Deposit Of Decretal Amount Not Mandatory For Granting Stay Of Execution Of Money Decree: Supreme Court Clarifies

The Supreme Court clarified that the condition for deposit of decretal amount is not mandatory for granting stay of execution of the money decree.

The Court, however, noted that, as a rule of prudence and established practice evolved over a period of time, no stay of execution of a money decree should be granted, except on the condition that the decretal amount be deposited in the court.

The Court emphasised thus in a Petition preferred by Lifestyle Equities C.V. against Amazon Technologies INC, challenging the Judgment of the Delhi High Court.

The two-Judge Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan observed, “For the purpose of the grant or refusal of stay of execution of the decree under Rule 5 of Order XLI, it is immaterial whether the decree is a money decree or any other decree. The language couched in the said provision is very clear. Order XLI, Rule 5 of the makes no distinction between a money decree and other decrees, and the said provision applies with full rigour in both instances. Yet as a rule of prudence and established practice evolved over a period of time, no stay of execution of a money decree should be granted, except on the condition that the decretal amount be deposited in the court. However, such condition for deposit cannot be said to be mandatory and non prescription thereof does not operate as a bar to staying the execution of a money decree.”

The Bench said that there is no provision under Order XLI Rule 5 of the Civil Procedure Code, 1908 (CPC) imposing a mandate to deposit cash security as the only mode of security for execution of the decree and security, for the purpose of the said provision, can be in the shape of property, bond and or in the form of an appropriate undertaking to abide by the decree, seeking stay of execution.

Senior Advocates Mukul Rohatgi and Gaurav Pachnanda appeared for the Petitioners/Plaintiffs, while Senior Advocates Abhishek Manu Singhvi, Neeraj Kishan Kaul, and Arvind Nigam appeared for the Respondent/Defendant.

Court’s Observations

The Supreme Court after hearing the contentions of the counsel, noted, “In an action strictly in personam, personal service on the defendant is the preferred mode of service, i.e., by handing a copy of the summons to the defendant in person. If defendant, for excusable reasons, cannot be served with the summons within a reasonable period, then substituted service can be resorted to. While substituted service of summons is permitted, "it is extraordinary in character and in derogation of the usual method of service.”

The Court said that the practice of not granting stay in money decrees except on condition that the decretal amount be deposited in the Court, and the successful party be permitted to withdraw the same on furnishing security to the satisfaction of the Trial Court appears to have been well entrenched, and for good reasons.

“… if we read the plain language of Order XLI Rule 1 sub-rule (3) of the CPC, we get the clear intention of the legislature that deposit of the decretal amount, or giving security thereof is not a condition precedent for maintaining a money appeal, and the court is vested with the discretion to grant time for depositing such amount and giving security before disposal of the appeal, and at the same time, the Appellate Court has also the power to extend the time by taking aid of Section 148 of the CPC. On the other hand, a less grave consequence for non-compliance of such condition, was envisaged, namely, to disentitle the appellant to the benefit of stay of execution of the decree as provided in Rule 5(5) of Order XLI”, it further enunciated.

The Court, therefore, concluded that it should not disturb the impugned Judgment and Order passed by the Division Bench of the High Court. It clarified that the main Appeal shall be decided on its own merits and without being influenced in any manner by any of the observations made in the Judgment.

“It shall be open for the parties to put forward all contentions available to them in law at the time of the final hearing of the Regular First Appeal”, it said.

Accordingly, the Apex Court directed the Registry to forward one copy each of the Judgment to all the High Courts.

Cause Title- Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC (Neutral Citation: 2025 INSC 1190)

Click here to read/download the Judgment