Holding

A stay of execution of a money decree may be granted unconditionally without a deposit; the deposit requirement is discretionary, not mandatory, and the High Court’s order is upheld.

Summary

Lifestyle Equities sued Amazon Technologies for alleged trademark infringement and obtained a money decree of Rs.336.02 crore. Amazon appealed and sought a stay of execution under Order XLI Rule 5(1) and (3) of the CPC without depositing the decretal amount. The Delhi High Court granted an unconditional stay, prompting a Special Leave Petition before this Court. The Supreme Court examined the statutory language of Order XLI Rule 5 and Rule 1(3), the legislative history, and precedent, concluding that the word “shall” is directory and a deposit is not a condition precedent for a stay; the appellate court may grant an unconditional stay if an exceptional case showing sufficient cause exists. Finding no error in the High Court’s exercise of discretion, the Court dismissed the petition.

Issues considered

Whether the High Court erred in granting an unconditional stay of execution of a money decree without requiring the appellant to deposit the decretal amount.
Whether Order XLI Rule 1(3) and Rule 5(5) of the CPC impose a mandatory condition of deposit for a stay of execution.
What constitutes ‘sufficient cause’ and an ‘exceptional case’ for granting an unconditional stay under Order XLI Rule 5.

Legislation cited

Arbitration and Conciliation Act, 1996s. Section 36(3)
Code of Civil Procedure, 1908s. Order XLI Rule 1(3), s. Order XLI Rule 5, s. Order XLI Rule 5(5)

Headnote

Issue for Consideration Whether the Division Bench of the High Court committed any error in passing the impugned judgment and order by which the application filed by the respondent herein (judgment debtor-original defendant) under Order XLI Rule 5(1) and Rule Code, 1908, respectively came to be allowed and thereby the Court granted stay of the execution of the money decree suffered by the respondent without insisting for the deposit of the decretal amount. Headnotes† Code of Civil Procedure, 1908 – Or.XLI, r.5 – Stay by Appellate

Subjects

Order XLI Rule 5Civil Procedure Codestay of executionmoney decreeunconditional staysufficient causeexceptional caseservice of summonstrademark infringementex parte proceedings

Judgment

[2025] 10 S.C.R. 463 : 2025 INSC 1190

Lifestyle Equities C.V. & Anr.
v.
Amazon Technologies INC.
(Petition for Special Leave to Appeal (C) No. 19767 of 2025)
07 October 2025
[J.B. Pardiwala* and K.V. Viswanathan, JJ.]

Issue for Consideration
Whether the Division Bench of the High Court committed any error in
passing the impugned judgment and order by which the application
filed by the respondent herein (judgment debtor-original defendant)
under Order XLI Rule 5(1) and Rule 5(3), Civil Procedure Code,
1908, respectively came to be allowed and thereby the Court
granted stay of the execution of the money decree suffered by the
respondent without insisting for the deposit of the decretal amount.

Headnotes†
Code of Civil Procedure, 1908 – Or.XLI, r.5 – Stay by Appellate
Court – Interpretation:
Held: Although, Or.XLI r. 5 uses the word “shall”, yet a combined
reading of the sum and substance of rr.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 – 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 – 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
r.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 order of stay – For the grant of benefit of an unconditional
stay of execution of a decree, an exceptional case has to be made
out before the appellate court – This discretion of the appellate
court to grant an unconditional stay of execution of decree must
not be exercised arbitrarily – It must be exercised sparingly and
only if an exceptional case is made out for such stay in view of

* Author
464 [2025] 10 S.C.R.

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the peculiar facts and attending circumstances of the case before
it – In the present case, the High Court looked into various relevant
aspects for the purpose of granting benefit of unconditional stay
of execution of money decree viz., that the suit had proceeded in
the absence of the respondent herein; there were no pleadings
of infringement against the respondent herein; no pleadings for
the purpose of claiming Rs. 3,36,02,87,000/- towards damages;
Single Judge had recorded no findings as regards the role of the
respondent herein in the alleged infringement – No error committed
by Division Bench in passing the impugned judgment, upheld.
[Paras 134 VI-VIII, 125-129]

Code of Civil Procedure, 1908 – Or.XLI, r.5 – “exceptional case”
for granting benefit of unconditional stay of the execution of
money decree:
Held: A case within the purview of “exceptional case” for the
purpose of granting benefit of unconditional stay of the execution
of money decree by the appellate court would be, if the money
decree in question- (i) is egregiously perverse; (ii) is riddled with
patent illegalities; (iii) is facially untenable; and/or (iv) such other
exceptional causes similar in nature. [Paras 134, 82-87]
Code of Civil Procedure, 1908 – Or.XLI – Grant of benefit of
stay of execution of a decree by an appellate court – Law
w.r.t, summarized. [Para 134]

Code of Civil Procedure, 1908 – Or.XLI, r.5:
Held: For the purpose of the grant or refusal of stay of execution of
the decree under r.5 of Or.XLI, it is immaterial whether the decree
is a money decree or any other decree – Or.XLI, r.5 makes no
distinction between a money decree and other decrees, and the
said provision applies with full rigour in both instances – Yet as a
rule of prudence and established practice evolved over a period of
time, no stay of execution of a money decree should be granted,
except on the condition that the decretal amount be deposited in
the court – However, such condition for deposit is not mandatory
and non-prescription thereof does not operate as a bar to staying
the execution of a money decree – Further, there is no provision
u/Or.XLI, r.5 imposing a mandate to deposit cash security as the
only mode of security for execution of the decree – Security, for
the purpose of the said provision, can be in the shape of property,
[2025] 10 S.C.R. 465

Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

bond and or in the form of an appropriate undertaking from the
appellant to abide by the decree, seeking stay of execution.
[Para 134 X, XI]

Code of Civil Procedure, 1908 – Or.XLI r.1(3) – Obligation
under – Nature – Mandatory or directory:
Held: Though Or.XLI r.1(3) is couched with the expression “shall”
but, obligation under Or.XLI r.1(3) is not mandatory but directory in
nature – 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. [Paras 62, 63]
Interpretation of Statute – Code of Civil Procedure, 1908 –
Or.XLI, rr.5(1), (3) – Interpretation of a provision of a statute –
Principles to be followed, enumerated. [Paras 55-70]
Code of Civil Procedure, 1908 – Second Proviso to Or.IX
r.13 – Service of Summons and Irregularity in the Service of
Summons – Plea of the petitioners that in view of the second
Proviso to Or.IX r.13, the defendant could be said to have had
the requisite “knowledge” of the date of hearing and sufficient
time to appear and 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:
Held: No merit in the said submission – Second Proviso to Or.IX r.13
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) –
In the present case, 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. [Paras 89, 90]
Words and Phrases – Code of Civil Procedure, 1908 – Or.XLI,
r.5 – “sufficient cause” – Meaning and import of, explained.
[Paras 78, 80-70]

Arbitration and Conciliation Act, 1996 – s.36(3) – Code of Civil
Procedure, 1908 – Or.XLI, r.5 – Plea of the plaintiffs that courts
cannot grant the benefit of unconditional stay of an award
in cases other than those covered by the second Proviso
to s.36(3) and when it comes to staying a money decree
unconditionally, the judgment-debtor needs to make out more
466 [2025] 10 S.C.R.

