TaxTMI 
TaxTMI 
2025 (10) TMI 1445
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....e followed while Interpreting a Provision of a Statute 22 iii. Decisions of various High Courts on the Subject 33 iv. Meaning and Import of "sufficient cause" under Order XLI Rule 5 of the CPC 38 v. Service of Summons and Irregularity in the Service of Summons 39 vi. Reading of Section 36 of the Arbitration Act and Order XLI Rule 3 and Rule 5 respectively of the CPC 41 vi. Relevant aspects which the High Court looked into for the purpose of granting unconditional stay 53 F. CONCLUSION 69 1. Our Order dated 24.09.2025 passed in the instant petition reads thus: "1. Exemption Application is allowed. 2. Heard Mr. Mukul Rohatgi and Mr. Gaurav Pachnanda, the learned Senior counsel appearing for the petitioners and Dr. Abhishek Manu Singhvi, Mr. Neeraj Kishan Kaul and Mr. Arvind Nigam, the learned Senior counsel appearing for the respondent. 3. We are of the view that there is no good reason for us to interfere with the impugned Judgment and Order passed by the High Court. 4. The Special Leave Petition is, accordingly, dismissed. 5. In view of the dis....
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....ch enjoys extensive goodwill and recognition in the domestic and international markets. The plaintiffs instituted the suit contending that the defendant has been unlawfully using a mark identically or deceptively similar to the plaintiffs' trademark, thereby violating their statutory and common law rights. 9. In such circumstances referred to above, the plaintiffs prayed for the following reliefs: "a. Decree for permanent injunction restraining die Defendants, its partners, directors, shareholders or proprietor as the case may be, its assigns in business, franchisees affiliates, subsidiaries, licensees, and agents from selling, offering for sale, advertising, directly or indirectly dealing in any products or reproducing or using in any manner whatsoever, the Infringing Logo Mark or any other trade mark or logo/device, which is identical to and/or deceptively similar to, or is a deceptive variant of, and/or includes the Plaintiffs' well known Logo Mark amounting to infringement of the Plaintiffs' registered trade marks as disclosed in the Plaint. b. Decree for permanent injunction restraining the Defendants, its partners, directors, shareholders or propr....
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.... The Court fees as and when the accounts of profit are determined precisely and accurately in the course of trial, and upon disclosure of profits made by the Defendants. g. An order awarding costs of this suit to the Plaintiffs; h. Any other and further relief(s) as this Hon'ble Court may deem fit and proper to meet the ends of justice." 10. It appears from the materials on record that in the suit filed by the plaintiffs there were three defendants including the respondent herein as the original defendant No. 1. The plaint computed the damages claimed from all the defendants to the tune of Rs. 2,00,05,000/- (Rupees Two Crore and Five Thousand Only), or such other amount as the court would find it to be payable. 11. It further appears that the defendant No. 1 was proceeded ex parte vide Order dated 20.04.2022. Of the remaining two defendants, the suit was decreed against the defendant No. 2 for Rs. 4,78,484/- vide the Order dated 02.03.2023. The very same order deleted the defendant No. 3 from the array of parties. 12. In such circumstances, the respondent before us is the only defendant now contesting the litigation. 13. It appears that upon instit....
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....2 is selling the products of the defendant No.1 under the impugned logo mark by listing the same on the platform of defendant No.3. 9. None appears on behalf of defendant No.1 despite advance notice however, learned counsel for defendant No.3, that is, Amazon Seller Service Pvt. Ltd. enters appearance and states that in an earlier suit filed by the plaintiff being CS(COMM) 1015/2018 Lifestyle Equities C.V. and Ors. vs. Amazon Seller Services Pvt. Ltd., vide order dated 16th July, 2018, this Court had already directed the defendant No.3 to take down the URLs wherein the brand/logo/device mark of the plaintiff is copied including those mentioned in the plaint and as and when the plaintiff gives any further information in this regard. Learned counsel for the defendant No.3 states that since the defendant No.3 is covered by the said order of this Court dated 16th July, 2018, no fresh suit is maintainable and the plaintiff was only required to intimate the same to the defendant No.3 and hence the present suit is mala fide. 10. Learned counsel for the defendant No.2 states that the defendant No.2 has already taken down the listing and will further investigate into the m....
