The declaration in Rule 5(1) of Order XLI C.P.C. that mere pendency of appeal will not operate as stay would come into effect only with respect to execution proceedings based on a decree or any step taken to get it executed.

Headnote:
EXECUTION - STAY OF EXECUTION - ORDER XLI RULE 5(1) C.P.C. - [STAY OF EXECUTION OF DECREE] - The declaration in Rule 5(1) of Order XLI C.P.C. that mere pendency of appeal will not operate as stay would come into effect only with respect to execution proceedings based on a decree or any step taken to get it executed. The amount admittedly released by the Sub Court to the fourth defendant by taking advantage of the aforesaid declaration before the initiation of any execution proceedings amounts to misconception of the provision and is totally illegal.
Fact of the Case:

The trial court had committed serious mistakes by passing a common decree and judgment in two suits for recovery of amount based on divergent claims raised by the respective plaintiffs. The trial court had also released the entire amount in deposit in one suit to the fourth defendant in the suit on an interlocutory application, even though he was not a decree holder in that suit. The amount was deposited in discharge of the decree in that suit on the reason that according to the first defendant, the plaintiffs in that suit were entitled to the amount and not by the fourth defendant in that suit. The trial court had released the amount without initiating any execution proceedings by the fourth defendant based on a decree passed in his favour in the connected suit. The trial court had also released the amount without ordering sufficient security or any security at all.
Finding of the Court:

The trial court had committed serious laches and had violated all the basic principles of law and provisions by releasing the amount deposited in discharge of the decree in one suit to a person who was not a decree holder in that suit. The trial court had also committed a mistake by passing a common decree and judgment in two suits for recovery of amount based on divergent claims raised by the respective plaintiffs. The trial court had also committed a mistake by releasing the entire amount in deposit in one suit to the fourth defendant in the suit on an interlocutory application, even though he was not a decree holder in that suit.
Issues: Whether the trial court had committed serious laches and had violated all the basic principles of law and provisions by releasing the amount deposited in discharge of the decree in one suit to a person who was not a decree holder in that suit.
Ratio Decidendi: The declaration in Rule 5(1) of Order XLI C.P.C. that mere pendency of appeal will not operate as stay would come into effect only with respect to execution proceedings based on a decree or any step taken to get it executed. The amount admittedly released by the Sub Court to the fourth defendant by taking advantage of the aforesaid declaration before the initiation of any execution proceedings amounts to misconception of the provision and is totally illegal.
Final Decision: The appeal is allowed accordingly. No costs.

JUDGMENT

Heard both sides. An execution petition was dismissed by the Court recording satisfaction of the decree in O.S.No.401/2013, against which the decree holder came up in appeal.

2. Very serious questions came up for consideration based on the laches on the part of the court at various stages of a litigation. (i) At first, the court below has committed a very serious mistake by passing a common decree and judgment in both the suits for recovery of amount based on divergent claims raised by the respective plaintiffs. The dispute in both the suits is with respect to the entitlement of amount stands in the name of a deceased predecessor-in-interest with the first defendant- LIC of India. The claim for the very same amount by two sets of plaintiffs in two suits - O.S.No.401/2013 and O.S.No.348/2013 were decreed by the trial court under a common decree and judgment, thereby the first defendant was mulcted with the liability of paying double the amount due with interest. In fact, two inconsistent mutually destructive decrees were granted by the then Sub Judge, that too, by way of a common decree and judgment. Sheer negligence on the part of the trial court is well evident and the trial court even did not understand the very nature of the claim raised by the respective parties to the suit.

(ii) After the passing of both the decrees, the then Sub Judge (yet another officer) had released the entire amount in deposit in O.S.No.401/2013 (Rs.10 lakhs with interest) to the fourth defendant in the suit on an interlocutory application.

(iii) It was given to the fourth defendant though he is not a decree holder in that suit. The amount was deposited in discharge of the decree in O.S.No.401/2013 on the reason that according to the first defendant, the plaintiffs in that suit are entitled to the amount and not by the fourth defendant in that suit. Instead of giving the said amount in deposit to the decree holder in that suit in satisfaction of the decree, it was given to the fourth defendant for the reasons best known to the officer concerned.

(iv) The said amount was given to the fourth defendant without initiating any execution proceedings by the fourth defendant based on a decree passed in his favour in the connected suit in O.S.No.348/2013. In fact, the abovesaid amount was deposited by the first defendant not in that suit and not in discharge of a decree that may be passed in that suit. It is the amount deposited in another suit, in which a decree was passed by way of satisfaction of the decree amount.

(v) The amount in deposit in a particular suit i.e.

O.S.No.401/2013 was given to fourth defendant (plaintiff in another suit) overlooking the decree passed in that suit.

(vi) It was released on an interlocutory application by the fourth defendant after the grant of decree in favour of the plaintiff in that suit.

(vii) It was released after noticing pendency of two appeals against the common decree and judgment passed by the trial court (divergent decrees).

(viii) It was released simply on the ground that the pendency of appeal may not operate as stay of proceedings.

(ix) It was released to the fourth defendant without ordering sufficient security or any security at all. The minimum requirement to safeguard the interest of the decree holder in that suit or to protect the amount deposited in discharge of that decree was not fulfilled and it was given to a person, who is not a decree holder in that suit, that too, without ordering any security and without taking any caution or precautionary measure and thereby violated all the basic principles of law and provisions.

(x) The fact that two mutually destructive inconsistent decrees were passed based on the divergent claims overlooking all the settled principles was not even considered by the trial court at the time when the amount was released to a person who is not a decree holder in that suit.

(xi) No sufficient reason much less any reason was raised by the trial court as to why the amount deposited i

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