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than a prima facie case of fraud or corruption, or something
analogous to the same, and it is just not sufficient to point
out serious infirmities in the judgment granting money decree:
Held: It is difficult to accept the submission that even for the
purpose of grant of benefit of unconditional stay of money decree
under Or.XLI r.5, the judgment-debtor has to make out more
than a prima facie case of fraud or corruption and not solely
on the basis of an extreme or egregious view on the merits of
the adjudication – The analogy of s.36, Arbitration Act sought to
be applied is inappropriate – The decision of this Court in Pam
Developments should also be understood and confined only to
matters relating to arbitration, more particularly, s.36, Arbitration
Act – If fraud or corruption or something analogous to the same is
only to be seen for the purpose of granting benefit of unconditional
stay of execution of money decree then in such circumstances,
the decree holder may argue that although there may not be a
valid service of summons to the defendant/judgment-debtor yet,
the same by itself would not be sufficient to grant the benefit of
unconditional stay of execution of money decree. [Paras 122-124]

Case Law Cited
Sunil Poddar and Others v. Union Bank of India [2008] 1 SCR
261 : (2008) 2 SCC 326 – distinguished.
Malwa Strips Pvt. Limited v. Jyoti Limited [2008] 17 SCR 1297 :
(2009) 2 SCC 426; Kayamuddin Shamsuddin Khan v. State Bank
of India (1998) 8 SCC 676 – relied on.
Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai & Co. (2005)
4 SCC 1; Mithilesh Singh v. Union of India [2003] 2 SCR 377 :
(2003) 3 SCC 309; Padma Sundara Rao v. State of Tamil Nadu
[2002] 2 SCR 383 : (2002) 3 SCC 533; Union of India v. Deoki
Nandan Agarwal [1991] 3 SCR 873 : (1992) Supp. 1 SCC 323;
Atma Ram Properties (P) Ltd. v. Federal Motors (P) Ltd. [2004]
Supp. 6 SCR 843 : (2005) 1 SCC 705; Central Bank of India v.
State of Gujarat [1988] 1 SCR 106 : (1987) 4 SCC 407; Basant
Singh v. Roman Catholic Mission [2002] Supp. 3 SCR 70 : (2002)
7 SCC 531; Sushil Kumar Sabharwal v. Gurpreet Singh & Ors.
[2002] 3 SCR 352 : (2002) 5 SCC 377; Sepco Electric Power
Construction v. Power Mech Projects Limited [2022] 7 SCR 343 :
2022 SCC OnLine SC 1243; Pam Developments Private Limited v.
State of West Bengal [2019] 9 SCR 252 : (2019) 8 SCC 112;
[2025] 10 S.C.R. 467

Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

Hindustan Construction Company & Anr. v. Union of India & Ors.
[2019] 17 SCR 331 : (2020) 17 SCC 324; BCCI v. Kochi Cricket
Pvt. Ltd. [2018] 2 SCR 829 : (2018) 6 SCC 287 – referred to.
A.A. Khan v. Ameer Khan, 1949 SCC OnLine Kar 11; Borough
Municipality v. Firm Ramji Vashram, AIR 1955 Guj 113; Dhunjibhoy
Cowasji Umrigar v. Lisboa, ILR 1889 13 Bom 252; Movie
Enterprises v. M.S. Periasamy Mudaliar, 1952 SCC OnLine Kar 14;
Bansidhar v. Pribhu Dayal, 1952 SCC OnLine Raj; LT Foods Ltd. v.
Saraswati Trading Company, 2022 SCC OnLine Del 3694; ITD
Cementation India Ltd. v. Urmi Trenchless Technology Pvt. Ltd.,
2020 SCC OnLine Bom 10611 – referred to.

List of Acts
Code of Civil Procedure, 1908; Arbitration and Conciliation Act,
1996; Limitation Act, 1963; Code of Civil Procedure (Amendment)
Bill, 1974; Code of Civil Procedure (Amendment) Act, 1976; Code
of Civil Procedure (Amendment) Act, 1978; Delhi Rent Control Act,
1958; Civil Procedure Code, 1882; Arbitration and Conciliation
(Amendment) Act 2015; Arbitration and Conciliation (Amendment)
Act, 2019; Arbitration Act, 1996; Arbitration and Conciliation
Amendment Act, 2021.

List of Keywords
Order XLI Rule 5, Civil Procedure Code, 1908; Stay by Appellate
Court; Order XLI Rule 5(1) and Rule 5(3), Civil Procedure Code,
1908; Money decree; Order XLI Rule 1(3), Civil Procedure Code,
1908; Stay of the execution of money decree; Without deposit of
decretal amount; Condition for deposit of amount in dispute; Decretal
amount; Deposit; Security; “exceptional case”; “sufficient cause”;
Unconditional stay of execution of money decree; “irregularity” in
the service of summons; No valid service of “summons”; Trademark;
Infringement; Beverly Hills Polo Club; Lifestyle Equities; Amazon
Seller Services.

Case Arising From
EXTRAORDINARY APPELLATE JURISDICTION: Special Leave
Petition (Civil) No. 19767 of 2025
From the Judgment and Order dated 01.07.2025 of the High Court
of Delhi at New Delhi in CMAPPL No. 26455 of 2025.
468 [2025] 10 S.C.R.

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Appearances for Parties
Advs. for the Petitioners:
Mukul Rohatgi, Gaurav Pachnanda, Sr.Advs., Sidhant Goel, Mohit
Goel, Ms. Garima Bajaj, Dipankar Mishra, Ms. Karmanya Dev
Sharma, Udbhav Gady.
Advs. for the Respondent:
Saikrishna Rajagopal, Sidharth Chopra, Ms. Sneha Jain, Devvrat
Joshi, Angad Makkar, Ms. Swikriti Singhania.

Judgment / Order of the Supreme Court

Judgment

J.B. Pardiwala J.,

For the convenience of exposition, this judgment is divided into the
following parts:-

INDEX*

A. FACTUAL MATRIX ............................................................. 3
B. SUBMISSIONS ON BEHALF OF THE PLAINTIFFS ......... 11
C. SUBMISSIONS ON BEHALF OF THE DEFENDANT ....... 13
D. REJOINDER TO THE SUBMISSIONS CANVASSED ON
BEHALF OF THE DEFENDANTS ...................................... 15
E. ANALYSIS ........................................................................... 16
i. History of the Legislation in Question ......................... 18
ii. Principles required to be 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

* Ed. Note: Pagination as per the original Judgment.
[2025] 10 S.C.R. 469

Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

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 dismissal of the Special Leave Petition,
no orders are required to be passed on the application for
intervention/impleadment and the same stands disposed of.
6. However, reasons to follow by a separate Order.”
2. This petition arises from the judgment and order passed by the High
Court of Delhi, dated 01.07.2052 in the CM Application No. 26455
of 2025 filed in the RFA(O.S.)(COMM) No.11 of 2025 by which the
application filed by the respondent herein (judgment debtor-original
defendant) under Order XLI Rule 5(1) and Rule 5(3) of the Civil
Procedure Code, 1908, (for short, “the CPC”) respectively came
to be allowed, and thereby the Court stayed the operation of the
judgment and money decree dated 25.02.2025 passed by a learned
Single Judge in the suit instituted by the petitioner herein. In short,
the Division Bench of the High Court granted stay of the execution
of the money decree suffered by the respondent herein without
insisting for the deposit of the decretal amount.
470 [2025] 10 S.C.R.

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3. For the sake of convenience, the petitioners herein shall be referred
to as the original plaintiffs and the respondent herein shall be referred
to as the original defendant.

A. FACTUAL MATRIX
4. The plaintiffs along with its subsidiaries and licensees claim to be
engaged in the business of manufacturing, distribution and sale of
a wide range of products including garments, apparels, footwear
for men, women and children, furniture, textiles, watches and other
lifestyle/personal care products under the trademark Beverly Hills
Polo Club (hereinafter referred to as, “BHPC”).
5. The plaintiff No. 1 is an Amsterdam based company and is the
proprietor of the BHPC trademark and claims to hold exclusive rights
for its use and commercialisation. The BHPC trademark consists of a
distinctive look featuring a charging Polo pony with a mounted rider
wielding a raised polo stick (mallet) symbolising the sport of Polo.
6. The plaintiff no. 2 is the licensee of the said trademark pursuant to the
Master License and Licensing Service Agreement dated 20.05.2008.
7. The plaintiffs instituted Civil Suit (COMM) No. 443 of 2020 in the Delhi
High Court, inter alia, seeking permanent injunction and damages
against the defendant for the alleged infringement of their registered
trademark BHPC.
8. It is the case of the plaintiffs that they are the rightful proprietors of
the BHPC Mark which 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
[2025] 10 S.C.R. 471

Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

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 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 imitation of, or is a deceptive variant of, and/
or includes the Plaintiffs’ artistic Logo Mark amounting to
infringement of the Plaintiffs’ copyright in the said logo.
c. Decree for permanent injunction restraining the
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 using in any manner
whatever, the infringing Logo Mark or any other mark or
logo/device, which is identical to, or is a deceptive variant
of and/or deceptively similar to and/or includes the Plaintiff’s
well known Logo Mark amounting to passing off of the
goods/services and/or business of the Defendants for those
of the Plaintiffs, dilution of goodwill and unfair competition.
d. A decree for delivery up of all products and material
including stationery, visiting cards, hill boards, brochures,
promotional material, letter-heads, cash memos, sign
boards, sign posts, leaflets, cartons, or any other items of
whatsoever, bearing the infringing Logo Mark and/or any
other mark, logo or device which may be identical and/
or deceptively similar, or is a deceptive variant of and/or
includes the Plaintiff’s well-known Logo Mark.
e. A decree for damages amounting to Rs. 2,00,05,000/-
(Rupees Two Crores and Five Thousand only) or any such
amount as found due in favour of the Plaintiffs. The Plaintiffs
472 [2025] 10 S.C.R.

