Supreme Court: What conditions the Appellate court should impose while staying execution of money decree?

11. To the same effect is the decision of this Court in Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai & Co.   MANU/SC/0315/2005 : (2005)4SCC1 , wherein it was held:

6. Order XLI Rule 1(3) of the CPC provides that in an appeal against a decree for payment of amount the appellant shall, within the time permitted by the Appellate Court, deposit the amount disputed in the appeal or furnish such security in respect thereof as the Court may think fit. Under Order XLI Rule 5(5) a deposit or security, as abovesaid, is a condition precedent for an order by the Appellate Court staying the execution of the decree. A bare reading of the two provisions referred to hereinabove, shows a discretion having been conferred on the Appellate Court to direct either deposit of the amount disputed in the appeal or to permit such security in respect thereof being furnished as the Appellate Court may think fit. Needless to say that the discretion is to be exercised judicially and not arbitrarily depending on the facts and circumstances of a given case. Ordinarily, execution of a money decree is not stayed inasmuch as satisfaction of money decree does not amount to irreparable injury and in the event of the appeal being allowed, the remedy of restitution is always available to the successful party. Still the power is there, of course, a discretionary power and is meant to be exercised in appropriate cases.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 7410-7411 of 2008.

Decided On: 18.12.2008

Malwa Strips Pvt. Ltd. Vs. Jyoti Ltd.

Hon'ble Judges/Coram:

S.B. Sinha and Cyriac Joseph, JJ.

Author: S.B. Sinha, J.

Citation: AIR 2009 SC 1581.

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What principles the appellate court should follow while deciding stay application in appeal preferred against money decree?

11. To the same effect is the decision of this Court in Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai & Co., [MANU/SC/0315/2005 : 2005(2) RCR (Civil) 672 : (2005)4 SCC 1], wherein it was held:-

"6. Order 41 Rule 1(3) of the Civil Procedure Code provides that in an appeal against a decree for payment of amount the appellant shall, within the time permitted by the Appellate Court, deposit the amount disputed in the appeal or furnish such security in respect thereof as the Court may think fit. Under Order 41 Rule 5(5) a deposit or security, as abovesaid, is a condition precedent for an order by the Appellate Court staying the execution of the decree. A bare reading of the two provisions referred to hereinabove, shows a discretion having been conferred on the Appellate Court to direct either deposit of the amount disputed in the appeal or to permit such security in respect thereof being furnished as the Appellate Court may think fit. Needless to say that the discretion is to be exercised judicially and not arbitrarily depending on the facts and circumstances of a given case. Ordinarily, execution of a money decree is not stayed inasmuch as satisfaction of money decree does not amount to irreparable injury and in the event of the appeal being allowed, the remedy of restitution is always available to the successful party. Still the power is there, of course, a discretionary power and is meant to be exercised in appropriate cases."

 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

CR No. 5598 of 2023

Decided On: 09.01.2024

Sandeep Kumar Vs. Desh Raj and Ors.

Hon'ble Judges/Coram:

Sudeepti Sharma, J.

Citation:  MANU/PH/0526/2024.

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Kerala HC: Appellate court can only stay execution of decree and not stay the operation of the judgment

Going by the plain meaning of Order XLI Rule 5, it provides for only stay of the proceedings under a decree or stay of execution of the decree. The provision does not empower the appellate court to stay the operation of the judgment. Stay of operation of the judgment is not the same as staying the operation of the proceedings under a decree or staying the execution of a decree. An order staying the operation of the judgment will amount to staying the findings in the judgment, which cannot be done at the stage of admission.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

OP (C) No. 963 of 2021

Decided On: 01.11.2021

Raveendran Vs. Lalitha and Ors.

Hon'ble Judges/Coram: V.G. Arun, J.

Citation:  MANU/KE/2771/2021.

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Whether Filing Of Appeal Would Operate As A Stay Of Decree?

 Though, such contention is put forth by the respondents, keeping in view the provisions as contained in Order 41 Rule 5 of CPC, unless the appeal is listed and there is an interim order, the mere filing of the appeal would not operate as a stay. If that be so, the judgment and decree dated 25.08.2021 would enure to the benefit of the petitioner as on today and the rejection of the NOC only on the ground that the appeal has been filed, would not be justified. In that view, the High Court was also not justified in rejecting the petition.

IN THE SUPREME COURT OF INDIA

Special Leave to Appeal (C) No(s). 19038/2022 

SANJIV KUMAR SINGH Vs THE STATE OF BIHAR & ORS.

Coram: A.S. BOPANNA; J., HIMA KOHLI; J.

