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        Companies Law

        2008 (12) TMI 837 - SC - Companies Law

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        Stay of execution against a money decree requires sufficient cause and conditional deposit or security, not blanket relief. Stay of execution in an appeal against a money decree is a discretionary and exceptional remedy, and the appellate court must act consistently with the ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Stay of execution against a money decree requires sufficient cause and conditional deposit or security, not blanket relief.

                              Stay of execution in an appeal against a money decree is a discretionary and exceptional remedy, and the appellate court must act consistently with the requirement of deposit or security for the disputed amount. A blanket stay cannot be granted without sufficient cause shown on the record, and the court must record reasons showing why such relief is justified. The mere fact that the suit was under Order XXXVII, or that objections to maintainability may exist, does not by itself warrant complete suspension of execution. The stay of the decree in its entirety was therefore unsustainable, and conditional directions for deposit and security were substituted to protect the decretal amount.




                              Issues: Whether a stay of execution of a money decree can be granted in appeal without due regard to the requirement of deposit or security and without recording sufficient reasons.

                              Analysis: In an appeal against a decree for payment of money, the appellate court has discretion to direct deposit of the disputed amount or to permit security, and an order staying execution must be founded on sufficient cause shown on the record. The power to stay is discretionary, but it cannot be exercised arbitrarily. Ordinarily, execution of a money decree is not stayed, and the legislative intent behind the deposit requirement must be given due effect. The High Court was required to examine whether an exceptional case existed for staying the decree in its entirety and whether the materials on record justified such relief. The suit being under Order XXXVII and the possibility of objections to maintainability did not by itself justify a blanket stay of execution.

                              Conclusion: The stay of the decree in its entirety was not justified, and the order granting such blanket stay was unsustainable.

                              Final Conclusion: The appeal succeeded to the extent that the stay order was set aside and replaced by conditional directions for deposit and security to protect the decretal amount.

                              Ratio Decidendi: In appeals against money decrees, stay of execution is a discretionary and exceptional relief that must be supported by sufficient cause and exercised consistently with the requirement of deposit or security for the disputed amount.


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