2005 Supreme(SC) 696

2005(3) Supreme 367
Supreme Court of India
(From Gujarat High Court)
R.C. Lahoti, CJI, G.P Mathur, J.
Sihor Nagar Palika Bureau —Appellant
versus
Bhabhlubhai Virabhai & Co. —Respondent
Civil Appeal Nos. 2799-2800 of 2005
(Arising out of SLP (C) Nos. 1446-1447 of 2004)
Decided on 21-4-2005
Counsel for the Parties :
For the Appellant : Sunil Gupta, Sr. Advocate, Jatin Zaveri and Prantap Kalra, Advocates.­
For the Respondent : Huzefa Ahmadi, Ejaz Maqbool, Nakul Dewan and Ms. Saloni Sinha, Advocates.

Important point
Order XLI Rule 1(3) and Rule 5 confer a discretion on appellate Court to direct either deposit of amount disputed in appeal or to permit such security as appellate Court may think fit.

Headnote:Civil Procedure Code, 1908—­Order XLI Rules 1(3) and 5—Money ­decree—Appeal—Discretion on appellate Court to direct either deposit of amount disputed in appeal or to ­permit such security in respect thereof as appellate Court may think fit—High Court had found a case for stay made out and question was whether to insist on deposit in cash or permit a security being furnished—Appellant had made out prima facie strong case for hearing in appeal and that public interest would be better served by amount being retained by appellant during pendency of appeal—Impugned order directing appellant to deposit an amount of Rs. 8,78,925 was liable to be set aside.

       Held : 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 Memo of Appeal filed by the appellant in the High Court, very many pleas have been raised. One of the grounds taken is that the decree has been passed by the Trial Court without availability of any legal evidence amounting to proof in favour of the respondent and hence the decree is ex-facie erroneous. The grounds urged in ­favour of the prayer for stay set out for the consideration of the High Court as an Appellate Court have been briefly noticed hereinabove. We do not propose to deal with the merits of the pleas so urged lest it should prejudice the hearing of the appeal in the High Court. Suffice it to observe that a case for grant of stay was made out even in the opinion of the High Court and the dispute which survived lay in a narrow compass: Whether to insist on deposit in cash or permit a security being furnished? In the facts and circumstances of the present case and having taken into consideration the respective submissions made by the learned counsel for the parties in very many details, we are satisfied to hold that the High Court ought to have permitted furnishing of security instead of insisting on deposit in cash of the amount as directed by the High Court. It is not the case of the respondent that in the event of the appeal being dismissed the decretal amount may not be recovered from the appellant. On the other hand, the appellant has made out a prima facie strong case for the hearing of the appeal on its merits and further a case that public interest would be better served by the amount being retained by the appellant during the pendency of the appeal. While making these observations, we should not be understood as having made any observation touching the merits of the case amounting to pre-judging any of the issues arising for decision in the appeal and ex abundanti cautela we clarify that the appeal shall be heard by the High Court on its own merits uninfluenced by anything said in this order. The appellant has already furnished security of immovable property to the satisfaction of the Trial Court pursuant to the order dated 31.2.2004 passed by this Court. (Paras 6 to 8)