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....dentically/deceptively similar to the plaintiffs' logo mark "BHPC". 15. The suit ultimately came to be adjudicated ex parte, and came to be decreed in favour of the plaintiffs and against the defendant No. 1, i.e., the respondent before us in the following terms: "121. The suit is accordingly decreed as under in favour of Plaintiffs and against Defendant No. 1 in the following terms: (i) A decree of permanent injunction is granted in terms of paragraphs 64(a), (b) and (c) of the plaint, (ii) A decree of damages to the tune of $38.78 million as on date Rs. 336,02,87,000.00/- is granted in favour of the Plaintiffs against Defendant No. 1. If the said amount is paid within three months, no interest would be liable to be paid. However, if the same is not paid by the Defendant No.1, interest @ 5% per annum would he payable from the date of this judgment until the full realization of the said amount. (iii) A decree of costs to the tune of Rs. 3,23,10,966.60/- along with the Court Fee. 122. The details of the relief granted are summarized below: S.NO. DECREE DETAILS AMOUNT/TERMS 1 Compensatory Damages 1A Lost Royalties ....
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.... stay of the execution of money decree. It was vehemently submitted that the impugned judgment and order passed by the Division Bench of the High Court is in gross violation and flagrant disregard of the mandatory provisions of Order XLI Rule 5(1) and Rule 5(3) of the CPC respectively. 21. Mr. Rohatgi vehemently submitted that impugned judgment and order is erroneous on all counts. According to the learned Senior Counsel, the High Court is not correct in saying that there was no valid service of summons to the defendant. 22. The learned Senior Counsel vehemently submitted that Order XLI Rule 1(3) of the CPC makes it abundantly clear that in an appeal against a decree for payment of amount, the appellant is obliged in law, within the time permitted by the Appellate Court, to deposit the amount awarded or furnish such security in respect thereof as the Court may think fit. He laid much stress on the fact that under Order XLI Rule 5(5) of the CPC a deposit or security, is a condition precedent for an order by the Appellate Court staying the execution of the decree. 23. In other words, according to the learned Senior Counsel the provision is mandatory in character. With a view....
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....of any error of law could be said to have been committed by the High Court in passing the impugned judgment and order. 29. The learned Senior Counsel submitted that all the relevant aspects of the matter could be said to have been looked into by the Division Bench painstakingly, and upon being fully convinced on all aspects, the Division Bench in its discretion thought fit to grant the benefit of stay of the execution of the money decree without insisting for the deposit of the decretal amount with interest or any other tangible security. 30. It was argued that the decision of this Court in Sihor Nagar Palika (supra) upon which strong reliance has been placed on behalf of the petitioner is of no avail in view of the decision of this Court in Malwa Strips Pvt. Limited v. Jyoti Limited, reported in (2009) 2 SCC 426. 31. It was pointed that in Malwa Strips (supra), this Court considered Sihor Nagar Palika (supra) and took the view that the word "shall" in Order XLI Rule 5 of the CPC is not mandatory, and if an exceptional case is made out then it is always open for the Appellate Court to grant the benefit of stay of the execution of a money decree without insisting for deposi....
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.... Order XLI Rule 5 of the CPC would be restricted to only cases of fraud or corruption, or grounds that take colour from those two grounds and not cases of an extreme or egregious view on the merits of the adjudication. E. ANALYSIS 38. Having heard the learned Senior Counsel appearing for the parties and having gone through materials on record, the only question that falls for our consideration is whether the Division Bench of the High Court committed any error in passing the impugned judgment and order? 39. Before adverting to the rival submissions canvassed on either side, we must look into few relevant provisions of law and also look into few decisions of this Court and various High Courts. 40. Order XLI Rule 1(3) of the CPC reads thus:- "1. Form of appeal - What to accompany memorandum.- xxx (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." 41. Order XLI Rule 5 of the CPC reads as under:- "Order XLI Rule 5. Stay by Appellate Court. ....
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.... to 293. 43. The Statement of Objects and Reasons accompanying the Bill recites in paragraph 5 at page 295 that after carefully considering the recommendations made by the Law Commission in its Twenty-seventh, Fortieth, Fifty-fourth and Fifty-fifth Reports, the Government had decided to bring forward the said Bill for the amendment of the Code of Civil Procedure, 1908, keeping in view, among others, the following basic considerations, namely: (i) that a litigant should get a fair trial in accordance with the accepted principles of natural justice; (ii) that every effort should be made to expedite the disposal of civil suits and proceedings, so that justice may not be delayed; (iii) that the procedure should not be complicated and should, to the utmost extent possible, ensure fair deal to the poorer sections of the community who do not have the means to engage a pleader to defend their cases. 44. Clause 90 of the Bill provided for the amendment of Order XLI. In Rule 1 of Order XLI, after sub-rule (2), sub-rule (3) in the following terms was sought to be introduced: "(3) Where the appeal is against an order made in execution of a decree for p....
