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CASE NO.: Appeal (civil)  922 of 2002

PETITIONER: B.P. Agarwal & Anr

RESPONDENT: Dhanalakshmi Bank Ltd. & Ors

DATE OF JUDGMENT: 25/01/2008

BENCH: Dr. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT: J U D G M E N T

Dr. ARIJIT PASAYAT, J.  

1.      Challenge in this appeal is to the order passed by the  Division Bench of the Kerala High Court.  By the impugned  order the High Court in exercise of jurisdiction under order  XLI Rule 1(3) of the Code of Civil Procedure, 1908 (in short the  \021CPC\022) directed the appellant to deposit a sum of Rs.5,00,000/-  in trial court within a particular time.  Appellants question the  correctness of the order on the ground that the High Court  could not have referred to Order XLI Rule 1(3) in the absence  of any application for stay.       2.      Learned counsel for the respondents on the other hand  supported the order of the High Court.       3.      Undisputedly, in the present case there was no  application for stay filed.  A few decisions of this Court being  relevant need to be noted.       4.      In Kayamuddin Shamsuddin Khan  v. State Bank of  India  [1998 (8) SCC 676] the dispute related to Order XLI Rule  1(3) it was held that if the amount is not deposited, the appeal  could be directed to be dismissed.  Obviously reference was to  Order XLIII Rule 5(5). In paragraphs 6 and 8 this Court  observed as follows: \0236. The learned counsel for the respondent has  invited our attention to sub-rule (3) of Rule 1  of Order XLI in the Code of Civil Procedure, as  amended in the State of Maharashtra, which  reads as under:  \023(3) Where the appeal is against a  decree for payment of money, the  appellant shall, within such time as  the Appellate Court may allow,  deposit the amount disputed in the  appeal or furnish such security in  respect thereof as the Court may  think fit:    Provided that the Court may  dispense with the deposit or security  where it deems fit to do so for  sufficient cause.\024    8. This would mean that non-compliance with

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the direction given regarding deposit under  sub-rule (3) of Rule 1 of Order XLI would result  in the Court refusing to stay the execution of  the decree. In other words, the application for  stay of the execution of the decree could be  dismissed for such non-compliance but the  Court could not give a direction for the  dismissal of the appeal itself for such non- compliance.\024        5.      Similarly, in Devi Theatre v.  Vishwanath Raju [2004 (7)  SCC 337] it was inter alia observed as follows: \0235. The learned counsel for the appellant  submits that appeal lies from every decree  passed by any court exercising original  jurisdiction. The jurisdiction of the court in  first appeal extends to examine the questions  of facts as well as that of law. It is though true  as pointed out by the learned counsel for the  respondent that under Order 41 Rule 11 CPC  it would be open for the court to dismiss the  appeal in limine at the time of admission but  even examining the matter from that point of  view we find that the court while considering  the question of admission of appeal filed under  Section 96 CPC, may admit the appeal if  considered fit for full hearing having prima  facie merit. Otherwise, if it finds that the  appeal lacks merits, it may be dismissed at the  initial stage itself. But admission of the appeal,  subject to condition of deposit of some given  amount, is not envisaged in the provision as  contained under Section 96 read with Order 41  Rule 11 CPC. The deposit of the money would  obviously have no connection with the merits  of the case, which alone would be the basis for  admitting or not admitting an appeal filed  under Section 96 CPC. Further, imposition of  condition that failure to deposit the amount  would result in dismissal of the appeal  compounds the infirmity in the order of  conditional admission.    6. It is a different matter, in case the appellant  prays for stay of the execution of the decree or  for any order by way of an interim relief during  the pendency of the appeal; it is open for the  court to impose any condition as it may think  fit and proper in the facts and circumstances  of the case. Otherwise imposing a condition of  deposit of money subject to which an appeal  may be admitted for hearing on merits, is not  legally justified and such order cannot be  sustained.\024  

6.      In the instant case there is no direction that in case of  non-payment, the appeal is to be dismissed.   In the absence of  any application for stay the High Court could not have passed  the order impugned.  The direction for deposit as given  accordingly stands vacated.       7.      The appeal is allowed but without any order as to costs.