Borough Municipality vs Firm Ramji Vasram

Baxi, J.—The opponent to this application for stay of execution of a decree instituted a suit against the Petitioner Municipality for specific performance of an agreement to grant a lease of a certain piece of land and in the alternative claimed Rs. 1,20,000/-for damages and for the refund of Rs. 2,400/- paid to the Municipality and Rs. 51-8-0 for notice charges and costs of the suit.

The trial Judge did not order specific perform mince but passed a decree ordering the Municilpality to pay the opponent Rs. 40,000/- byway of damages and to refund Rs. 2,400/- paid to it by the opponent. The Municipality accepts the decree ordering the refund of Rs. 2,400/- to the opponent out preferred this appeal against the award of damages appeal the Municipality presented the present application for stay of execution of the decree under Order 41 Rule 5, Code of Criminal Procedure.

The application was heard by me. It was re. presented to ma that there was no uniformity of practice as regards stay of execution of money decree in this Court, and while in some cases stay of execution was grunted as a matter of course, strict compliance with the provisions of Order 41 Rule 5 was Insisted upon before stay of execution could tin granted.

The learned Advocates therefore requisitioned me to refer this application to the Division bench for an authoritative pronouncement on the question whether when an appeal is hide against a money, execution of the decree should be stayed as a matter of course albeit on the Appellant furnishing security for the due geomancer of the decree or order that may ultimately be binding upon rum. I have, therefore, referred this application to the Bench.

We have heard the learned Advocates on both sides. Stay of execution of decrees is provided for by Order 41 Rule 6, Code of Civil Procedure, Sub-rule (1) lays down that an appeal shah 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 sulkiest cause order stay of execution of such de-tree. Sub-rule (2) gives the trial Court power to stay execution on sufficient cause being shown if the application for stay of execution of an appeal able decree is matte before the expiration of limitation for the appeal. Sub-rule (3) prescribes the conditions for mulcting an order of stay under both the Sub-rules & provides that no order, for stay of execution shall be made unless the Court making it is satisfied (a) that substantial loss may result to the party apply, .tap, 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 order as may ultimately be finding'' upon him.

We are not concerned with Sub-rule (4) which "Mnieais with ex parte orders for stay of execution ponding the hearing of the application. The power of the Court to stay execution of a decree has to be exercised within the four corners of the above Rule. The intention of the Legislature which appears from the misgauge of this rule seems to that an, appeal should not automatically operate as a stay of execution of the decree and no order for stay of execution should be made merely by reason only that an appeal has been preferred from tie decree.

The reason of the rule appears to be that the rights of the decree-holder having been determined by a competent Court; this not fair that he should be deprived of the fruits of his decree merely uncaused the judgment debtor prefers an appeal decree. At the eamsitimet if execution of the decree is likely to result in substantial loss to the decree-holder, discretion is given to the Court to fitly stay execution provided the other two .conditions of Sub-rule (3) are satisfied. It is, therefore, impossible to formulate any uniform rule of practice and each case must be decided on its own facts.

In the case of money decrees, a Bench of the Bombay High Court decided in Dhunjibhoy Cowasjl Umrigar v. Llsboa, 13 Bom 241 (A) that where a decree orders payment of money and an appeal is lodged against that decree by the party directed to pay, the on his application execution of the decree should be stayed, so far as it directs paymeat, on the judgment-debtor lodging the amount in Court, unless the other party gives security for the repayment of money in the event of this decree being reversed.

If such security is given by the successful party, then stay of execution should not be granted, T1H i order was made in 1888 under the Code of Civil Procedure, of 18tM, That Code did not have any provision similar Order 41 Rule 6, CPC and the order must be taken1 to have been passed In the exercise of the inherent power of the Court.

But altar the enactment of Order 41 Rule 5 in the Code of 1908 the discretion of the Court is very much limited and has to be execrated within the limits prescribed by the rule, and in a popper case where substantial loss is likely to result to the judgment debtor if a decree for payment of none is executed, the Court can stay execution of the decree even before the judgment-debtor deposits, the amount in Court. The above decision there-fore cannot serve as an useful guide for the cases under Order 41 Rule 5.

The next question is whether in this case stay of execution should be granted. This depends inter and upon the question whether substantial loss will result to the Municipality unless execution is stayed. Paragraph 3 of the application for stay makes a general statement that serious loss will result to will but it does not specify particulars of the apprehended loss.

It may, therefore, be presumed that the apprehended loss is the loss of interest to the Municipality, if it is ordered to pay the amount and the decree-holder has to make restitution In the event of the appeal succeeding. But if the occasion arises for making restitution of the decrial amount with interest from the date of its realisation till the date of the restitution. The petition states that the Municipality is a statutory body and owns property worth laces of rupees and the decree-holder is not likely to suffer any loss if the execution of the decree is stayed. These can hardly be said to be proper grounds for staying execution.

Whether the judgment-debtor is a public body or a private person makes no difference in principle in deciding whether execution of the decree should be stayed. That the decree-holder will not suffer any loss if execution is stayed is also no ground because the law is that the decree should be executed unless the judgment-debtor proves specific loss to him if execution is not stayed. Execution cannot be stayed on the ground that the decree-holder will suffer no loss.

Thus the stay application discloses no ground for ordering stay of execution of the decree and consequently it is ordered to be dismissed. We however direct that before preceding with execution of the decree the trial Court shall take security fo�i.restitu1tton.

in the result the application fails and is ordered to be dismissed, In the peculiar circumstances of the case, we make no order as to costs.

Shah, C.J.

I agree. I am of the opinion that the subject does, not admit of any set practice one way or the other, and that in view of the provisions of Order 41 Rule 5, CPC the question has to be decided by the Court on the facts of each particular case.