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....nt-debtor having a good case, to pursue the appeal on account of his inability to deposit the disputed amount or to furnish security for such amount." 49. The Committee is, therefore, of the opinion that in order to see that justice is done to both the parties, the proposed sub-rule might be amended in such a way that neither the judgment-debtor is deprived of his right to pursue the appeal nor the decree-holder is deprived of the remedy. Proposed sub-rule (1A) has been amended to provide that stay of execution of the decree will not be granted unless the deposit is made or security is furnished and has been transposed as sub-rule (5) of Rule 5. 50. Be it stated that the Committee made no specific recommendation in regard to sub-rule (3) of Rule 1 of Order XLI proposed to be inserted by original Clause 90 of the Bill. In other words, the Committee recommended no change in the form or content of sub-rule (3) which was proposed to be inserted by way of amendment in Rule 1 of Order XLI. However, the Bill reported by the Committee incorporated a material change in the said sub-rule which will be presently noticed. 51. The Code of Civil Procedure (Amendment) Bill, 1974 (Bill No....
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.... where the appeal is against a decree for payment of money. (2) Sub-rule (1A) of rule 3 of Order XLI requiring the Court to reject the memorandum of appeal where the appellant fails to make the deposit or furnish security specified in sub-rule (3) of Rule 1 of Order 41, was deleted. (3) Sub-rule (5) was added in Rule 5 of Order 41 providing that where the appellant fails to make the deposit or to furnish the security, the Court shall not make an order staying the execution of the decree." (Emphasis supplied) 54. These changes are also found reflected in the Code of Civil Procedure (Amendment) Act, 1978, and they now find place in the parent Act, namely, the CPC. ii. Principles required to be followed while Interpreting a Provision of a Statute 55. As the entire debate revolves around the interpretation of the provisions of Order XLI Rule 5(1) and Rule 5(3) of the CPC respectively, we must discuss the well settled principles required to be followed while interpreting a provision of a statute. 56. The well-settled principles required to be followed by a court while interpreting a provision of a statute is that the intention of the legislature is....
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....ed on the Courts. The Court cannot add words to a statute or read words into it which are not there. Assuming there is a defect or an omission in the words used by the Legislature the Court could not go to its aid to correct or make up the deficiency. Courts shall decide what the law is and not what it should be. The Court of course adopts a construction which will carry out the obvious intention of the Legislature but could not legislate itself. But to invoke judicial activism to set at naught legislative judgment is subversive of the Constitutional harmony and comity of instrumentalities." (Emphasis supplied) 59. Applying the aforesaid principles, 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 g....
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.... 63. In view of the law declared by this Court in Kayamuddin (supra) and Malwa Strips (supra), there is no escape from the conclusion that the obligation under Order XLI Rule 1(3) is not mandatory but directory in nature, and failure to comply with the same shall not result in rejection of the appeal, but would disentitle the appellant the benefit of stay of execution of the money decree. 64. The provisions of Order XLI Rule 5 of the CPC govern the question of grant or refusal of stay of execution of the decree by the appellate court. A mere reading of the provision makes it clear that it does not make any distinction between a money decree and other decrees. The powers of the Appellate Court to order stay of execution of the decree are not fettered in any way if there is "sufficient cause" for passing such an order. Even with regard to money decrees, the discretion of the court is circumscribed by the same limitations imposed under the provisions of Order XLI Rule 5. There is no reason why decrees for payment of money should receive a consideration different from the other decrees in the matter of stay pending appeals. In suitable cases, where the court is satisfied that substa....
