Embassy Hotels (P) Ltd. vs Benjamin Proprietor of Nirmala Industries

A.C. Arumugaperumal Adityan, J.—This revision has been directed against the order passed in E.A. No. 1075 of 2007 in E.P. No. 1 of

2007 in O.S. No 1538 of 1980 on the file of the Court of II Additional Subordinate Judge, Coimbatore. The said application was filed Under

Order 21 Rule 26 r/w Section 151 CPC to stay the execution of the decree passed in a suit for specific performance of contract. The learned

Executing Court had dismissed E.A. No. 1075 of 2007 on the ground that the applicant had already moved the Honourable Apex Court in second

appeal for grant of stay in which the Honourable Apex Court have passed a conditional order directing the applicant in E.A. No. 1075 of

2007/Judgment debtor/11th defendant in O.S. No. 1538 of 1980 to deposit a sum of Rs. 2.5 Lakhs every month from 3.9.2004 and to continue

his possession over the petition schedule property in E.P. No. 1 of 2007 which is the subject matter in O.S. No. 1538 of 1980. But the revision

petitioner/applicant in E.A. No. 1075 of 2007 has not complied with the orders of the Honourable Apex Court in petition for Special Leave to

appeal (Civil) No. 24707 of 2002 dated 3.9.2004. Since the revision petitioner herein had failed to comply with the conditional order passed by

the Honourable Apex Court, the application for stay was dismissed by the Honourable Apex Court on 16.12.2005. After the dismissal of the stay

application by the Honourable Apex Court, the revision petitioner had moved the executing Court by way of filing of E.A. No. 1075 of 2007

under Order 21 Rule 26 CPC to stay the execution petition in E.P. No. 1 of 2007 till the disposal of the Civil Appeal No. 5884 of 2004 pending

before the Honourable Apex Court.

Heard Mr. AR. L. Sundaresan, the learned Senior counsel appearing for the revision petitioner who would contend that even though E.A. No.

1075 of 2007 was filed under wrong provision of law Under Order 21 Rule 26 CPC, actually, the petition is one Under Order 41 Rule 6 of CPC

which reads as follows:

Security in case of order for execution of decree appealed from:

Where an order is made for the execution of a decree from which an appeal is pending, the Court which passed the decree shall, on sufficient

cause being shown by the appellant, require security to be taken for the restitution of any property which may be or has been taken in execution of

the decree or for the payment of the value of such property and for the due performance of the decree or order of the Appellate Court, or the

Appellate Court may for like cause direct the Court which passed the decree to take such security.

2) Where an order has been made for the sale of immovable property in execution of a decree, and an appeal is pending from such decree, the

sale shall, on the application of the Judgment-debtor to the Court which made the order, be stayed on such terms as to giving security or otherwise

as the Court thinks fit until the appeal is disposed of.

Relying on the abovesaid provision of law, the learned Senior Counsel appearing for the revision petitioner would contend that since C.A. No.

5884 of 2004 is pending against the decree and Judgment in O.S. No. 1538 of 1980 before the Honourable Apex Court, the trial Court which

passed the decree is competent to stay the execution of the decree till the disposal of C.A. No. 5884 of 2004 under Order 41 Rule 6(1) CPC, the

learned Senior Counsel would also focus the attention of this Court to Order 41 Rule 5 CPC which runs as follows:

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.

Explanation: An order by the Appellate Court for the stay of execution of the decree shall be effective from the date of the communication of such

order to the Court of first instance, but an affidavit sworn by the appellant, based on his personal knowledge, stating that an order for the stay of

execution of the decree has been made by the Appellate Court shall, pending the receipt from the Appellate Court of the order for the stay of

execution or any order to the contrary, be acted upon by the Court of first instance.

2) Stay by Court which passed the decree: Where an application is made for stay of execution of an appealable decree before the expiration of the

time allowed for appealing there from, the Court which passed the decree may on sufficient cause being shown order the execution to be stayed.

3) 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 or order as may ultimately be binding upon him.

(4) Subject to the provisions of Sub-rule (3) , the Court may make an exparte order for stay of execution pending the hearing of the application

5) 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.

No doubt, the executing Court is competent to stay the decree which was passed by it, when an appeal is pending against the decree and

Judgment of the Court which passed the same. As per Order 41 Rule 5 of CPC, the Appellate Court can stay the execution of the decree. Under

Order 41 Rule 6, the Court which passed the decree can also stay the execution of the decree passed by the Court, if It is brought to the notice

that an appeal is pending against the decree and Judgment of the trial Court.

