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PETITIONER: CENTRAL BANK OF INDIA

       Vs.

RESPONDENT: STATE OF GUJARAT & ORS.

DATE OF JUDGMENT11/09/1987

BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH DUTT, M.M. (J)

CITATION:  1987 AIR 2320            1988 SCR  (1) 106  1987 SCC  (4) 407        JT 1987 (3)   552  1987 SCALE  (2)510

ACT:      Code of Civil Procedure 0.41, r. 5(1)-Exercise of power to stay  execution of  a  decree-When  an  amount  has  been deposited pursuant  to an  order of  execution the appellate court cannot order its refund to the judgment-debtor.

HEADNOTE:      The respondent  filed a  first appeal in the High Court against  a  decree  and  an  application  for  stay  of  its operation.  Before   any  order   was  made   in  the   stay application,  the  appellant,  who  was  the  decree-holder, levied execution, pursuant to which the respondent deposited the decretal  amount in  the executing court. The respondent moved  the   High  Court   for  an  order  stay  of  further proceedings in  execution. The High Court passed an order of stay in  the  application  already  pending  before  it  and directed refund  of the  amount deposited  in the  executing court to  the respondent. The appellant challenged the order of refund.      Allowing the appeal, ^      HELD: In the absence of an order of stay under 0.41, r. S(l) C.P.C.,  the decree  was executable  and the  judgment- debtor deposited  the decretal  dues in the executing court. Once the  decretul dues  had come  into the  executing court there was  indeed no  justification  for  the  direction  to refund the  same to  the judgment-debtor. On the other hand, the High Court could in its discretion either direct payment of  the   amount  to  the  decree-holder  subject  to  terms safeguarding the  interest of  the  judgment-debtor  in  the eventuality of  reversal of  the decree or direct the amount to be  deposited or invested on terms of interest so that on the disposal  of the  First  Appeal  appropriate  directions could be given. [108D-F]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2200 of 1987.      From the  Judgment and order dated 11 23.4. 1986 of the

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Gujarat High Court in C.A. No. 953 of 1985. 106 107      Soli J. Sorabjee, M.V. Singhvi, Mrs. Manik Karanjawala, N.J. Mehta,  R.F. Nariman,  D.M. Shah  and Rajan Karanjawala for the Appellant.      Dr. Y.S.  Chitale,  T.U.  Mehta,  P.H.  Parekh,  Suresh Daluja, M.N. Shroff and Girish Chandra for the Respondents.      The following order of the Court was delivered:                             O R D E R      Special leave granted.      Ordinarily in  a  matter  of  this  jurisdiction  under Article  136   of  the  Constitution  would  not  have  been permitted to be invoked but having heard learned counsel for the parties  we are  of the  view  that  in  the  facts  and circumstances of  this matter,  the order  of the High Court should be reversed by allowing the appeal.      The appellant,  a nationalised  Bank, obtained a decree in Civil  Suit No. 1169 of 1977 from the City Civil Court at Ahmedabad against  several defendants including the State of Gujarat. So  far as  the defendant-State  is concerned,  the decree ran thus:-                "The  suit  is  partly  decreed  against  the           defendant No. 3 and the defendant No. 3 is ordered           to  pay  Rs.59,69,422.59  to  the  plaintiff  with           interest at  the rate  of 6%  from the date of the           suit  till   realisation  of  the  amount  by  the           plaintiff. The  defendant  No.  3  shall  pay  the           proportionate costs  of the  suit to the plaintiff           and bear its own ............. . The State  of Gujarat  has filed  a First Appeal in the High Court of Gujarat being First Appeal No. 1993 of 1983 against the decree  and it  is pending  disposal. An application for stay of  execution of  the operation of the decree was filed by the  State of  Gujarat being  C.A. No.  953 of  1985  but before any  order was  made thereon,  the appellant  decree- holder  levied   execution  of   the  decree   in  Execution Application No.  240 of  1985. On  5th of  March, 1986,  the State  Government   deposited  the   decreetal   amount   of Rs.88,92,280 in the Executing Court and moved the High Court for an order of stay of further proceedings in execution and for  restraining  the  decree-holder  from  withdrawing  the amount from  the Executing  Court by  alleging that  in  the event of 108 reversal of  the trial  court’s decree in appeal it would be difficult for the State Government to recover the amount. On 21st of  March, 1986, the High Court passed an order of stay of execution  in the pending application, C.A., 953 of 1985, and on  the 23rd of April, 1986, the impugned order was made directing refund  of  the  amount  deposited  by  the  State Government in the Executing Court. Challenge is to the order directing refund.      Order 41  Rule 5(1)  of the  Code  of  Civil  Procedure      provides:-                "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 prefer red           from the  decree; but  the Appellate Court may for           sufficient cause  order stay  of execution of such           decree.           Explanation ................................... ".      In the  absence of  an order  of stay  the  decree  was executable and  the judgement-debtor deposited the decreetal

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dues in  the Executing  Court. Once  the decreetal  dues had come  into   the  executing   court  there   was  indeed  no justification for  the direction  to refund  the same to the judgment-debtor. On  the other hand, the High Court could in its discretion  either direct  payment of  the amount to the decree-holder subject  to terms safeguarding the interest of the judgment-debtor  in the  eventuality of  reversal of the decree or  direct the  amount to be deposited or invested on terms of  interest so  that on  the disposal  of  the  First Appeal appropriate directions could be given.      In the  impugned order  which in  the  setting  of  the matter appears  to be  long one, the High Court has referred to many  aspects which  perhaps were not necessary but we do not propose  to go  into the  same.  We  allow  the  appeal, reverse the order of refund and direct that the amount shall be paid  to the  decree-holder subject to the condition that in the event of the decree of the trial court being reversed the  appellant-Bank   would  redeposit  the  amount  in  the executing court within two weeks of the date of the reversal along with  18 per  cent of  interest on the amount from the date the money is withdrawn till the date of depositing. The appellant is a nationalised bank and we see no justification to demand  any security  from it. There will be no order for costs. 109      Learned counsel for the State of Gujarat contended that the A State is facing acute drought condition and is looking for funds  to meet  the emergency. This of course was stated as a  ground in support of the plea that the refund directed by the  High Court should not be reversed. In case the State looks for  funds, we  are sure,  the  appellant  Bank  would consider  favourably   the  request   for  accommodation  on appropriate terms. H.L.C.                                       Appeal allowed. 110