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....ays available to the successful party. Still the power is there, of course a discretionary power, and is meant to be exercised in appropriate cases." (Emphasis supplied) 68. In Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd., reported in (2005) 1 SCC 705, this Court while deciding a litigation arising from the Delhi Rent Control Act, 1958 observed as under:- "6. The order of eviction passed by the Rent Controller is appealable to the Rent Control Tribunal under Section 38 of the Act. There is no specific provision in the Act conferring power on the Tribunal to grant stay on the execution of the order of eviction passed by the Controller, but sub-section (3) of Section 38 confers the Tribunal with all the powers vested in a court under the Code of Civil Procedure, 1908 while hearing an appeal. The provision empowers the Tribunal to pass an order of stay by reference to Rule 5 of Order 41 of the Code of Civil Procedure, 1908 (hereinafter "the Code" for short). This position was not disputed by the learned Senior Counsel appearing for either of the parties. xxx 8. It is well settled that mere preferring of an appeal does not operate as stay on ....
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....f discretion while passing an order and formulating the terms to put the parties on. [...]" (Emphasis supplied) 69. In Malwa Strips (supra), this Court after looking into the decision in Sihor Nagar Palika (supra) observed as under :- "9. In terms of sub-rule (5) of Rule 5 of Order 41, the court shall not make an order staying the execution of the decree notwithstanding anything contained in the foregoing sub-rules, where the appellant fails to make the deposit or furnish the security specified in sub-rule (3) of Rule 1. We will proceed on the assumption that although the word "shall" has been used in Order 41 Rule 1(3) of the Code, the same is not mandatory in character, and, thus, may be read as directory. 10. In Rajasthan SEB v. Ram Deo [AIR 1999 Raj 264] after noticing some of the aforementioned decisions as also the legislative history of the said provision, a learned Single Judge of the Rajasthan High Court held as under: (AIR pp. 267-68, para 19) "19. After close scrutiny of the aforesaid observations, I am of the opinion that in view of the provisions of sub-rule (5) of Rule 5 of Order 41 CPC it cannot be held that appeal against the decree ....
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....direct either deposit of the amount disputed in the appeal or to permit such security in respect thereof being furnished as the appellate court may think fit. Needless to say that the discretion is to be exercised judicially and not arbitrarily depending on the facts and circumstances of a given case. Ordinarily, execution of a money decree is not stayed inasmuch as satisfaction of money decree does not amount to irreparable injury and in the event of the appeal being allowed, the remedy of restitution is always available to the successful party. Still the power is there, of course a discretionary power, and is meant to be exercised in appropriate cases." To the same effect is the decision of this Court in B.P. Agarwal v. Dhanalakshmi Bank Ltd. [(2008) 3 SCC 397] 12. The High Court in this case failed to notice the provisions of sub-rule (3) of Rule 1 of Order 41. The appellate court, indisputably, has the discretion to direct deposit of such amount, as it may think fit, although the decretal amount has not been deposited in its entirety by the judgmentdebtor at the time of filing of the appeal. But while granting stay of the execution of the decree, it must take ....
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....ld decisions of various High Courts on the subject. In the case of A.A. Khan v. Ameer Khan, reported in 1949 SCC OnLine Kar 11, the High Court of Mysore has observed as follows (headnote):- "The court can stay execution of money decrees pending appeal on such security as it deems fit in proper cases in which sufficient cause for a stay has been made out, without requiring in all cases that the decree amount should be deposited in court." (Emphasis supplied) 72. Similarly, the Division Bench of the Saurashtra High Court in the case of Borough Municipality v. Firm Ramji Vashram, reported in AIR 1955 Guj 113, has in terms held that the judgment of the Bombay High Court in the case of Dhunjibhoy Cowasji Umrigar v. Lisboa, reported in ILR 1889 13 Bom 252, cannot serve as a useful guide for cases under Order XLI Rule 5 of the CPC. It is further observed therein that when the Bombay High Court decided the case of Dhunjibhoy (supra), the provisions of the Civil Procedure Code, 1882, were applicable and therein, there was no provision similar to that of Order XLI Rule 5 of the CPC. The relevant observations read thus:- "6. We are not concerned with sub-rule (4)....
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....in Court. The above decision therefore cannot serve as an useful guide for the cases under O. 41 R. 5." (Emphasis supplied) 73. In the case, Movie Enterprises v. M.S. Periasamy Mudaliar, reported in 1952 SCC OnLine Kar 14, the High Court of Mysore has observed as under (headnote): "Order 41, rule 5, cannot be read as imposing any limitation that the decrees for payment of money should receive a consideration different from the other decrees in the matter of stay pending appeal. Therefore, there could be no restriction on the discretion of the court for staying a decree for payment of money in suitable cases where the court is satisfied that substantial loss will result to the applicant if no stay is made. In this view, it cannot be contended that a decree directing payment of money should not be stayed unless the decree amount is lodged into court." (Emphasis supplied) 74. In Borough Municipality (supra), the Saurashtra High Court referred to the Bombay High Court decision in the case of Dhunjibhoy (supra). We must look into this decision of Dhunjibhoy (supra). 75. In the case of Dhunjibhoy (supra), the Bombay High Court had observed that no stay of executio....