The learned Senior counsel appearing for the revision petitioner would submit that when the appellate Court had declined to grant stay of the

execution of the decree, passed by the trial Court, then the Judgment debtor can move under Order 41 Rule 6 CPC before the Court which

passed the decree to stay the execution of the decree In support of this contention, the learned Senior Counsel would rely on a decision reported

in Baldev Krishan Vs. Punjab State Agricultural Marketing Board, Chandigarh, , wherein the revision itself was preferred by the Decree holder

against the order of the Subordinate Judge, Rajpura directing him to deposit a sum of Rs. 1,64,000/-. The brief facts are the amount of Rs.

1,64,000/- belonging to the Judgment debtor was ordered to be attached by the executing Court in pursuance of a decree passed in favour of the

plaintiff/decree holder. On an application by the Judgment debtor before the Executing Court it was ordered that the amount attached be sent for

from the Bank but it may not be paid to the decree holder till Regular Second Appeal No. 191 of 1984 filed by the Judgment debtor against the

decree sought to be executed, was decided by the High Court. The decree holder has come up in revision. The respondent therein had resisted the

revision by filing an application for stay of the execution in the Regular Second Appeal which was dismissed. Thereafter the Judgment debtor filed

an application of stay under Order 41 Rule 6 CPC seeking indulgence of the Court to stay the disbursement of the decretal amount to the revision

petitioner/decree holder. Only under such circumstances, it was held by the High Court of Punjab and Haryana as follows:

From a reading of the rule it is evident that in case an order for execution of the decree has been made, the Court which passed the decree is

entitled to ask the decree-holder for security for restitution of the property taken in execution of the decree and for the due performance of the

decree of the appellate Court if an appeal is pending against the decree. Both the rules thus operate in different fields. Sub-rule(1) read with Sub-

rule (3) of Rule 5 prescribes furnishing of the security for the due performance of the decree by the Judgment-debtor whereas Sub-rule(1) of Rule

6 prescribes the furnishing of the security for restitution of the property by the decree holder. Sub-rule (1) further provides that the appellate Court

is also entitled to pass such an order which the trial Court can pass. Therefore, it cannot be held that in case an application under Order 41 Rule 5

filed by the Judgment-debtor has been dismissed, he cannot approach the trial Court under Sub-rule (1) of Rule 6 In the above view, I am fortified

to some extent by the observations of this Court in Jangir Singh Ganda Singh and Others Vs. Nihal Kaur and Others, . In that case an application

for stay under Order 41 Rule 5 was dismissed by the appellate Court. Later an application was moved under Order 41 Rule 6(2) by the Judgment

debtor for staying the sale of the property. D.K. Mahajan, J came to the conclusion that the executing Court could not refuse to exercise

jurisdiction vested in it under Order 41 Rule 6(2) in case an application of the Judgment-debtor under Order 41 Rule 5 had been refused by the

appellate Court.

There cannot be two opinion about the findings of the learned Judge in the above said ratio. If the appellate Court had dismissed the petition for

stay of the execution proceedings, it is open to the party affected to approach the executing Court under Order 41 Rule 6 CPC for stay. But that is

not the case on hand. The revision petitioner had already approached the Honourable Apex Court for stay wherein the Honourable Apex Court

have passed an order in favour of the revision petitioner herein to be in possession of the petition schedule property (E.P. No. 1 of 2007)

provided, the revision petitioner pays a sum of Rs. 2.5 Lakhs every month to the respondent till the disposal of C.A. No. 5884 of 2004. But the

revision petitioner has not complied with the said condition imposed by the Honourable Apex Court in the stay application filed by him. Under such

circumstances, I am of the view that after flagrantly violated the order of the Honourable Apex Court, it is not open for the revision petitioner to

approach the trial Court before whom E.P. No. 1 of 2007 is pending, under Order 41 Rule 6 of CPC for grant of stay of the execution

proceedings till the disposal of C.A. No. 5884 of 2004 pending before the Honourable Apex Court.