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submit that the valuation of damages is an approximate
figure only, and the Plaintiffs undertake to pay further
Court fees as may be determined by this Hon’ble Court
upon the damages that the Plaintiffs are able to prove in
the course of trial.
f. An order for rendition of accounts of profits in favour of
the Plaintiffs and against the Defendants to ascertain the
profits made by Defendants through sale of its apparel
products or any other products which bear the infringing
Logo Mark. 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 institution of the suit by the plaintiffs the following
Order dated 12.10.2020 came to be passed:
“1. Allowed, subject to all just exceptions.
2. Original documents, if any, be filed within two weeks
of the resumption of the normal functioning of the Court.
3. Application is disposed of.
[2025] 10 S.C.R. 473

Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

I.A. 9256/2020 (under Order XI Rule 1 (4) Commercial
Courts Act)
1. Additional documents, if any, be filed within 30 days.
2. Application is disposed of.
Signing Date:13.10.2020 07:06:56 This file is digitally
signed by PS to HMJ Mukta Gupta CS(COMM) 443/2020
I.A. 9254/2020 (under Order XXXIX Rule 1 and 2 CPC)
1. Plaint be registered as a suit.
2. Issue summons in the suit and notice in the application
to the defendants.
3. Learned counsel for the defendant No.2 and defendant
No.3 accept summons in the suit and notice in the
application.
4. Summons in the suit and notice in the application be
now issued to defendant No.1 on the plaintiff taking steps
through email and whatsapp, returnable before this Court
on 2nd February, 2021.
5. Written statement and reply affidavit along with affidavit
of admission/denial be filed within 30 days of the receipt
of summons in the suit and notice in the application.
6. Replication and rejoinder affidavit, along with affidavit
of admission/denial, be filed within three weeks thereafter.
7. Case of the plaintiff is that the plaintiff is a brand-owner
of “BEVERLY HILLS POLO CLUB” which was established
by its predecessors in the year 1981. The first registration
for the trademark “BEVERLY HILLS POLO CLUB” was
applied on 3rd December, 1992 and thereafter the plaintiff
has number of registrations for the said mark. The mark of
the plaintiff is a device mark, that is, and the plaintiff is the
owner of the registered trademark and the copyright thereof.
8. Grievance in the present suit of the plaintiff is limited to
defendant No.1 which is a group company of defendant
No.3 but not working as an intermediary but is selling its
own brand, copying the logo of the plaintiff as….. It is
thus claimed that by infringing the plaintiff’s device mark
474 [2025] 10 S.C.R.

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as also the copyright in the logo, the defendant No.1 is
selling its goods representing them to be as the plaintiff’s
brand. Learned counsel further states that defendant No.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 matter and take down
any further listing which is either on the defendant No.3’s
platform or any other platform.
11. Case of the plaintiff is that in the earlier suit, that is,
CS (COMM) No.1015/2018, the plaintiff had impleaded
parties who were selling their products on the defendant
No.3’s listing by infringing the plaintiff’s device mark and
the copyright and in the earlier suit the defendant No.1
was not a party and in the present suit, not only does
the plaintiff seek delisting of the brand of the defendant
No.1 from the defendant No.3’s platform but also seeks
the relief of injunction against the defendant No.1 which
is infringing and diluting the plaintiff’s mark by selling its
products on a much cheaper rates representing to be that
of the plaintiff.
[2025] 10 S.C.R. 475

Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

12. Considering that the defendant No.1 is a separate
entity, this Court is prima facie of the view that the
present suit would be maintainable. From the averments
in the plaint as also the documents filed therewith,
this Court finds that the plaintiff has made out a prima
facie case in its favour and in case no ex-parte ad-
interim injunction is granted, the plaintiff would suffer
an irreparable loss. Balance of convenience also lies
in favour of the plaintiff. Consequently, till the next date
of hearing, defendant No.1 and defendant No.2, their
Partners, Directors, Proprietors, Shareholders, Affiliates,
Licensees, Agents etc. are restrained from selling,
offering for sell, advertising, directly or indirectly dealing
in any products or reproducing or using in any manner
whatsoever the infringing logo mark which is identically/
deceptively similar to the plaintiff’s logo mark “BEVERLY
HILLS POLO CLUB”. In the meantime, defendant No.3
is directed to take down the products of the defendant
No.1 with the infringing logo within 72 hours of the URLs
being provided by the plaintiff.
13. Compliance under Order XXXIX Rule 3 CPC be made
within one week.”
14. Thus, the Court while registering the plaint as a suit noted that the
defendant No. 1, i.e., the respondent before us despite an advance
notice failed to enter appearance, and accordingly granted an ex
parte ad interim injunction restraining the defendants, their partners,
directors, proprietors, shareholders, etc., from selling, offering for
sale, advertising, directly or indirectly dealing in any products which
is identically/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,
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(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 USD 33.78 million
(Rs.292,70,37,000,00/)
1B Increased Advertising & USD 5 million
Promotional Expenses (Rs.43,32,50,000.00/-)
1C Total Compensatory USD 38.78 million
Damages (Rs.336,02,87,000.00/)
2 Costs Rs.3,23,10,966.60/-
along with the Court Fee.
3 Grand Total (Damages Rs.339,25,97,966.60/- +
+ Costs) Court Fee

123. Decree sheet be drawn up in the above terms.
124. The suit along with all pending applications, if any
are disposed of.”
16. The defendant being dissatisfied with the judgment and money decree
passed by the learned Single Judge of the High Court challenged
the same by filing RFA (O.S.) (COMM) No. 11 of 2025.
17. In the appeal filed by the defendant, an application was filed under
Order XLI Rule 5(1) and Rule 5(3) of the CPC respectively, seeking
stay of the operation of judgment and money decree passed by the
learned Single Judge referred to above.
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18. The Division Bench of the High Court after hearing the decree-
holders and the judgment-debtor allowed the stay application in the
following terms:
“181. We, therefore, dispose of the present application
by staying the operation of the impugned judgment dated
25 February 2025, passed by the learned Single Judge,
insofar as it awards damages of Rs. 336,02,87,000/-, and
costs of Rs. 3,23,10,966.60/-.
182. This shall, however, be subject to an undertaking
being furnished by the appellant Amazon Tech to comply
with the impugned judgment, in the event of its failing in
the present appeal, to be furnished with the Registry of this
Court within a period of two weeks from pronouncement
of the present judgment.
183. CM Appl 26455/2025 stands flowed to the aforesaid
extent.
184. Observations and findings contained in the present
judgment, we clarify, are only intended to be prima facie
and for the purposes of disposing of the present application.
They shall not be binding on Court while deciding the
present appeal.”
19. In such circumstance referred to above, the original plaintiffs/decree-
holders are here before us with the present petition.

