1. Both the appeals are filed by the State of Kerala against two money decrees obtained by the same set of persons in two suits for declaration and mandatory injunction directing the defendant State to refund money deposited as bid amount and duty in Abkari auctions. The two C. M. Ps. are for stay of execution. A learned judge of this Court ordered interim stay and notice in both the petitions. The petitions came up for hearing at the instance of the respondents. They wanted the State in both appeals to be directed under 0.41, R.1(3) of the Civil Procedure Code to deposit the entire decree amount. 0.41, R.1(3) reads -

"(3) Where the appeal is against a decree, for payment of money, the appellant shall, within such time as the Appellate Court may allow, deposit the amount disputed in the appeal or furnish such security in respect thereof as the Court may think fit "

2. Mr. K. P. Dandapani on behalf of the respondents said that under 0.41, R.1(3) deposit of the amount disputed in the appeal or furnishing security in respect thereof is mandatory for the maintainability of an appeal when it is against a decree for payment of money. He cited two decisions in support of his contention. I do not think that the argument is sound. Before dealing with that argument I think it is necessary to refer to two other provisions. 0.41, R.5 says:

"5. Stay by Appellate Court. (1) An appeal shall not operate as a stay of proceedings under a decree or order, appealed from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the Appellate Court may for sufficient cause order stay of execution of such decree.

Explanation - An order by the Appellate Court for the stay of execution of the decree shall be effective from the date of the communication of such order to the Court of first instance, but an affidavit sworn by the appellant, based on his personal knowledge, stating that an order for the stay of execution of the decree has been made by the Appellate Court shall pending the receipt from the Appellate Court of the order for the stay of execution or any order to the contrary, be acted upon by the Court of first instance

(2) Stay by Court which passed the decree.- Where an application is made for stay of execution of an appealable decree before the expiration of the time allowed for appealing therefrom, the Court which passed the decree may on sufficient cause being shown order the execution to be stayed.

(3) No order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the Court making it is satisfied -

(a) that substantial loss may result to the party applying for stay of execution unless the order is made;

(b) that the application has been made without unreasonable delay; and

(c) that security has been given by the appellant for the due performance of such decree or order as may ultimately be binding upon him.

(4) Subject to the provision of sub-rule (3), the Court may make an ex parte order for stay of execution pending the bearing of the application.

(5) Notwithstanding anything contained in the foregoing sub-rules, where the appellant fails to make the deposit or furnish the security specified in sub-rule (3) of rule I, the Court shall not make an order staying the execution of the decree."

3. According to sub-rule (3) three conditions are to be satisfied before ordering stay of execution. Third condition of which alone we are concerned here is that security has been given by the applicant for the due performance of decree or order as may ultimately be binding upon him R.6 also deals with security but we are not concerned with it because it relates to an order for execution of decree from which an appeal is pending. Under sub-rule (4) of R.5 the Court can make even an ex parte order provided the conditions of sub-rule (3) are satisfied. If these conditions are satisfied and if there is sufficient cause, it is wi