The other ratio relied on by the learned Senior Counsel for the revision petitioner Firm Shri Veer Glass Works Vs. Firm Sonpal Vidya Charan

Glass Bangles Merchant and Others, for the same proposition of law. The short question that arose for consideration in the said revision was

whether the High Court has in exercise of appellate Jurisdiction declined to grant stay of the execution in exercise of power under Order 41 Rule

5(1) CPC, is it open for the executing Court to stay the sale of immovable property in execution of the decree in exercise of powers under Order

41 Rule 6(2) of CPC. The suit was filed by the revision petitioner for recovery of certain amount of money. Against the decree, there was a first

appeal which was pending, before the High Court. During the pendency of the said appeal, an application was made before the Court by the

respondents for execution of the decree being stayed but the said application was rejected under Order 41 Rule 5(1) of CPC and in execution of

the decree certain immovable properties belonging to the respondents were attached. The Judgment-debtors filed an application under Order 41

Rule 6(2) before the Execution Court which has passed an order directing the Judgment debtor to furnish security for stay of the sale of the said

property which was under attachment. The relevant observation in the said ratio relevant for the purpose of deciding this revision runs as follows:

Upon a close scrutiny of these provisions it would appear that though to a certain extent they are overlapping, it may not be correct to say that one

is negatived by the other Rule 6(2) is not made expressly subject to an order passed under Rule 5(1). We have then to see whether there is

anything contained in these provisions which may be construed to restrain the jurisdiction exercisable under Rule 6(2) by necessary implication

despite the fact that the said provision is not made expressly subject to what is contained under Rule 5(1). On analysis it will appear that there are

certain distinct features in relation to both these provisions which may be described as under:

1) Rule 5(1) confers power exercisable by the appellate Court and it is wide in the sense that it pertains to stay of execution by any mode including

that of sale of immovable property; the power under Rule 6(2) is in essence restricted inasmuch as the stay contemplated by the execution Court

therein is only in respect of sale of immovable property in execution.

ii) From the above it follows that even though on account of stay granted by the execution Court under Rule 6(2), the decree holder may not

proceed to sell the immovable property belonging to the Judgment-debtors, it remains open to him to proceed to execute by other modes available

as contemplated u/s 51 of the Code.

iii) The exercise of appellate Jurisdiction under Order 41 Rule 5(1) is discretionary. The appellate Court has necessarily to take into account in that

connection the relative hardship involved to the parties and such other factors as may be regarded to be relevant. No such elements are, however,

to be found contained in so far as the Rule 6(2) is concerned. The execution Court has only to ascertain therein that the sale required in execution

is of immovable property and that there is an appeal pending against the decree of which execution is sought. The mere pendency of an appeal is

for purposes of this rule make enough ground for stay of sale of immovable property whereas Rule 5(1) contemplates in express terms that mere

pendency of appeal does not amount to stay of execution. The execution Court has, of course, to obtain security under Rule 6(2) in order to be

able to exercise powers thereunder. But subject to all this the grant of stay by the Execution Court thereunder is mandatory .

As I have already observed since the Honourable Apex Court has already granted stay in favour of the revision petitioner imposing certain

conditions, and since the revision petitioner has not complied with the condition, the stay of execution proceedings has been vacated and the

application for stay was filed by the revision petitioner before the Honourable Apex Court was dismissed. Under such circumstances, I am of the

view that the revision petitioner is not competent to take shelter under Order 41 Rule 6 (1) or 6(2) CPC by contending that since the appeal in

C.A. No. 5884 of 2004 is pending before the Honourable Apex Court, the executing Court is bound to stay the proceedings under Order 41 Rule

6 of CPC. The learned Executing Court has correctly dismissed E.A. No. 1075 of 2007 only on the ground that the petitioner in E.A. No. 1075 of

2007 /revision petitioner herein has failed to comply with the condition imposed in the stay application filed by him before the Honourable Apex

Court cannot take shelter under Order 41 Rule 6 CPC to obtain an order of stay from the executing Court on the ground that an appeal is pending

against the decree and Judgment in O.S. No. 1538 of 1980.

Mr. T.R. Mani, the learned Senior Counsel appearing for the respondent while endorsing the views of the learned Executing Court would

contend that after approaching the Honourable Apex Court for stay and after failed to comply with the condition imposed by the Honourable Apex

Court in the stay application, it is not open to the revision petitioner to move again before the Executing Court for stay. Under such circumstances,

I do not find any reason to interfere with the well considered order of the learned executing Court in E.A. No. 1075 of 2007 in E.P. No. 1 of

2007 in O.S. No. 1538 of 1980 on the file of the Court of II Additional Subordinate Judge, Coimbatore.

In fine, the civil revision petition is dismissed, confirming the order passed in E.A. No. 1075 of 2007 in E.P. No. 1 of 2007 in O.S. No. 1538 of

1980 on the file of the Court of II Additional Subordinate Judge, Coimbatore. No costs. Consequently, connected M.P. No. 1 of 2008 is also

dismissed.