B. SUBMISSIONS ON BEHALF OF THE PLAINTIFFS
20. Mr. Mukul Rohatgi and Mr. Gaurav Pachnanda, the learned Senior
Counsel appearing for the plaintiffs submitted that the Division
Bench of the High Court committed an egregious error in granting
the benefit of unconditional 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.
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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 to fortify the submissions noted
aforesaid, the learned Senior Counsel placed strong reliance on the
decision of this Court in the case of Sihor Nagar Palika Bureau v.
Bhabhlubhai Virabhai & Co., reported in (2005) 4 SCC 1.
24. It was vehemently argued that, if according to the defendant it is a
case of an ex parte decree, i.e., decree passed without service of
valid summons, then why the defendant did not prefer any application
under Order IX Rule 13 of the CPC? Why defendant thought fit to
prefer an appeal against such so called ex parte decree?
25. The learned Senior Counsel invited our attention to the second
Proviso to Order IX Rule 13 of the CPC. Relying on the same, it was
argued that the defendant had the requisite knowledge of the date of
hearing and had sufficient time to appear, file its written statement,
and to contest the suit. It was argued that the delivery of the suit
papers and the order passed by the High Court dated 12.10.2020
granting ex parte injunction subject to compliance of Order XXXIX
Rule 3 of the CPC would amount to adequate service of summons in
accordance with law. To fortify this submission reliance was placed on
the decision of this Court in the case of Sunil Poddar and Others v.
Union Bank of India, reported in (2008) 2 SCC 326, and the decision
of the Delhi High Court in the case of LT Foods Ltd. v. Saraswati
Trading Company, reported in 2022 SCC OnLine Del 3694.
26. It was also submitted by the learned Counsel that the Division Bench
of the High Court committed an egregious error in staying the money
decree on mere asking the defendant to furnish an undertaking on
oath, that in the event, if the appeal is dismissed the defendant shall
deposit the decretal amount. This according to the learned Senior
Counsel cannot be termed as adequate security.
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27. In such circumstances referred to above, the learned Senior Counsel
prayed that there being merit in his petition the same may be allowed
and the impugned judgment and order be set aside, and further
the defendant may be directed to deposit the decretal amount with
interest in the court below.

C. SUBMISSIONS ON BEHALF OF THE DEFENDANT
28. On the other hand, Dr. Abhishek Manu Singhvi, Mr. Neeraj Kishan
Kaul and Mr. Arvind Nigam, the learned Senior Counsel appearing
for the defendant, while vehemently opposing this petition submitted
that no error not to speak 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 deposit of the entire decretal amount with interest.
32. It was argued that the Division Bench of the High Court was fully
convinced that not only any valid summons was not served upon
the defendants and the suit proceeded ex parte, but even on other
counts, the judgment and decree passed by the Court, prima facie,
suffers from various legal infirmities.
33. The learned Senior Counsel submitted that the Division Bench of
the High Court in its impugned judgment and order has recorded
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few shocking facts like the plaintiffs enhancing the claim of damages
consequently from Rs. 2 crore in the plaint to Rs. 3,780 crore at
the stage of written submissions post-trial, and that too without any
amendment and without putting the defendant to notice of such
enhanced claim without any basis in the pleadings. It was argued that
having regard to the gross perversities and illegalities writ large in the
decree and conduct of the suit proceedings, asking the defendant to
furnish security or deposit of any particular amount as a pre-condition
for stay would be wholly disproportionate and excessive.
34. In such circumstances referred to above, the learned Senior Counsel
prayed that there being no merit in the present petition the same
may be dismissed.

D. REJOINDER TO THE SUBMISSIONS CANVASSED ON
BEHALF OF THE DEFENDANTS
35. Mr. Gaurav Pachnanda, the learned Senior Counsel appearing for
the plaintiffs in rejoinder put forward an important submission, which
we must take record and deal with the same.
36. The learned Senior Counsel invited our attention to Section 36(3) of
the Arbitration and Conciliation Act, 1996 (for short, “the Arbitration
Act”). He would submit that the second Proviso attached to Section
36(3) of the Arbitration Act is an indication that ordinarily by applying
the principles of Order XLI Rule 5 of the CPC, as mentioned in Section
36(3) of the Arbitration Act, the Court would not be empowered to
unconditionally stay an arbitration award or a judgment.
37. In the alternative, the learned Senior Counsel sought to argue that,
even if it was to be understood that the second Proviso attached to
Section 36(3) of the Arbitration Act provides that instead of exercising
discretion, the Court must grant unconditional stay in cases of fraud
and corruption, the same would lead to a logical inference that the
discretion to grant an unconditional stay under 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
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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.
(1) 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 preferred from the decree; but the Appellate Court
may for sufficient cause order stay of execution of such
decree.
Explanation-
An order by the Appellate Court for the stay of
execution of the decree shall be effective from
the date of the communication of such order
to the Court of first instance but an affidavit
sworn by the appellant, based on his personal
knowledge, stating that an order for the stay of
execution of the decree has been made by the
Appellate Court shall, pending the receipt from
the Appellate Court of the order for the stay of
execution or any order to the contrary, be acted
upon by the Court of first instance.
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(2) Stay by Court which passed the decree.- Where an
application is made for stay of execution of an appealable
decree before the expiration of the time allowed for
appealing therefrom, the Court which passed the decree
may on sufficient cause being shown order the execution
to be stayed.
(3) No order for stay of execution shall be made under
sub-rule (1) or sub-rule (2) unless the Court making it is
satisfied-
(a) that substantial loss may result to the party
applying for stay of execution unless the order
is made;
(b) that the application has been made without
unreasonable delay; and
(c) that security has been given by the applicant
for the due performance of such decree or order
as may ultimately be binding upon him.
(4) [Subject to the provisions of sub-rule (3)], the Court
may make an ex parte order for stay of execution pending
the hearing of the application.
(5) 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,
the Court shall not make an order staying the execution
of the decree.”

i. History of the Legislation in Question
42. The Bill No. 27 of 1974, being a Bill to amend the CPC and the
Limitation Act, 1963, was introduced in the Lok Sabha on April 8,
1974. The text of the Bill is found published in the Gazette of India,
Extraordinary dated April 8, 1974, in Part-II, Section 2 at pages 203
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
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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 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.”
(Emphasis supplied)

45. In addition, the following provision was sought to be introduced by
way of amendment as sub-rule (1A), after sub-rule (1), in Rule 3 of
Order XLI:
“(1A) Where the appellant fails to make the deposit or
furnish security specified in sub-rule (3) of Rule 1, the
Court shall reject the memorandum of appeal.”
46. Sub-rule (5) of Rule 5 of Order XLI, as now enacted, did not find
place in the Bill, in the same or any other form.
47. The Notes on Clauses annexed to the Bill point out at page 336
that Rule 1 of Order XLI was being amended by introduction of sub-
rule (3) to provide for the deposit, or the furnishing of security for
decretal amount by judgment-debtor when the appeal is against an
order made in execution of a money decree. As regards amendment
of Rule 3 of Order XLI by insertion of sub-rule (1A), it was mentioned
that the provision was meant to provide that where the appellant fails
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to make the deposit of the decretal amount or to furnish security
specified in sub-rule (3) of Rule 1, the memorandum of appeal shall
be rejected.
48. After the Bill was introduced in Lok Sabha on April 8, 1974, the
motion for reference of the Bill to a Joint Committee of the Houses
was moved in Lok Sabha on May 2, 1974, and it was adopted. The
Rajya Sabha concurred in the said motion on May 14, 1974. The
Joint Committee constituted accordingly submitted its Report to Lok
Sabha on April 1, 1976. The Report is found published at pages 804/3
to 804/34 in the Gazette of India, Extraordinary, Part-II, Section 2
dated April 1, 1976. At page 804/21, the Joint Committee offered its
observations in paragraph 65 of the Report with regard to Clause 87
(Original clause 90) of the Bill. The relevant portion from paragraph
65 of the Report of the Joint Committee is extracted hereinbelow:
“65. Clause 87 (Original clause 90),—
(i) The Committee note that under the proposed new sub-
rule (1A) of Rule 3 in Order 41, if the appellant fails either
to deposit the amount disputed in the appeal or to furnish
security for such amount, the memorandum of appeal shall
be rejected. The Committee feel that such a provision will
deprive a judgment-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.
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51. The Code of Civil Procedure (Amendment) Bill, 1974 (Bill No. 27B of
1974) as reported by the Joint Committee is found published in the
Gazette of India, Extraordinary, Part-II, Section 2, dated April 1, 1976
at pages 804/35 to 804. At page 804/111, Clause 87 finds place and
the relevant portions of the said clause are reproduced hereinbelow:
“87. In the First Schedule, in Order 41,—
(i) Rule 1,—
xxx
(b) after sub-rule (2), the following sub-rules shall be
inserted, namely:
“(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.”
(ii)
xxx
(iii) in rule 5,—
(a)
xxx
(b)
xxx
“(5) 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, the Court shall not make an order
staying the execution of the decree.”
(Emphasis supplied)

