By: Dhruv Tripathi

Stay on Execution of Decree

INTRODUCTION

Rule 5 provides for stay of an execution of a decree or an order. After an appeal has been filed, the appellate court may order stay of proceedings under the decree or the execution of such decree.

Execution Proceedings Under CPC

In Ghan Shyam Das v Anant Kumar Sinha dealing with the provisions of the Code relating to execution of decrees and orders the SC stated, “So far as the question of executability of a decree is concerned, the CPC contains elaborate and exhaustive provisions for dealing with it in all its aspects. The numerous rules of Order 21 of all the Code take care of different situations providing effective remedies not only to judgment-debtors and decree-holders but also to claimant objectors, as the case may be.

OBJECT

The object underlying Rule 5 is to safeguard the interests of both:

Decree-Holder

Judgment- Debtor

It is the right of the decree-holder to reap the fruits of his decree.

Similarly, it is the right of the judgment-debtor not merely to get barren success in case his appeal is allowed by the appellate court.

This rule thus strikes a just and reasonable balance between these two opposing rights.

CONDITIONS

The following conditions must, therefore, be satisfied before stay is granted by the court [Rule 5 (3),(4)] :

a) The application has been made without unreasonable delay;

b) Substantial loss will result to the applicant unless such order is made; and

c) Security for the due performance of the decree or order has been given by the applicant.

The court may also make an ex-parte order for stay of execution pending the hearing of the application if the above conditions are satisfied.

Rule 3-A(3) lays down that the court shall not grant stay of the execution of a decree against which an appeal is proposed to be filed so long as the court does not, after hearing under Rule 11, decide to hear the appeal on merits.

In case of money decree, sub-rule (3) of Rule 1 as inserted by the Amendment Act, 1976 provides for the deposit of the decretal amount or for the furnishing of security.

Sub-rule (5) of Rule 5 as added in 1976 mandates that no stay of execution of a decree shall be granted unless the deposit is made or security is furnished.

Explanation to Rule 5(1) clarifies that the order of stay becomes effective from the date of communication to the court of first instance and not prior thereto.

Stay by Appellate Court

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.

Stay by court which passed the decree .

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 applicant for the due performance of such decree of or as may ultimately be binding upon him.

Subject to the provisions of sub-rule (3), the court may make an ex parte order for stay of execution pending the hearing of the application.

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 1, the court shall not make an order staying the execution of the decree.

Summary Dismissal: Rules 11 & 11-A

Rule 11 deals with the power of the appellate court to dismiss an appeal summarily.

Rule 11 embodies a general principle that whenever an appeal is preferred, the appellate court is entitled, after hearing the appellant or his advocate, to reject the appeal summarily if prima facie there is no substance in it. [Rule 11(1)]

Where the appellate court which dismiss an appeal summarily is other than a High Court, it must record reasons for doing so. [Rule 11(4)]

In matters involving construction of documents, even a High Court should record reasons. [Shanker v Gangabai, (1976) 4 SCC 112]

The same principle applies to Second Appeals [Order 42, Rule 1], Letters Patent Appeals arising out of First Appeals since in such appeal (LPA), all questions of fact and law are open to challenge.

Once an appeal is admitted, the court cannot dismiss it on technical grounds or without hearing the appellant.

An appeal cannot be admitted partly. It can be admitted or dismissed wholly.

If the appellant or his pleader does not appear when the appeal is called on for hearing, the court may dismiss it for default. [Rule 11(2)]

The world may shows that the court has discretion in the matter and it is not bound to dismiss the appeal for default of appearance.

Courts By Which Decrees May be Executed

Section 38 - A decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. A court which has neither passed a decree, nor a decree is transferred for execution, cannot execute it.

Powers of Executing Court

Section 42 of the Code expressly confers upon the Court executing a decree sent to it the same powers as if it had been passed by itself. It is thus power and duty of the executing court to ensure that the defendant gives the plaintiff the very thing the decree directs and nothing more or nothing less.

Malwa Strips (P) Ltd. V Jyoti Ltd., (2009) 2 SCC 426

The provision of Order 41, Rule 1(3) making predeposit of decretal amount of giving of security a condition for filing appeal against money decree is not mandatory. The purpose for which such a provision has been inserted is to be taken into consideration. An exceptional case is to be made out for stay of execution of money decree. Where order of stay of the impugned decree is passed there being no ground of exceptional case or that predeposit would case undue hardship to the appellant, such an order is liable to be set-aside.