since the property sought to be executed or the person who is liable for execution is situated or residing within the jurisdiction of that executing court. Therefore, the court which is competent to entertain the application for restitution is the court of first instance i.e. Administrator’s Court (Subordinate Judge) that decreed the suit, and not the court to which the decree was transmitted for execution. The court of first instance of the administrator is now designated as Court of Subordinate Judge, but application for restitution was filed in executing court, namely, the Court of District Munsif at Androth. Thus in the face of the language of Section 144, the District Munsif at Androth, by no stretch of imagination be considered to be court of first instance. Its order of restitution is without jurisdiction and, therefore, it is a nullity. The High Court is accordingly right in its conclusion that the order for restitution is clearly vitiated by error of law and lack of jurisdiction. We do not find any ground warranting interference. The appeal is dismissed, but in the circumstances without costs.”
It has been further considered by other coordinate Bench of this Court in the recent past in Murti Bhawani Mata Mandir Rep. Through Pujari Ganeshi Lal (D ) Through LR Kailash v. Rajesh & Ors. [2019 (3) SCC 707] as under:
“Section 144 applies to a situation where a decree or an order is varied or reversed in appeal, revision or any other proceeding or is set aside or modified in any suit instituted for the purpose. In that situation, the Court which has passed the decree may cause restitution to be made, on an application of any party entitled, so as to place the parties in the position which they would have occupied but for the decree or order or such part thereof as has been varied, reversed, set aside or modified. The court is empowered to pass orders which are consequential in nature to the decree or order being varied or reversed.”
It clearly transpires that Section 144 applies to a situation where a decree or order is varied or reversed in appeal, revision or any other proceeding or is set aside or modified in any suit instituted for the purpose. The principle of 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 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 all that has been done under the decree which has been set aside or an order is varied or reversed and the Court in making restitution is bound to restore the parties, so far as they can be restored, to the same position as they were in at the time when the Court by its action had displaced them.