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....sthan High Court in the case of Bansidhar v. Pribhu Dayal, reported in 1952 SCC OnLine Raj. 80. Then the question is: Is there an established practice that the execution of money decree should not be stayed unless the judgment debtor deposits the decretal amount in court, and on such deposit, the successful party be permitted to withdraw the money on furnishing security to the satisfaction of the court. We do observe that in a large number of cases where a money decree is passed, this Court generally does not grant stay unless the defendant deposits the amount in court. But this appears to be a rule of prudence and not a principle of law of universal application. We also believe and hold that this practice based on the rule of prudence should ordinarily be followed by appellate courts. 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. [See: Central Bank of India v. State of Gujarat, reported in (1987) 4 SCC 407] 81. Hence, ....
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....edge" of the date of hearing and sufficient time to appear. It was sought to be argued vehemently that the delivery of suit papers and the order granting ex parte injunction dated 12.10.2020 could be said to be valid service of summons. In this regard, strong reliance was sought to be placed on the decision of this Court in the case of Sunil Poddar (supra) and the Delhi High Court judgment in the case of LT Foods (supra) respectively referred to above. 89. We do not find any merit in the aforesaid submission, for the simple reason that the second Proviso to Order IX Rule 13 of the CPC would come into play only when there is "irregularity" in the service of summons (for instance, the publication in wrong newspaper, no acknowledgment on duplicate summons being received etc). 90. This has been well explained by this Court in its decision in Basant Singh v. Roman Catholic Mission, reported in (2002) 7 SCC 531. In the case in hand, the High Court has noted that prima facie there was nothing on record to establish valid service of "summons". If that be so, the second Proviso would not come into play. This proposition is again well explained by this Court in its decision Sushil Kuma....
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....019) 8 SCC 112. 96. Section 36 reads thus: "36. Enforcement.-(1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court. (2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose. (3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing: Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard t....
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....court. In the said case, the constitutional validity of Section 87 of the Arbitration Act as inserted by Section 13 of the Arbitration and Conciliation (Amendment) Act, 2019 (for short, "the Amendment Act, 2019") was challenged along with repeal of Section 26 of the Amendment Act, 2015 by Section 15 of the Amendment Act, 2019. This Court in the final analysis held as under: i. The language of Section 36 of the Arbitration Act does not warrant an automatic stay on the enforcement of an arbitral award due to the mere filing of a Section 34 petition. ii. The legislature, by inserting Section 87 and deleting Section 26 through the Amendment Act, 2019, had subverted the purpose of the Arbitration Act, 1996 and the Amendment Act, 2015, and was contrary to public interest because it sought to revive the pre-2015 Amendment automatic stay regime that was a major cause of delay to the disposal of arbitral proceedings, and thus, the Court declared Section 13 and 15 of the Amendment Act, 2019 as manifestly arbitrary and unconstitutional as being violative of Article 14 of the Constitution. iii. The ratio in the BCCI v. Kochi Cricket Pvt. Ltd., reported in (2018) 6 SC....
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....he judgment-debtor needs to make out more than a prima facie case of fraud or corruption, or something analogous to the same, and it is just not sufficient to point out our serious infirmities in the judgment granting money decree. 105. In the aforesaid context, we must look into the decision of this Court in the Sepco Electric (supra). In the said decision, this Court was dealing with an appeal against a judgment of the Delhi High Court where the learned Single Judge had granted a stay of the arbitral award subject to deposit of 100% of the award amount. This order was passed in an application filed under Section 9 of the Arbitration Act which was heard together with an application under Section 36(3) of the Act in a connected petition. This decision was affirmed in appeal by this Court which held that there were no grounds made out for interfering with the judgment below. 106.This Court, while considering the contention of the appellant therein observed that a court may grant an unconditional stay if it is appropriate to do so. While so observing, this Court stated that unconditional stays were covered by the second Proviso to Section 36(3). The relevant portions of the jud....