52. The Bill having been considered and passed by both the Houses of
Parliament was enacted into the Code of Civil Procedure (Amendment)
Act, 1976 (No. 104 of 1976). The Act received the assent of the
President of India on September 9, 1976, and it was published in the
Gazette of India, Extraordinary, Part-II, Section-1, dated September 10,
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1976. The material amendments, namely, the insertion of sub-rule (3)
in Rule 1 and sub-rule (5) in Rule 5 of Order XLI were duly enacted
and stood inserted in the CPC by Section 87 of the Amendment Act,
which is to be found at page 1337 of the Gazette, and they came
into force on and with effect from February 1, 1977.
53. The substance of the legislative history set out hereinabove is that
Clause 90 of Bill No. 27 of 1974 stood materially altered as per clause
87 of Bill No. 27B of 1974, as reported by the Joint Committee, in
the following respects:
“(1) In sub-rule (3) of Rule 1 of Order 41, the provision
relating to the requirement of the appellant depositing the
amount disputed in the appeal or furnishing such security
in respect thereof as the Court may think fit in cases
where the appeal is against an order made in execution
of a decree for payment of money was substituted by the
provision requiring such deposit being made or security
being furnished 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.
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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 primarily to be gathered from the language used, and consequently,
a construction which results in rejection of words as meaningless,
has to be avoided. It is not a sound principle of construction to brush
aside words or phrase in a statute as being inapposite surplusage if
they can have appropriate application in circumstances conceivably
within the contemplation of the statute. In interpretation of statutes,
the courts always presume that the legislature inserted every part
thereof for a purpose and the legislative intention is that every part
of the statute should have effect. The legislature is deemed not to
waste its words, or to say anything in vain. [See: Mithilesh Singh v.
Union of India, reported in (2003) 3 SCC 309].
57. Similarly, in the case of Padma Sundara Rao v. State of Tamil
Nadu, reported in (2002) 3 SCC 533, it was held that two principles
of construction – one relating to casus omissus, and the other in
regard to reading the statute as a whole appear to be well-settled.
Under the first principle, the rule of casus omissus cannot be supplied
by the court except in the case of clear necessity. The rule of casus
omissus should not be readily inferred and for that purpose, all the
parts of a statute or section must be construed together and every
clause of a section should be construed with reference to the context
of the statute and other clauses thereof, so that the construction to
be put on a particular provision makes a consistent enactment of
the whole statute. This would be more so, if literal construction of a
particular clause leads to manifestly absurd or anomalous results,
which could not have been intended by the legislature. Therefore, if
the language is plain, there is no necessity of taking aid of external
aid for gathering the real intention of the legislature.
58. Over and above, we should bear in mind the following well-known
rule of interpretation of the statute reiterated by this Court in the
case of Union of India v. Deoki Nandan Agarwal, reported in 1992
Supp (1) SCC 323:
“It is not the duty of the Court either to enlarge the scope
of the legislation or the intention of the Legislature when
the language of the provision is plain and unambiguous.
The Court cannot rewrite, recast or reframe the legislation
for the very good reason that it has no power to legislate.
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The power to legislate has not been conferred 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 grave consequence for non-compliance
of such condition, was envisaged, namely, to disentitle the appellant
to the benefit of stay of execution of the decree as provided in Rule
5(5) of Order XLI.
60. The aforesaid view has been expressed by this Court in the case of
Kayamuddin Shamsuddin Khan v. State Bank of India, reported
in (1998) 8 SCC 676, wherein it has been held as follows:-
“6. The learned counsel for the respondent has invited
our attention to Sub‐rule (3) of Rule 1 of Order XLI in the
CPC, as amended in the State of Maharashtra, which
reads as under:
“(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:
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Provided that the Court may dispense with the
deposit or security where it deems fit to do so
for sufficient cause.”
7. The submission of the learned counsel for the respondent
is that the High Court was right in giving the direction
regarding the deposit of Rs 75,000 as per the aforesaid
provision and since the appellant has failed to comply
with the same the appeal has been rightly directed to be
dismissed. We, however, find that the only consequence
for non‐compliance with the direction given under Sub‐rule
(3) of Rule 1 of Order XLI is as provided in Sub‐ rule (5)
of Rule 5 of Order XLI which reads as under:
“(5) 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, the Court
shall not make an order staying the execution
of the decree.”
61. It may be apposite to observe that this Court in the aforesaid decision
was dealing with the interpretation of Order XLI Rule 1(3) of the
CPC, as amended in the State of Maharashtra, where the appellate
Court has power to dispense with making deposit or security in fit
and proper cases.
62. In Malwa Strips (supra) this Court interpreted Order XLI Rule 1(3)
of the Code as provided in the Central legislation, i.e., the CPC, and
held that the said provision although couched with the expression
“shall” yet must be read as directory and not mandatory. It quoted
with approval the ratio laid down in Kayamuddin (supra).
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
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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 substantial loss may result
to the applicant, if no stay is granted or there are any exceptional
circumstances, the court may grant stay as prayed for either with
or without any condition whatsoever. Otherwise, in the absence of
any exceptional circumstance, money decree ordinarily would not
be stayed unconditionally from its execution by the appellate court
pending the final disposal of appeal on its own merits.
65. Mere filing of an appeal would not operate as stay of execution of
decree, but the Appellate Court may, for “sufficient cause”, order
stay of execution of decree. The other relevant part of the rule is
contained in sub-rule (3) of Rule 5 of Order XLI. As per the provisions
of sub-rule (3) of Rule 5 of Order XLI, the Court has to see;
(1) whether there will be substantial loss to the party applying for
stay;
(2) whether the application has been made without unreasonable
delay; and
(3) whether security has been given by the applicant for due
performance of the decree.
66. Thus, the provisions of the Rule are very clear and they do not make
any distinction between money decrees and other types of decrees.
67. This Court in Sihor Nagar Palika (supra), observed the following
as regards the power of the Appellate Court to stay the decree in
first appeal:-
“Order 41 Rule 1(3) CPC provides that in an appeal
against a decree for payment of amount the appellant
shall, within the time permitted by the appellate court,
deposit the amount disputed in the appeal or furnish such
security in respect thereof as the court may think fit. Under
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Order 41 Rule 5(5), a deposit or security, as abovesaid,
is a condition precedent for an order by the appellate
court staying the execution of the decree. A bare reading
of the two provisions referred to hereinabove, shows a
discretion having been conferred on the appellate court
to 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.”
(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 the decree or order appealed against
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nor on the proceedings in the court below. A prayer for
the grant of stay of proceedings or on the execution of
decree or order appealed against has to be specifically
made to the appellate court and the appellate court has
discretion to grant an order of stay or to refuse the same.
The only guiding factor, indicated in Rule 5 aforesaid, 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 order of stay. Experience shows that
the principal consideration which prevails with the appellate
court is that in spite of the appeal having been entertained
for hearing by the appellate court, the appellant may not
be deprived of the fruits of his success in the event of
the appeal being allowed. This consideration is pitted and
weighed against the other paramount consideration: why
should a party having succeeded from the court below be
deprived of the fruits of the decree or order in his hands
merely because the defeated party has chosen to invoke
the jurisdiction of a superior forum. Still the question which
the court dealing with a prayer for the grant of stay asks
itself is: why the status quo prevailing on the date of the
decree and/or the date of making of the application for
stay be not allowed to continue by granting stay, and not
the question why the stay should be granted.
9. […]In our opinion, while granting an order of stay under
Order 41 Rule 5 CPC, the appellate court does have
jurisdiction to put the party seeking stay order on such terms
as would reasonably compensate the party successful
at the end of the appeal insofar as those proceedings
are concerned. Thus, for example, though a decree for
payment of money is not ordinarily stayed by the appellate
court, yet, if it exercises its jurisdiction to grant stay in
an exceptional case it may direct the appellant to make
payment of the decretal amount with interest as a condition
precedent to the grant of stay, though the decree under
appeal does not make provision for payment of interest by
the judgment-debtor to the decree-holder. Robust common
sense, common knowledge of human affairs and events
gained by judicial experience and judicially noticeable facts,
over and above the material available on record — all
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these provide useful inputs as relevant facts for exercise
of 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 for payment of money is not
maintainable, if filed without making compliance
with the provisions contained in sub-rule (3) of
Rule 1 of Order 41 CPC and it is the duty of the
Registry to see that on application under Order
41 Rule 5 CPC seeking stay of money decree
the appellant has to incorporate a note in regard
to his readiness and willingness to comply with
the directions under sub-rule (3) of Rule 1 of
Order 41 CPC. If the appeal is preferred against
the decree for payment of money without any
stay application under Order 41 Rule 5 CPC
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then in that event, it is the duty of the appellant
to incorporate a note in the memo of appeal
in respect of his readiness and willingness to
comply with the directions issued by the court
under sub-rule (3) of Rule 1 of Order 41 CPC.”
11. We may, however, notice that although the provisions
of sub-rule (3) of Rule 1 of Order 41 have been held not
to be mandatory, this Court in Kayamuddin Shamsuddin
Khan v. SBI [(1998) 8 SCC 676] opined that non-compliance
with a direction to deposit the decretal amount or part of
it or furnish security therefor would result in the dismissal
of the stay application but not the entire appeal, stating:
(SCC p. 677, para 8)
“8. This would mean that non-compliance with
the direction given regarding deposit under sub-
rule (3) of Rule 1 of Order 41 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.”
To the same effect is the decision of this Court
in Sihor Nagar Palika Bureau v. Bhabhlubhai
Virabhai & Co. [(2005) 4 SCC 1], wherein it was
held: (SCC pp. 2-3, para 6)
“6. Order 41 Rule 1(3) CPC provides that in an
appeal against a decree for payment of amount
the appellant shall, within the time permitted by
the appellate court, deposit the amount disputed
in the appeal or furnish such security in respect
thereof as the court may think fit. Under Order
41 Rule 5(5), a deposit or security, as abovesaid,
is a condition precedent for an order by the
appellate court staying the execution of the
decree. A bare reading of the two provisions
referred to hereinabove, shows a discretion
having been conferred on the appellate court to
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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 judgment-debtor at
the time of filing of the appeal. But while granting stay of
the execution of the decree, it must take into consideration
the facts and circumstances of the case before it. It is not
to act arbitrarily either way. If a stay is granted, sufficient
cause must be shown, which means that the materials on
record were required to be perused and reasons are to be
assigned. Such reasons should be cogent and adequate.
13. The High Court, with respect, failed to notice that suit
was one under Order 37 of the Code. Whether it was
maintainable or not may fall for consideration in the appeal.
Even assuming that the same was not maintainable, the
question which should have been posed by the High Court
was as to whether sufficient cause had been made out
to reverse the decree passed in favour of the appellant.
Even a decree could have been passed having regard
to the defence raised by the respondent under Order 12
Rule 6 of the Code. We, therefore, see no justification at
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all as to why an order of stay of the nature was passed
by the High Court.
14. Even if the said provision is not mandatory, the purpose
for which such a provision has been inserted should be
taken into consideration. An exceptional case has to be
made out for stay of execution of a money decree. The
parliamentary intent should have been given effect to.
The High Court has not said that any exceptional case
has been made out. It did not arrive at the conclusion that
it would cause undue hardship to the respondent if the
ordinary rule to direct payment of the decretal amount or
a part of it and/or directly through the judgment-debtor to
secure the payment of the decretal amount is granted. A
strong case should be made out for passing an order of
stay of execution of the decree in its entirety.”
(Emphasis supplied)

