Order 27 Rule 8A exempts the Government from furnishing security for stay of execution, and the provisions of Order 41 Rule 1(3) are directory, not mandatory.

S. Sankarasubban, J.

The above I.A. is filed by the State to stay all further proceedings in pursuance to the execution petition filed in O.S.No.150 of 1997 of the Sub Court, Kottayam. F.A.No.384 of 2003 is filed by the State represented by the District Collector, Kottayam against the judgment and decree in O.S.No.150 of 1997. The suit was filed by the respondents for damages for breach of contract. An amount of Rs.12,16,667.50 has been decreed in favour of the plaintiffs. It is against the above judgment and decree that this appeal is filed.

2. When the matter came up for hearing, we heard learned Government Pleader for the appellant and Sri.Bechu Kurian Thomas learned counsel for the respondents. Learned Government Pleader submitted that the State is entitled to get an order of stay without providing security in view of Order 27 Rule 8A of C.P.C. On the other hand, Sri. Bechu Kurian Thomas submitted that the Court has a discretion in this matter and the Court can direct the State to deposit a portion of the amount. He further submitted that Order 27 Rule 8A is enacted on the assumption that all the State Governments are solvent. He submitted that the Court can take notice of the fact that the Government has itself admitted that it is not able to discharge the liabilities and many cheques issued by the Government were not encashed for a long time.

3. Order 27 Rule 8A clearly states that no, such security as is mentioned in Rules 5 and 6 of Order XLI shall be required from the Government or, where the Government has undertaken the defence of the suit, from any public officer sued in respect of an act alleged to be done by him in his official capacity. Order 41 Rule 5 enables the Appellate Court to grant stay. Learned Government Pleader brought to our notice the decision in Collector, Cuttack v. Padma Charan Mohanty – 1980 Cuttack Law Times Vol. 50 page 191 In that decision, it has been stated as follows:

“Introduction of sub-rule (3) of Rule 1 and sub-rule (5) of Rule 5 of Order 41 has not affected the privilege of exemption from furnishing security so far enjoyed by the Government. Sub-rule (3) of rule 1 for the first time, by the Amendment of 1976, imposed an obligation on the appellant is appealing from a decree for payment of money, either to deposit the amount in dispute in appeal or to furnish such security in respect thereof as the Court may direct. By introducing sub-rule (5) of rule 5 of Order 41, the Legislature purported to reiterate the position that where the appeal is against a decree for payment of money the appellant must deposit the amount in dispute in appeal or furnish security notwithstanding anything contained in sub-rules (1), (3) and (4) of rule 5. Rule 8A of Order 27, however, provides an exception. It states that no such security as is in rules 5 and 6 of Order XLI shall be required from the Government. Sub-rule (5) of rule 5 expressly mentions furnishing of security as specified in sub-rule (3) of rule 1. So rule 5 mentions about security under sub-rule (3) (c) of rule 5. Therefore, even though security is required under sub-rule (3) of rule 1 from the appellant, whoever he may be, that security having been mentioned in sub-rule (5) of rule 5 cannot be required to be furnished by the Government by reason of rule 8A of Order 27, Civil Procedure Code”.

It is also stated thus: “Security is generally required to be furnished where the appellant’s solvency is doubtful and to secure the fruits of litigation to the respondent in the event of his ultimate success. The solvency of the Government cannot ever be in doubt. It is in that view that Rule 8A of Order 27 was first introduced as a part of Order 41 and has been retained as a part of Order 27 irrespective of amendment of rules 1 and 5 by the 1976 amendment”. Learned counsel for the respondents cited U.P. Avas Evam Vikas Parishad, Lucknow v. Satya Prakash and Others 1997 AIHC 3266 Allahabad. That was concerning with an award passed under the Land A