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....o interfere. The Appeals are dismissed. ......" 109.After arriving at such a finding, this Court proceeded to dismiss the appeal. Therefore, the observations referred to above formed part of this Court's reasoning in arriving at its decision. 110.The aforesaid observations of this Court would suggest that the Court thought it fit to consider the merits of the award at a prima facie level in order to decide whether the conditional stay of the award was justified or not. In the facts of the present case, the Court felt that it was justified. 111.In light of the abovementioned observations, it is possible to legitimately argue that if the second Proviso to Section 36(3) was the sole source for granting an unconditional stay, there would have been no occasion for the Court to examine whether any prima facie cogent ground that went to the root of the award is forthcoming or not. Therefore, by relying upon this Court's observations, it could be plausibly argued that in exceptional cases an unconditional stay can be granted even in cases not arising under the second proviso to Section 36(3). Such unconditional stay would instead be relatable to the main part of Section 36(3). ....
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....'security' and 'deposit'. The Court also referred to the implications of a provision introduced during the colonial period and its continuance in the present constitutional setup. 116.This Court in Pam Developments (supra) held that the phrase "due regard" would only mean that the provisions of CPC are to be taken into consideration and not that they are mandatory. The relevant observations are extracted below: "20. In our view, in the present context, the phrase used is "having regard to" the provisions of CPC and not "in accordance with" the provisions of CPC. In the latter case, it would have been mandatory, but in the form as mentioned in Rule 36(3) of the Arbitration Act, it would only be directory or as a guiding factor. Mere reference to CPC in the said Section 36 cannot be construed in such manner that it takes away the power conferred in the main statute (i.e. the Arbitration Act) itself. It is to be taken as a general guideline, which will not make the main provision of the Arbitration Act inapplicable. The provisions of CPC are to be followed as guidance, whereas the provisions of the Arbitration Act are essentially to be first applied. Since, the Arbitration....
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....decision of the Bombay High Court in the case of ITD Cementation India Ltd. v. Urmi Trenchless Technology Pvt. Ltd., reported in 2020 SCC OnLine Bom 10611, wherein the High Court after referring to and relying upon Pam Developers (supra) observed as under: "11. The provision of Section 36(3) are clear, that one must have regard to the provisions of the Code of Civil Procedure 1908 ("CPC") and specifically the provisions of Order 41 Rule 5 while addressing the question of stay. The words 'have due regard' have received judicial interpretation. Certainly there is no blanket prohibition barring a Court from unconditionally staying either a money award or a money decree. The three-fold requirement of Order 41 Rule 5(3) will have to be kept in mind. But, as the Supreme Court held in Pam Developers Private Limited v. State of West Bengal (2019) 8 SCC 112 the provisions of Order 41 Rule 5 are for guidance. They do not indicate that a Section 36 Court lacks all discretion to grant an unconditional stay. That said, it is equally well settled that a strong and exceptional case must be made for unconditional stay of a money decree or a money award. The three matters to consider under....
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....n of judgment took place solely in the presence of the plaintiff Lifestyle, may not sustain legal scrutiny. 169. The learned Single Judge has repeatedly observed, in the impugned judgment, that Amazon Tech was deliberately staying away from the proceedings despite being aware of their pendency, and has relied, for the said purpose, on the order dated 5 September 2022 passed in the suit. A reading of the order discloses that the appearance of Counsels are noted only for Defendant 2 Cloudtail and Defendant 3 ASSPL. The mere fact that learned Senior Counsel appearing for Cloudtail advanced a submission, on behalf of his client as well as on behalf of Amazon Tech, that they were willing to suffer reasonable damages, cannot be seen as proof of Amazon Tech being aware of the proceedings or deliberately refraining from participating therein. Even prior to this date, Amazon Tech had been proceeded ex parte on 20 April 2022. As a matter of fact, therefore, Amazon Tech was never present before the learned Single Judge on any date of hearing. 170. When one peruses the orders passed in the suit, vis-à-vis the notings of the Registry, it becomes apparent that, in fact, ....
