Unconditional stay of a money decree may be justified only by exceptional defects and adequate alternative security.

Order XLI Rule 5 CPC requires a reasoned stay of execution based on sufficient cause, substantial loss, absence of unreasonable delay, and security for due performance. In money-decree appeals, deposit is ordinarily prudent but is not an inflexible condition because security may be provided through property, a bond, or an appropriate undertaking. An unconditional stay may be justified only exceptionally, including where the decree appears perverse, patently illegal, or facially untenable. Relevant circumstances may include defective service, ex parte proceedings, unsupported infringement findings, and damages awarded without pleadings or notice. The Section 36 Arbitration Act analogy does not govern appellate stay powers under the CPC.

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Issues: Whether the appellate court validly granted an unconditional stay of execution of a money decree pending appeal without requiring deposit of the decretal amount.

Analysis: Order XLI Rule 5 of the Code of Civil Procedure, 1908 requires a specific and reasoned stay order founded on sufficient cause. The appellate court must consider substantial loss, absence of unreasonable delay, and security for due performance. Although deposit of the disputed amount is the ordinary and prudent course in money-decree cases, Order XLI Rules 1(3) and 5(5) do not make cash deposit an inflexible condition for stay; security may take the form of property, bond, or an appropriate undertaking. An unconditional stay is permissible only sparingly where an exceptional case is established, including where the decree is egregiously perverse, patently illegal, or facially untenable. Prima facie absence of valid service of summons, the ex parte proceedings, lack of sustainable pleadings or findings connecting the judgment-debtor to infringement, and enhancement and award of damages without corresponding pleadings or notice were relevant exceptional circumstances. The analogy based on Section 36 of the Arbitration and Conciliation Act, 1996 was inapplicable to the exercise of appellate power under the Code.

Conclusion: The unconditional stay of the money decree was validly granted in the exceptional circumstances, and no interference was warranted.

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