Dated: 24-01-2023

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When should appellate court suspend the operation of the order of lower court during pendency of appeal?

The petitioner alleges that the decree of the trial court entails serious civil consequences and that pursuant to the decree, the plaintiffs are purchasing the stamp papers with the intention of selling the property and consequently the defendant has approached the Court seeking protection of his rights.

2. Having heard the learned Counsel for the petitioner-defendant and having perused the record, this Court finds that where a statutory remedy of an appeal is available and where serious civil consequences follow from an order, it is imperative for the appellate court to suspend the operation of the order.

3. In Mool Chand Yadav and Anr. v. Raza Buland Sugar Co. Ltd., Rampur and Ors. 1983 AWC 121, the Supreme Court held that where orders are challenged in appeal which orders have serious civil consequences, the judicial approach required that during the pendency of the appeal, the operation of the order should be suspended more so when the appeal had been admitted.

IN THE HIGH COURT OF ALLAHABAD

Decided On: 19.12.2008

 Bhagwan Shankar Bajpayee  Vs. District Judge and Ors.

Hon'ble Judges/Coram:

Tarun Agarwala, J.

Citation: 2009(3) Civil court cases 429 ALL

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Whether the court should dismiss the civil appeal if the appellant fails to comply with the condition imposed for a stay of execution?

 We may, however, notice that although the provisions of Sub-rule (3) of Rule 1 of Order XLI have been held not to be mandatory, this Court in Kayamuddin Shamsuddin Khan v. State Bank of India MANU/SC/1336/1998 : (1998)8SCC676 opined that non-compliance of a direction to deposit the decretal amount or part of it or furnish security therefore would result in the dismissal of the stay application but not the entire appeal, stating:

8. This would mean that non-compliance with the direction given regarding deposit under Sub-rule (3) of Rule 1 of Order XLI would result in the Court refusing to stay the execution of the decree. In other words, the application for stay of the execution of the decree could be dismissed for such non-compliance but the Court could not give a direction for the dismissal of the appeal itself for such non-compliance.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 7410-7411 of 2008

Decided On: 18.12.2008

Malwa Strips Pvt. Ltd.  Vs. Jyoti Ltd.

Hon'ble Judges/Coram:

S.B. Sinha and Cyriac Joseph, JJ.

Citation: AIR 2009 SC 1581

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Whether appellate court should determine mesne profits for determining interim compensation while staying eviction decree?

 If this Court indulges in a threadbare analysis and judicially

determines the relative merits of the rival mesne profits reports at an

interlocutory stage—more so under Order 41, Rule 5 of CPC—that

preempts the trial Court’s legitimate adjudicatory powers under Order

20, Rule 12 of CPC. Here, what this Court intends, or requires, to do is

to use the “commonsense which is a cluster of life's experiences” rather

than depend on the rival facts presented by warring litigants.”

(g) Pragmatic Pursuit:

32. Indeed, any adjudication, if it were, under Order 41, Rule 5

of CPC involves an element of ad hocism, a permissible level of guess

work, and a dose of discretion. That provision is a step-in-aid in appeal

proceedings; it tries to keep both the rivals in the litigation on an even

keel. One has the reality of a decree; the other a possibility of its

reversal. The decree, say in an eviction suit, alters the characters of

parties. The tenant is no longer a tenant; he is, at best, an occupant.

And that occupation stands branded as unauthorised. The suspension

of the decree does not obliterate the judicial findings; it only keeps its

effect—its execution—at bay. So to have the legitimate judicial dictum

put on hold in the name of stay, the appellant needs to submit himself

to certain terms. The terms of, for example, paying monetary

compensation. A stay is not for mere asking. Nor can the appellant

paint himself a victim under Order 41, Rule 5 of CPC. That said, I

must also acknowledge that the appellate courts will not lose sight of

the distinction between what is ideal and what is practical; what is

discretionary and what is arbitrary; what is a fair guess and what is a

wild whim.

33. With judicial overload, docket explosion, and clogging

adjudicatory avenues at every echelon, we cannot expect a mini-trial

even under Order 41, Rule 5 of CPC, for fixing, say, an interim

compensation. It is ideal. But with the litigious multitude knocking at

the court’s doors clamouring for speedy justice, it is an unaffordable

legal luxury.

34. Here, in the revision, the appellant cannot insist on

reappreciation of his case on merits. This Court can only examine the

jurisdictional errors, if any, committed by the Appellate Bench.

Therefore, the tenant seeking to stall the execution of a decree from a

final court of fact has more burden to bear.