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....o enter appearance in a suit, unless summons in the suit are served on it. The Commercial Courts Act, 2015 contains strict provisions in that regard. No amount of service, on the defendant, of the papers relating to the suit, by the plaintiff, absent actual summons issued by the suit, can compel a defendant, in law, to enter appearance. The law does not permit a defendant to be proceeded ex parte, even before summons in the suit are served on it. This is plain, and elementary. The learned Single Judge could not, therefore, have proceeded against Amazon Tech ex parte on 20 April 2022, even before formal summons in the suit had been served on it. In doing so, it appears that the learned Single Judge was not made aware of the order passed by the learned Joint Registrar on the immediately preceding date, i.e. 7 July 2021, in which it was specifically noted that there was no report regarding service of the suit on Amazon Tech. In holding that Amazon Tech had not appeared despite service and, therefore, proceeding against Amazon Tech ex parte, therefore, we are of the opinion that the learned Single Judge materially erred in law and on facts. 174. This, by itself, is a lapse ser....
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....n the suit was only Rs. 2,00,05,000/-. There is, therefore, substance in the contention of learned Senior Counsel for Amazon Tech that, without an amendment of the plaint, the damages could not have been enhanced, much less to Rs. 3780 crores. 177. Order VII Rule 7, plainly, does not apply, as it exempts a plaintiff from requiring to claim "general or other relief", apart from the specific relief sought in the plaint. 178. In any event, what lies at stake, here, is something far more empirical. The question that is required to be addressed is whether (i) a claim for damages, assessed in the plaint at Rs. 2,00,05,000/-, could be inflated to Rs. 3780 crores merely in written submissions filed by the plaintiff after conclusion of arguments, without amending the plaint and without even serving a copy of the written submissions on a defendant against whom the enhanced damages were claimed and (ii) the Court would, in such circumstances, have awarded damages in excess of Rs. 336 crores, without any prior opportunity to the concerned defendant to contest the proposed judgment." 126.The second relevant aspect that the Division Bench looked into was the fact that there ....
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....tail. Despite this, para 48 of the plaint alleges that it was an "admitted case of Defendant No 3 (ASSPL) that orders for the infringing product of the Defendant No 1 (Amazon Tech) are being fulfilled by Defendant No 2 (Cloudtail)", without any such "admitted case" being available on record. The plaint does not disclose where this "admission" is to be found. 161. At this juncture, we may also refer to the affidavits dated 21 July 2022 and 1 September 2022 of ASSPL, on which Mr. Pachnanda sought to place reliance as supporting the finding of the learned Single Judge, in the impugned judgment, that Amazon Tech, Cloudtail and ASSPL constitute a "cohesive commercial entity". We find no such inference being forthcoming from the affidavits. In any case, we are not concerned, here, with the interlink, as commercial entities, between Amazon Tech, Cloudtail and ASSPL. They are, admittedly, independent commercial entities, as was, in fact, noted by the learned Single Judge in the order dated 12 October 2020, reproduced in para 19 of the impugned judgement. What is to be seen is whether there was any material to indicate involvement of Amazon Tech in the allegedly infringing activiti....
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....to be awarded by the learned Single Judge. Even the basis for the claim of Rs. 3780 crores, all for the amount of Rs. 336,02,87,000/-which was ultimately awarded, is not to be found anywhere in the pleadings of Lifestyle. 138. The basis for the claim for damages are, at all costs, to be contained in the pleadings of the Plaintiff. It cannot be reserved for evidence. It is a legal truism that evidence cannot traverse the pleadings." 128.The fourth aspect that the Division Bench looked into was the fact that the learned Single Judge had recorded no findings as regards the role of the respondent herein in the alleged infringement. The relevant observations are as under: "142. With greatest respect, it appears to us that the impugned judgement is more concerned with the fact that e-infringement is a new phenomenon, and that it is very difficult to identify the actual players in the act. Paras 42 to 44 of the impugned judgment deal with the menace of e-infringement, and the difficulty in localising liability in such cases. Para 44, in fact, refers to intermediary liability, which is of no particular relevance, as Amazon Tech does not claim itself to be an intermedia....
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....f." The learned Single Judge has treated this sentence, from the order dated 5 September 2022, as recording some kind of a concession, on behalf of Amazon Tech, admitting its liability for infringement and agreeing to pay damages. Significantly, prior to the passing of this order, Amazon Tech had already been proceeded ex parte on 20 April 2022. Even if it were to be assumed that Amazon Tech had agreed, through learned Counsel who appeared on behalf of Cloudtail, to suffer reasonable damages, that statement, if at all, was made at the stage when the damages claimed by Lifestyle were of Rs. 2,00,05,000/-. In the face of this claim, it would be preposterous to hold that the order dated 5 September 2022 amounts to an admission, by Amazon Tech, to suffer damages of Rs. 336,02,87,000/-. Before awarding such damages, therefore, it was incumbent on the learned Single Judge to render specific findings of infringement, or at least of complicity in the infringing activities, by Amazon Tech. With greatest respect, we do not find this to have been done. 146. Para 47 of the impugned judgment observed that Amazon Tech, Cloudtail and ASSPL were "closely related to or interlinked....
