Code of Civil Procedure, 1908 – Or.XLI, r.5 – Stay by Appellate Court – Interpretation:
Held: Although, Or.XLI r. 5 uses the word “shall”, yet a combined reading of the sum and substance of rr.1(3) and 5(5) would reveal, that for the grant of stay of execution, it is not mandatory for the appellate court to impose a condition for deposit of the amount in dispute – Appellate court, for the grant of stay of execution, has a discretion to impose a condition of deposit of the amount depending on the facts and circumstances of each case – A deposit is not a condition precedent for an order of stay of execution of the decree by the appellate court – The only guiding factor and statutory mandate, for the grant of such stay of execution as indicated in r.5, is the existence of “sufficient cause” in favour of the appellant, on the availability of which the appellate court would be inclined to pass an order of stay – For the grant of benefit of an unconditional stay of execution of a decree, an exceptional case has to be made out before the appellate court – This discretion of the appellate court to grant an unconditional stay of execution of decree must not be exercised arbitrarily – It must be exercised sparingly and only if an exceptional case is made out for such stay in view of the peculiar facts and attending circumstances of the case before it – In the present case, the High Court looked into various relevant aspects for the purpose of granting benefit of unconditional stay of execution of money decree viz., that the suit had proceeded in the absence of the respondent herein; there were no pleadings of infringement against the respondent herein; no pleadings for the purpose of claiming Rs. 3,36,02,87,000/- towards damages; Single Judge had recorded no findings as regards the role of the respondent herein in the alleged infringement – No error committed by Division Bench in passing the impugned judgment, upheld. [Paras 134 VI-VIII, 125-129]
Code of Civil Procedure, 1908 – Or.XLI, r.5 – “exceptional case” for granting benefit of unconditional stay of the execution of money decree:
Held: A case within the purview of “exceptional case” for the purpose of granting benefit of unconditional stay of the execution of money decree by the appellate court would be, if the money decree in question- (i) is egregiously perverse; (ii) is riddled with patent illegalities; (iii) is facially untenable; and/or (iv) such other exceptional causes similar in nature. [Paras 134, 82-87] Code of Civil Procedure, 1908 – Or.XLI – Grant of benefit of stay of execution of a decree by an appellate court – Law w.r.t, summarized. [Para 134]
Code of Civil Procedure, 1908 – Or.XLI, r.5:
Held: For the purpose of the grant or refusal of stay of execution of the decree under r.5 of Or.XLI, it is immaterial whether the decree is a money decree or any other decree – Or.XLI, r.5 makes no distinction between a money decree and other decrees, and the said provision applies with full rigour in both instances – Yet as a rule of prudence and established practice evolved over a period of time, no stay of execution of a money decree should be granted, except on the condition that the decretal amount be deposited in the court – However, such condition for deposit is not mandatory and non-prescription thereof does not operate as a bar to staying the execution of a money decree – Further, there is no provision u/Or.XLI, r.5 imposing a mandate to deposit cash security as the only mode of security for execution of the decree – Security, for the purpose of the said provision, can be in the shape of property, bond and or in the form of an appropriate undertaking from the appellant to abide by the decree, seeking stay of execution. [Para 134 X, XI]
Code of Civil Procedure, 1908 – Or.XLI r.1(3) – Obligation under – Nature – Mandatory or directory:
Held: Though Or.XLI r.1(3) is couched with the expression “shall” but, obligation under Or.XLI r.1(3) is not mandatory but directory in nature – Failure to comply with the same shall not result in rejection of the appeal, but would disentitle the appellant the benefit of stay of execution of the money decree. [Paras 62, 63] Interpretation of Statute – Code of Civil Procedure, 1908 – Or.XLI, rr.5(1), (3) – Interpretation of a provision of a statute – Principles to be followed, enumerated. [Paras 55-70] Code of Civil Procedure, 1908 – Second Proviso to Or.IX r.13 – Service of Summons and Irregularity in the Service of Summons – Plea of the petitioners that in view of the second Proviso to Or.IX r.13, the defendant could be said to have had the requisite “knowledge” of the date of hearing and sufficient time to appear and the delivery of suit papers and the order granting ex parte injunction dated 12.10.2020 could be said to be valid service of summons:
Held: No merit in the said submission – Second Proviso to Or.IX r.13 would come into play only when there is “irregularity” in the service of summons (for instance, the publication in wrong newspaper, no acknowledgment on duplicate summons being received etc) – In the present case, prima facie there was nothing on record to establish valid service of “summons” – If that be so, the second Proviso would not come into play. [Paras 89, 90] Words and Phrases – Code of Civil Procedure, 1908 – Or.XLI, r.5 – “sufficient cause” – Meaning and import of, explained. [Paras 78, 80-70]
Arbitration and Conciliation Act, 1996 – s.36(3) – Code of Civil Procedure, 1908 – Or.XLI, r.5 – Plea of the plaintiffs that courts cannot grant the benefit of unconditional stay of an award in cases other than those covered by the second Proviso to s.36(3) and when it comes to staying a money decree unconditionally, the judgment-debtor needs to make out more than a prima facie case of fraud or corruption, or something analogous to the same, and it is just not sufficient to point out serious infirmities in the judgment granting money decree: Held: It is difficult to accept the submission that even for the purpose of grant of benefit of unconditional stay of money decree under Or.XLI r.5, the judgment-debtor has to make out more than a prima facie case of fraud or corruption and not solely on the basis of an extreme or egregious view on the merits of the adjudication – The analogy of s.36, Arbitration Act sought to be applied is inappropriate – The decision of this Court in Pam Developments should also be understood and confined only to matters relating to arbitration, more particularly, s.36, Arbitration Act – If fraud or corruption or something analogous to the same is only to be seen for the purpose of granting benefit of unconditional stay of execution of money decree then in such circumstances, the decree holder may argue that although there may not be a valid service of summons to the defendant/judgment-debtor yet, the same by itself would not be sufficient to grant the benefit of unconditional stay of execution of money decree. [Paras 122-124]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.