(h) The Result:

35. So, I reckon this Court’s interim arrangement needs no

interference, for this adjudication under Order 41, Rule 5 of CPC has no trappings of a judicial determination of mesne profits under Order

20, Rule 12 of CPC. The tenant will continue to pay Rs.25,000/- per

month to have the decree stayed, and the eviction stalled. Between the

two extremes of Rs.71,500/- per month and Rs.12,846/-, as projected

by the landlords and tenant respectively, my altering the figure

Rs.25,000/- can be nothing more than a cosmetic consideration. This

interim arraignment does not prevent the landlords from invoking

Order 20, Rule 12 of CPC. In that event, both the rival contenders can

invite a reasoned order from the trial Court.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

CIVIL REVISION APPLICATION (ST.) NO.33250 OF 2018

Previn Govind Sharma Vs  Dinyar Jal Jamshedji

CORAM : DAMA SESHADRI NAIDU, J.

DATE : 21st JUNE 2019.

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Bombay HC: Scope of inquiry for grant on interim compensation while granting stay to eviction decree

This Court in Previn Govind Sharma v. Dinyar Jal Jamshedji  Decided on 21st June 2019 has

considered the issue in detail. After examining the above decisions besides others, it

has held that this Court under Order 41, Rule 5 CPC does not fix mesne profits per

se. If this Court indulges in a threadbare analysis and judicially determines the

relative merits of the rival mesne profits reports at an interlocutory stage—more so

under Order 41, Rule 5 of CPC—that preempts the trial Court’s legitimate

adjudicatory powers under Order 20, Rule 12 of CPC. Here, what this Court

intends, or requires, to do is to use the “commonsense which is a cluster of life's

experiences” rather than depend on the rival facts presented by warring litigants.”

Pragmatic Pursuit:

29. Then, Previn Govind Sharma has recorded what could be a pragmatic

approach. Indeed, any adjudication, if it were, under Order 41, Rule 5 of CPC

involves an element of ad hocism, a permissible level of guesswork, and a dose of

discretion. The interim compensation, I may note, is to ensure that neither party

gets an unfair advantage over the other. Either too high an amount or too low an

amount as compensation prejudices one or the other party. The whole endeavour

under Order 41, Rule 5 of CPC is to keep the rival parties on an even keel. It is a

balancing act between the competing interests of a party who secured a decree and a

party who entertains the hope of emerging successful in the appeal proceedings.

30. Order 41, Rule 5, we may note, is a step-in-aid in appeal. The respondent

has the reality of decree; the appellant the possibility of its reversal. The decree, say  in an eviction suit, alters the characters of parties. The tenant is no longer a tenant;

he is, at best, an occupant. And that occupation stands branded as unauthorised.

The suspension of the decree does not obliterate the judicial findings; it only keeps

its effect—its execution—at bay. So to have a binding decision put on hold in the

name of stay, the appellant needs to submit himself to certain terms. The terms of,

for example, paying monetary compensation.

31. If we continue in the same vein, a stay is not for mere asking. Nor can the

appellant paint himself a victim under Order 41, Rule 5 of CPC. That said, I must

also acknowledge that the appellate courts will not lose sight of the distinction

between what is ideal and what is practical; what is discretionary and what is

arbitrary; what is a fair guess and what is a wild whim.

32. With the judicial overload, docket explosion, and clogging adjudicatory

avenues at every echelon, we cannot expect a minitrial even under Order 41, Rule 5

of CPC, for fixing, say, an interim compensation. It is ideal. But with the litigious

multitude knocking at the court’s doors clamouring for speedy justice, it is an

unaffordable legal luxury.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO.13100 OF 2018

Ishwarlal Vrajlal Mistry vs.  Manohar U. Shetty

CORAM: DAMA SESHADRI NAIDU, J.

JUDGMENT DATE: 18th December 2019

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Supreme Court: Money decree can be stayed in exceptional cases

 Even if the said provision is not mandatory, the purpose for which such a provision has been inserted should be taken into consideration. An exceptional case has to be made out for stay of execution of a money decree. The Parliamentary intent should have been given effect to. The High Court has not said that any exceptional case has been made out. It did not arrive at the conclusion that it would cause undue hardship to the respondent if the ordinary rule to direct payment of the decreetal amount or a part of it and/or directly through the judgment debtor to secure the payment of the decreetal amount is granted. A strong case should be made out for passing an order of stay of execution of the decree in its entirety.

Supreme Court of India

M/S.Malwa Strips Pvt.Ltd. vs M/S.Jyoti Ltd. on 18 December, 2008

Bench: S.B. Sinha, Cyriac Joseph.

Author: S.B. Sinha, J.

Citation: AIR 2009 SC 1581.

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