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Informist, Tuesday, Oct. 7, 2025

 

NEW DELHI – The Supreme Court Tuesday ruled that depositing the amount involved in a decree is not a condition precedent for a higher court granting a stay on the execution of the decree. This means that if a party seeks a stay on the execution of a decree, it is not necessary for the court hearing the plea to impose a condition precedent that the party has to deposit the amount mentioned in the decree with the court.

 

"A deposit is not a condition precedent for an order of stay of execution of the decree by the appellate court," the Supreme Court said. "The only guiding factor and statutory mandate, for the grant of such stay of execution as indicated in (Order XLI) Rule 5 (of the Code of Civil Procedure), is the existence of 'sufficient cause' in favour of the appellant, on the availability of which the appellate court would be inclined to pass an order of stay," it said.

 

The top court, however, said that to grant an unconditional stay on execution of a decree, an exceptional case has to be made out before the appellate court. The discretion of the appellate court to grant an unconditional stay must not be exercised arbitrarily, it said, but must be used sparingly, only if an exceptional case is made out for such a stay in view of the peculiar facts and attending circumstances of the case.

 

To grant or refuse stay on execution of a decree, it is immaterial whether the decree is a money decree or any other, the court said. Order XLI, Rule 5 of the Code of Civil Procedure makes no distinction between a money decree and other decrees, it noted. Yet, as a rule of prudence and established practice evolved over time, no stay of execution of a money decree should be granted except on the condition that the amount of the decree be deposited in court, it said. This condition, however, cannot be said to be mandatory, it added, and non-prescription thereof does not operate as a bar to staying the execution of a money decree.

 

Further, the court said there is no provision under Order XLI, Rule 5 of the Code of Civil Procedure imposing a mandate to deposit cash security as the only mode of security for execution of a decree. Security, for the purpose of the provision, can be in the shape of property, bond, or an appropriate undertaking from the appellant to abide by the final decree.

 

In the case before it, the Supreme Court had, on Sept. 24, refused to lift the stay imposed by the Delhi High Court on a single-judge order asking American multinational technology company Amazon Technologies, Inc., to pay INR 3.40 billion in damages to Lifestyle Equities C.V. and Lifestyle Licensing B.V. for infringement of their registered trademark "Beverly Hills Polo Club". A bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the Lifestyle companies' plea against the high court's July order. Tuesday, the bench gave the reasoning for its order.

 

On Jul. 1, a division bench of the high court had stayed the single judge's order asking Amazon Tech to pay damages to the two Lifestyle companies. The stay was subject to Amazon Tech complying with the remaining directions issued by the single-judge bench. The division bench did not ask Amazon Tech to deposit the amount with the court for granting the stay.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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