CITIBANK N.A. versus HITEN P. DALAL & ORS.

Citation: [2015] 9 S.C.R. 583 · Decided: 21-08-2015 · Supreme Court of India · Bench: VIKRAMAJIT SEN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2015].9 S.C.R. 583 
CITIBANK N.A. 
A 
v. 
HiTEN P. DALAL& ORS. 
(Civil Appeal No.3580 of2005 etc.) 
AUGUST21, 2015 
B 
[VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.] 
Code of Civil Procedure, 1908 - s. 144 - Restitution of 
decree- Money decree in favour of the appellant and against c 
the respondent - Respondent was directed either to pay 
Rs. 50 crores or to deliver 9% /RFC Bonds of the face value 
of Rs. 50 crores alongwith 9% interest - Respondent opted 
to deliver the bonds alongwith interest-Appellants disposed 
of the bonds in the market, during March/April 1997, when 
D 
the prevailing market rate was Rs. 851- (face value of the bond 
being Rs. 1001- redeemable on 15. 7. 2001) - Subsequently 
the decree was reversed by Supreme Court - Demand of 
Rs. 135, 18, 28, 0531- by way of restitution -Appellant as per 
its own calculation tendered Rs.107, 75,40, 1411- before E 
Special Court - Application by appellant before Special 
Court for recording satisfaction of Supreme Court Judgment 
- Respondent's application, claiming to be entitled to further 
amount of Rs. 51. 83 crores- Special Court allowed additional 
sum of Rs. 30, 13, 55, 1751- to respondent- On appeal, held: F 
Power u/s. 144 has to be exercised to ensure equity, fairness 
and justice to both the parties- For ascertaining the value of 
the property which is no longer available for restitution, the 
Court should adopt realistic and verifiable approach instead 
of resorting to hypothetical and presumptive value - The 
G 
Special Court determined the amount for restitution, ignoring 
the relevant facts as to the value of the bonds on the date 
• 
when the bonds were handed over to the appellant or the 
583 
H 
584 
SUPREME COURT REPORTS 
[2015] 9 S.C.R. 
A 
date when the appellant sold them to the third party and by 
. presuming that the respondent would have retained the bonds 
with them till maturity -
The alternative calculation of 
Rs: 115, 08, 98, 8351- as suggested by the appellant is accepted 
- the respondents are directed to refund Rs.22, 14,36, 7561-
B to the appellant with 9% interest. 
Allowing the appeals, the Court 
HELD: 1. Section 144 of the CPC, vests expansive 
c power in the Court, but such power has to be exercised 
to ensure equity, fairness and justice for both the parties. 
It also flows from more or less common stand of parties 
on the principle of law that for ascertaining the value of 
the property which is no longer available for restitution 
o on account of sale etc., the court should adopt a realistic 
and verifiable approach instead of resorting to 
hypothetical and presumptive value. It is also one of the 
established propositions that in the context of 
restitution, the Court should keep under consideration 
E not only the loss suffered by the party entitled to 
restitution but also the gain, if any, made by other party 
who is obliged to make restitution. No unmerited injustice 
should be caused to any of the parties. [Para 19] [597-E-
H] 
F 
2. In the present case, in the course of finding out 
the value of the bonds which are no longer available for 
restitution, the Special Court committed a clear error of 
law in ignoring a relevant fact that the bonds in question 
G were a tradable commodity on the stock market and its 
value could be easily ascertained either on the date when 
the bonds were handed over to the appellant-Bank or at 
the time when the appellant-Bank sold the bonds to third 
parties. Such relevant facts shou.ld not have been lost 
H sight of and no presumption should have been made 
•
.. 
CITIBANK N.A. v. HITEN P. DALAL & ORS. 
585 
thatthe respondent would have retained the bonds with A 
it till the maturity period. [Para 20] [598-B~D] 
3. There are sufficient materials available to lend · 
credence to the view that in all eventuality, the 
respondent would have sold the bonds because it was B 
·· in such business and also because earlier when it had 
the option, it chose to hand over the bonds to the 
appellant~Bank instead of preferring the other option of 
paying its monetary value. Sale of the bonds by the 
appellant-Bank to third parties at a verifiable rate not C 
being under dispute, it is evidently unjust to saddle the 
appellant-Bank with liability to repay the possible gains 
made by the third party or subsequent purchasers of 
the bonds. Therefore, the amount determined by the 
Special Court for restitution and payment by the D 
appellant-Bank is unjust and is a result of error in not 
keepin
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