70. Thus, in Malwa Strips (supra), this Court unequivocally observed
that although the word “shall” has been used in Order XLI Rule 5
CPC, yet the same is not mandatory in character. The Court further
observed that the purpose for which such a provision has been
inserted, should be taken into consideration. An exceptional case
has to be made out for unconditional stay of execution of a money
decree. Thus, it is necessary to imply that if an exceptional case is
made out, the Appellate court has the discretion to stay the execution
of the money decree without imposing any condition.

iii. Decisions of various High Courts on the Subject
71. We may now look into few old 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)
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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) which deals
with ex parte orders for stay of execution pending the
hearing of the application. The power of the Court to stay
execution of a decree has to be exercised within the four
corners of the above Rule. The intention of the Legislature
which appears from the language of this rule seems to
be that an appeal should not automatically operate as a
stay of execution of the decree and no order for stay of
execution should be made merely by reason only that an
appeal has been preferred from the decree.
7. The reason of the rule appears to be that the rights of
the decree-holder having been determined by a competent
Court, it is not fair that he should be deprived of the fruits
of his decree merely because the judgment-debtor prefers
an appeal against the decree. At the same time if execution
of the decree is likely to result in substantial loss to the
decree-holder, discretion is given to the Court to stay
execution provided the other two conditions of sub-r. (3)
are satisfied. It is, therefore, impossible to formulate any
uniform rule of practice and each case must be decided
on its own facts.
8. In the case of money decrees, a Bench of the Bombay
High Court decided in Dhunjibhoy Cowasji Umrigar v.
Lisboa, 13 Bom 241 (A) that where a decree orders payment
of money and an appeal is lodged against that decree by
the party directed to pay, then on his application execution
of the decree should be stayed, so far as it directs payment,
on the judgment-debtor lodging the amount in Court, unless
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the other party gives security for the repayment of money
in the event of the decree being reversed.
9. If such security is given by the successful party, then
stay of execution should not be granted. This order was
made in 1888 under the Code of Civil Procedure of 1882.
That Code did not have any provision similar to O. 41 R.
5 of the CPC and the order must be taken to have been
passed in the exercise of the inherent power of the Court.
10. But after the enactment of O. 41 R. 5 in the Code of
1908 the discretion of the Court is very much limited and
has to be exercised within the limits prescribed by the
rule, and in a proper case where substantial loss is likely
to result to the judgment-debtor if a decree for payment
of money is executed, the Court can stay execution of
the decree even before the judgment-debtor deposits the
amount 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).
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75. In the case of Dhunjibhoy (supra), the Bombay High Court had
observed that no stay of execution of money decree should be
granted without asking the judgment debtor to deposit the decretal
amount. In Dhunjibhoy (supra) the Bombay High Court held that:
“A party appealing against a decree, which directs him to
pay money, may obtain stay of execution of-decree, so far
as it directs payment, on his lodging the amount in court,
unless the other party gives security for the repayment of
the money in the event of the decree being reversed. If
such security be given by the successful party, then stay
of execution should not be granted.”
76. The case of Dhunjibhoy (supra) was decided by the Bombay High
Court on August 31, 1888, under the provisions of the Civil Procedure
Code, 1882. In that Code, there was no provision similar to Order
41 Rule 5 of the CPC. Therefore, the order must be taken to have
been passed by the court in exercise of its inherent powers. On
the other hand, the facts and circumstances of the present case
are governed by the provisions of the CPC, wherein there is an
express provision regarding grant or refusal of stay of execution of
decree. Hence, it is not permissible to the court to have recourse
to the inherent powers of the court. This distinction makes a world
of difference between the two situations.
77. It may also be noted that in Dhunjibhoy (supra), the suit was for
injunction restraining the defendant from erecting a building which will
interfere with the free access of light and air through certain windows
in the plaintiff’s house. The plaintiff had obtained a decree in respect
of the windows and had also obtained a decree for compensation
by way of damages for the injury done to the windows. The decree
also directed the defendant to pay the plaintiff’s costs of the suit.
The defendant had filed an appeal and a question arose regarding
the execution of the decree so far as it related to costs. It is in this
context, i.e., where the prayer was for recovery of the amount of
costs awarded by the trial court, the aforesaid observations were
made by the Bombay High Court.
78. Thus, it cannot be said as a principle of universal rule that in all cases
of money decree, the defendant should be directed to deposit the
amount in court and then only the question of stay be considered.
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79. The decisions of the High Court of Mysore in A.A. Khan (supra) and
Movie Enterprises (supra) have been followed by the Rajasthan
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, the term “sufficient cause” occurring in Order XLI Rule 5 of
the CPC has got to be interpreted and understood in the light of the
aforesaid discussion. After all, what is “sufficient”? One may again
turn to Black’s Law Dictionary. “Sufficient” means “adequate-enough”
as much as may be necessary-equal or fit for end proposed-and that
which may be necessary to accomplish an object.