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....f, therefore, Cloudtail did affix the mark on the apparel sold by it, it certainly did not do so by virtue of any authorisation or permission granted by the Licensing Agreement dated 23 December 2015. In fact, the Licensing Agreement contained a specific clause proscribing any infringement, by Cloudtail, of the trademark of any third party, and indemnified Amazon Tech in that regard. 149. The observations contained in para 52 of the impugned judgment, extracted by us earlier in paragraph 139, are unsupported by law. In a Licensing Agreement, whereby and whereunder Amazon Tech had only licensed, to Cloudtail, the right to use the 'SYMBOL' mark, we are unable to understand how Amazon Tech could be fastened with liability for use, by Cloudtail, of the mark, with which the Licensing Agreement - and, indeed, Amazon Tech itself - had no concern. 150. Needless to say, a licence by one party to another, to do a particular act, cannot render the first party liable for every infringing or illegal act committed by the second, in the absence of any material to indicate that the commission of the illegal infringing act was also authorised by the license. The findings in para 5....
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.... mark/logo". These findings are, prima facie, entirely in the realm of presumption and conjecture. They reflect an impression, by the learned Single Judge, that Amazon Tech was in a position to indulge in infringing activities by means such as deep discounting - with respect to which there is not even a whisper of an allegation against Amazon Tech in the entire plaint of Lifestyle - and that, therefore, it must have done so. On the face of it, we are of the view that these findings suffer from perversity in law, and cannot, therefore, sustain. 153. Para 99 goes on further to observe that "it is well known reality that all 3 Defendants belong to the Amazon Group of Companies and operate as a cohesive commercial entity". This finding has nothing forthcoming, available on the record, to support it. There is certainly no pleading to that effect. The plaint, filed by Lifestyle, does not allege, even indirectly, that Amazon Tech, Cloudtail and ASSPL constituted a "cohesive commercial entity". A finding that 3 companies, which are independent corporate ventures, constitute a cohesive commercial entity, cannot be returned without any pleading to that effect. We are constrained to ....
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.... of service." 133.In the case in hand, what is important for us to note is the Order passed by the Joint Registrar (Judicial) of the High Court of Delhi dated 01.03.2021 which reads thus: "CS(COMM)443/2020 "1. Written statement filed by the defendant No. 2 & 3 with affidavit of admission/denial. 2. Replication to the written statement of the defendant no.3 with affidavit of admission/denial of the documents has been filed by the plaintiff. 3. It is submitted by counsel for the plaintiff that replication and affidavit of admission/denial of the documents qua the defendant no.2 has also been filed but the same is lying under scrutiny. Let necessary steps be taken to ensure that replication and affidavit of admission/denial of the documents are placed on record. 4. Affidavit of service filed by the plaintiff reflects that entire paper book was delivered to the defendant no.1 through speed post and courier. However, from the report of the Registry it appears that PF was not filed for service of the defendant no.1 and summons of the suit through e-mail and Whatsapp were not issued to the defendant no.1 as per orders of the Hon'ble....
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....should be cogent and adequate. The reasons assigned must indicate the necessity for the status quo prevailing on the date of the decree and/or the date of making of the application for stay, to continue by granting stay, and not merely the reasons why stay should be granted. (VI) Although, Order XLI Rule 5 of the CPC, uses the word "shall", yet a combined reading of the sum and substance of Rule(s) 1(3) and 5(5) would reveal, that for the grant of stay of execution, it is not mandatory for the appellate court to impose a condition for deposit of the amount in dispute. The aforesaid provisions make it abundantly clear that the appellate court, for the grant of stay of execution, has a discretion to impose a condition of deposit of the amount depending on the facts and circumstances of each case. (VII) A deposit is not a condition precedent for an order of stay of execution of the decree by the appellate court. The only guiding factor and statutory mandate, for the grant of such stay of execution as indicated in Rule 5, is the existence of "sufficient cause" in favour of the appellant, on the availability of which the appellate court would be inclined to pass an ord....