Central
Bank of India Vs. State of Gujarat & Ors [1987] INSC 249 (11 September
1987)
MISRA
RANGNATH 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]
CIVIL
APPELLATE JURISDICTION: Civil Appeal No. 2200 of 1987.
From
the Judgment and order dated 11 23.4. 1986 of the 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 decrial 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 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.
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