iv. Meaning and Import of “sufficient cause” under Order XLI
Rule 5 of the CPC
82. Having regard to the case law discussed above and for reasons to be
recorded, we are inclined or rather persuaded to take the view that
the benefit of stay of execution of a money decree may be granted
by the Appellate Court unconditionally, if it:
i. is egregiously perverse;
ii. is riddled with patent illegalities;
iii. is facially untenable; and/or
iv. such other exceptional causes similar in nature.
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83. The aforesaid factors would bring the case within the purview of
“exceptional case” for the purpose of granting benefit of unconditional
stay of the execution of money decree.
84. We are at one with the submission canvassed on behalf of the
defendant that in contradistinction to Order XLI, the word “deposit”
does not figure in Rule 1(3), Rule 5(5) and Rule 5(3) respectively.
85. Under Rule 5(3) sub-clause (c) – security has to be furnished for “due
performance” of the decree. We find it difficult to read any mandate
for direction to deposit the decretal amount.
86. As noted above, the provision under Order XLI Rule 5(3) of the
CPC provides for satisfaction regarding sufficient cause as a pre-
condition for granting benefit of stay of execution of decree. It casts
an obligation upon the court to record its satisfaction for stay of
execution such decree. Therefore, security can be in the shape of
property, bond, or by undertaking from the appellant to abide by the
decree, seeking stay of execution.
87. However, there is no provision under Order XLI Rule 5 of the CPC
imposing a mandate to deposit cash security as the only mode of
security for execution of the decree.

v. Service of Summons and Irregularity in the Service of
Summons
88. At this stage, we must deal with one submission canvassed on behalf
of the petitioners that in view of the second Proviso to Order IX Rule
13 of the CPC, the defendant could be said to have had the requisite
“knowledge” 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).
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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 Kumar
Sabharwal v. Gurpreet Singh & Ors., reported in (2002) 5 SCC 377.
91. In the aforesaid context, the reliance placed on behalf the petitioners,
on the decision in Sunil Poddar (supra) is of no avail. The undisputed
facts in the said case were that the parties had already filed their
pleadings before the civil court much prior to the case being transferred
to the DRT. The parties were also aware of the transfer of the suit to
the DRT. Despite such knowledge the party concerned consciously
avoided service of summons in those proceedings. The decision in
Sunil Poddar (supra) is distinguishable on the facts.
92. In the case on hand, the Division Bench in its impugned judgment
has prima facie noted that there was nothing to indicate whether:
(a) the plaintiffs had actually served all the documents with their
notices under Order XXXIX Rule 3 and;
(b) the defendant was actually made aware with sufficient time of
the claim as regards the next date of hearing in the proceedings.
93. In the same manner the decision of the Delhi High Court in LT Food
(supra) is also of no avail as the same is distinguishable on the facts.
94. We now proceed to deal with the submission canvassed by Mr.
Gaurav Pachnanda, the learned Senior Counsel in rejoinder as noted
by us in paras 35 and 36 respectively of our judgment.

vi. Reading of Section 36 of the Arbitration Act and Order XLI
Rule 3 and Rule 5 respectively of the CPC
95. At this stage, we need to clarify something important. At the outset,
we must state that this litigation has nothing to do with Section 36 of
the Arbitration Act. In the present litigation, we are only concerned with
Order XLI Rule 3 and 5 respectively, of the CPC. We are referring
to Section 36 of the Arbitration Act only for the limited purpose of
answering the specific contention raised by Mr. Gaurav Pachnanda.
In other words, whether the learned counsel is right in extending the
analogy of Section 36 of the Arbitration Act to the present case or
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rather to the provisions of Order XLI Rule 3 and 5 of the CPC, is
inappropriate. For this limited purpose only, we have thought fit to
look into the two decisions of this Court one in the case of Sepco
Electric Power Construction v. Power Mech Projects Limited,
reported in 2022 SCC OnLine SC 1243, and the other, in the case
of Pam Developments Private Limited v. State of West Bengal,
reported in (2019) 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 to the provisions for grant of stay
of a money decree under the provisions of the
Code of Civil Procedure, 1908 (5 of 1908).]
Provided further that where the Court is satisfied
that a Prima facie case is made out that,—
(a) the arbitration agreement or contract which
is the basis of the award; or
(b) the making of the award,
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was induced or effected by fraud or corruption,
it shall stay the award unconditionally pending
disposal of the challenge under section 34 to
the award.
Explanation.—For the removal of doubts, it is hereby
clarified that the above proviso shall apply to all court
cases arising out of or in relation to arbitral proceedings,
irrespective of whether the arbitral or court proceedings
were commenced prior to or after the commencement of
the Arbitration and Conciliation (Amendment) Act, 2015
(3 of 2016)”
(Emphasis supplied)

97. Section 36 of the Arbitration Act was substituted vide the Arbitration
and Conciliation (Amendment) Act 2015 (for short, “the Amendment
Act, 2015”). Prior to the 2015 Amendment, the mere filing of an
application challenging arbitral award under Section 34 of the
Arbitration Act was understood in many quarters as a stay of the
award in terms of the unamended Section 36 of the Arbitration Act.
98. This “automatic stay” became a subject matter of legal debate as
being a great obstacle to the ease of enforcement of arbitral awards.
In such circumstances, and with a view to address this lacuna, the
Amendment Act, 2015, was introduced in the Arbitration Act. Under
the Amendment Act, 2015, the existing provision in Section 36 was
wholly substituted. Sub-section (2) of the amended provision provided
that the filing of an application to set aside the arbitral award did
not by itself render the award unenforceable unless an order was
passed by “granting a stay on the operation of the award pursuant to
a separate application filed to that effect”. Therefore, Section 36(2) of
the Arbitration Act contemplated a separate application seeking stay.
99. In Hindustan Construction Company & Anr. v. Union of India
& Ors., reported in (2020) 17 SCC 324, this Court held that there
would be no automatic stay on the enforcement of an arbitral award
under Section 36 of the Arbitration Act due to the mere fact that an
application to set aside the award under Section 34 had been field
before a 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
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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 SCC 287, was the position of law, prevailing at
that time and would be used to interpret the applicability of
the Amendment Act, 2015, to the arbitral proceedings and
proceedings in relation to them.
100. Section 36(3) of the Arbitration Act provides that upon such an
application being filed, the court may grant a stay “subject to such
conditions as it may deem fit” for reasons to be recorded in writing.
In terms of Section 36(3) of the Arbitration Act, the Court is conferred
with the discretionary power to grant a stay of an arbitral award.
Such discretionary power flows from the usage of the words “may”
for grant of stay and the employment of the phrase “such conditions
as it may deem fit” for the conditions that may be imposed if a stay
was granted. Therefore, in terms of Section 36(3), the court retains
its discretionary power to grant a stay of an arbitral award.
101. Further, the first Proviso to Section 36(3) provides that if the arbitral
award was for payment of money, the court shall have “due regard”
to the provisions for grant of stay of money decree under the CPC.
102. The aforesaid was, the legal position for a period of six years from
2016 to 2021. In 2021, Section 36 of the Arbitration Act was once
again amended with retrospective effect from 23.10.2015, vide the
Arbitration and Conciliation Amendment Act, 2021 (for short, “the
506 [2025] 10 S.C.R.

