In an appeal against a money decree, an appellate court granting a stay of execution under Order XLI Rule 5(3) must ensure that the appellant provides sufficient security for the entire decree amount, rather than merely ordering a partial deposit.

ORDER

The petitioner has challenged Ext.P6 order of the Principal District Court, Thrissur in I.A No.1/2024 in AS No.101 of 2024 and seeks a direction to deposit the entire arrears of rent due till date and also prayed for early disposal of AS No.101 of 2024.

2. The petitioner had filed O.S No.182/2016 seeking a mandatory injunction directing the respondent to vacate the plaint schedule property and for recovery of rent arrears. The suit was decreed on 27.09.2024. The petitioner thereafter filed E.P No.1796/2024 on 13.09.2024. The respondent challenged the decree in AS No.101/2024 before the District Court, Thrissur. By order dated 22.11.2024, the District Court granted stay of execution on condition that the respondent deposits a sum equivalent to 25% of the decree amount within 45 days from the date of the order.

3. According to the petitioner, the Court should have directed the entire amount to be deposited. The learned counsel for the petitioner relied on the decision of the Hon’ble Supreme Court in Bijay Kumar Manish Kumar Huf v. Ashwin Bhanulal Desai [2024 KHC OnLine 6306] and the judgment of the learned Single Judge of this Court in Pramod v. Secretary, The Sultanpet Diocese Society [2024 (6) KHC 321] in support of his arguments.

4. According to the petitioner in suits for arrears of rent, where the landlord has been deprived of rent for a considerable period of time, the tenant ought to be directed to deposit the entire arrears of rent. The Hon’ble Supreme Court in Bijay Kumar (supra) has held that even though the right to appeal is statutory, the prayer for grant of stay has to be dealt with by exercising the equitable discretion of the Appellate Court and while ordering stay, the appellate court has to be alive to the fact that it is depriving the successful landlord for the fruits of the decree and is postponing the execution of the order for eviction. The Court held that there is every justification of the appellate court to put the appellant tenant on terms and direct the appellant to compensate the landlord by payment of a reasonable amount which is not necessarily the same as the contractual rate of rent. The Hon’ble Supreme Court in that case has directed the tenant to deposit the arrears of rent and the Registry was directed to place the amount received in a short -term, interest – bearing fixed deposit. The Hon’ble Supreme Court was not considering the provision contained in Order XLI, which provides for furnishing of security in an appeal against a money decree. In Pramod (Supra), it was held by the learned Single Judge that in adjudicating the question as to whether the agreed rent has been paid or not, the Civil Courts will be guided by the principles of Section 12 of the Kerala Buildings (Lease and Rent Control) Act, 1965, and the right of the lessee to hold the property under the contract arises and continues if and only if the lessee pays the rent reserved in the lease.

5.In the impugned order, the first appellate court has granted stay of execution of the judgment and decree and as far as the decree regarding the realisation of money is concerned, the Court had directed to deposit of a sum equivalent to 25% of the decree amount. The order says that it is an order passed under Order XLI Rule 5(3).

6.Order XLI Rule 5(3) says that no order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the Court making it is satisfied that substantial loss may result to the party applying for stay of execution unless the order is made, that the application has been made without unreasonable delay, and that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him. The sub-rule does not speak of security for a portion of the decree amount. Order XLI Rule 1 (3) says that where an 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 th