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2021 Amendment”). The 2021 Amendment, inter alia, introduced
a second Proviso to Section 36(3) which provided that if a prima
facie case is made out that either the arbitration agreement/contract
which is the basis of the award, or the making of the award was
induced or effect by fraud or corruption, the Court “shall” stay the
award “unconditionally” pending the disposal of the challenge.
103. As is clear from a plain reading of the second Proviso referred to
above, it was provided that if, inter alia, the making of the award
was induced or effected by fraud or corruption then the court was
mandated to stay the award and such a stay was to be unconditional.
104. Mr. Gaurav Pachnanda, the learned Senior Counsel would argue
that the courts cannot grant the benefit of unconditional stay of an
award in cases other than those covered by the second Proviso to
Section 36(3) of the Arbitration Act. In the same manner, according
to the learned Senior Counsel, when it comes to staying a money
decree unconditionally, the 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 judgement are extracted below:
“The power under subsection (3) of Section 36 to grant
stay of an award is coupled with the duty to impose
conditions which could include the condition of securing
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the award by deposit in Court, of the amount of the
Award. It may be true as argued by Mr. Vishwanathan
that the Court may not impose condition for stay, if it
deems appropriate not to do so. The power of Court to
grant unconditional stay of an Award is not unfettered.
The power of unconditional stay is subject to the condition
in the second proviso that is:
The Court is satisfied that a prima facie case (sic) is
made out that
(i) the arbitration agreement or contract which is the
basis of the award; or
(ii) the making of the award, was induced or effected by
fraud or corruption”
(Emphasis supplied)

107. While this Court acknowledged that an unconditional stay could
be granted in appropriate cases, it quickly followed up saying
that the power to grant an unconditional stay is governed by the
second Proviso to Section 36(3). This may indicate that the Court
acknowledged the grant of an unconditional stay to the existence of
the grounds mentioned in the second Proviso. This would indicate
that the benefit of unconditional stay could be granted only in cases
of fraud or corruption.
108. Notwithstanding the above, this Court in order to fortify its conclusion
in the case, subsequently also noted that the appellant therein
was not able to show any cogent and glaring error that went to
the root of the award. This observation was repeated later where
the Court stated that no cogent ground had been made out even,
prima facie, for interference with the impugned award. The relevant
observations are extracted below:
“26. It is settled law that grounds for interference with an
award is restricted. Even before this court, the Appellant
has not been able to advert to any cogent and glaring
error which goes to the root of the award. The contention
of the award being opposed to the public policy of India,
is devoid of any particulars whatsoever…

xxx xxx xxx
508 [2025] 10 S.C.R.

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35. It is not in dispute that there is an award of Rs. 142
Crores in favour of the Respondent. No cogent ground
has been made out even prima facie, for interference
with the impugned award.

xxx xxx xxx
37. We find no ground at all to 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).
112. The above reading of Sepco Electric (supra) would also be in tune
with the discretionary power of the court under the main part of
Section 36(3) both with respect to the power to grant stay and the
power to impose conditions if a stay is granted. After all, it is not
inconceivable to contend that a power to impose conditions would
also include the power not to impose conditions.
113. Be that as it may, Sepco Electric (supra) does not clearly answer
the question whether an unconditional stay can be granted in cases
not covered by the second Proviso to Section 36(3). This confusion
remains because while the Court states an unconditional stay can
be granted in cases covered by the second Proviso, it does not
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categorically exclude the possibility of an unconditional stay in
cases not covered by the second proviso.
114. This Court in Pam Developments (supra) had occasion to
consider the nature of applicability of provisions of the CPC vis-
à-vis the proceedings under the Arbitration Act, and specifically,
the interpretation of the phrase “due regard” appearing in the first
Proviso. The respondent therein had preferred an application seeking
an unconditional stay of the arbitral award on the strength of Order
XXVII Rule 8A, CPC which inter alia exempted Government from
furnishing a security while seeking stay of a decree. Aggrieved
by the application being allowed by the Calcutta High Court, the
appellant-award holder approached this Court.
115. This Court allowed the appeal and directed deposit of the award
amount as a condition for continuing the stay. The Court reasoned
that the exemption from furnishing security under Order XXVII Rule
8A that would otherwise be applicable to the ordinary civil proceed-
ings could not be strictly applied to the arbitration proceedings.
Therefore, the respondent-government could not have relied upon
that provision to avoid furnishing security for staying the award. The
Court further held that even if the exemption from furnishing security
was made applicable to the arbitration proceedings, such exemption
would not extend to making deposit of the award amounts. This
was based on the Court’s interpretation of the difference between
Order XXVII Rule 8A which was introduced in 1937 and exempted
furnishing of ‘security’ and sub-rule (5) of Rule 5 of Order XLI that
was introduced in 1976 and which differentiated between ‘security’
and ‘deposit’. The Court also referred to the implications of a provi-
sion introduced during the colonial period and its continuance in
the present constitutional set-up.
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
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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 provi-
sions of CPC are to be followed as guidance, whereas
the provisions of the Arbitration Act are essentially to be
first applied. Since, the Arbitration Act is a self-contained
Act, the provisions of CPC will apply only insofar as the
same are not inconsistent with the spirit and provisions
of the Arbitration Act.”
(Emphasis supplied)

117. On the strength of the above reasoning, this Court held that the
exemption from furnishing security could not be applied to the
arbitration proceedings. The Court clarified that while courts must
have due regard to the CPC, they are not rigidly bound by its
provisions. The CPC serves as a guiding framework rather than a
strict mandate because the Arbitration Act being a self-contained
Act is to be first applied by the court.
118. Although not explicitly stated by the Court as a reason for its decision,
yet this Court did note the consequence of accepting the contention
that Order XXVII Rule 8A was applicable. The result would be that
wherever the government was the judgment-debtor in the arbitration
proceedings, it would be entitled to an unconditional stay on the
mere filing of an application under Section 36(2).
119. While Pam Developments (supra) relied on the phrase “due
regard” appearing in the first Proviso to decline the rigid application
of an exemption from furnishing security provided under the CPC
it could also be argued that insisting on a conditional stay in all
cases of a money award would be a rigid application of Order
XLI Rule 5. This is because Rule 5 mandates the furnishing of
security or deposit as a condition for granting stay. Relying on
Pam Developments (supra), it could possibly be argued that “due
regard” to the provisions of CPC, especially Order XLI Rule 5,
would not mean a mandatory grant of conditional stay in all cases.
This is because the provisions of the Act, especially Section 36,
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would have to be first applied wherein a discretionary power is
vested in the court.
120. If the first Proviso has to be interpreted as done in Pam
Developments (supra) and merits of the award have to be
considered on a prima facie level as done in Sepco Electric (supra),
it is difficult to rule out the existence of an unconditional stay in
cases outside the second Proviso. A closer analysis of the decision
in Sepco Electric (supra) and this Court’s interpretation of the first
proviso in Pam Developments (supra) suggests that unconditional
stays can be granted even in cases outside the second Proviso.
121. At this stage, we must look into one 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
Order 41 Rule 5(3) are (a) whether the Applicant will be
put to a substantial loss if stay is refused; (b) whether
there is a delay in making the application and (c) whether
the Applicant has furnish sufficient security to satisfy any
ultimate decree. There is a delay, though slight. I do not
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see how the question of substantial loss arises. The fact
that it has suffered an Award is neither here or there. The
third requirement is that the party applying for stay must
show sufficient security. There is no such attempt made.”
(Emphasis supplied)

122. In such circumstances referred to above, we find it difficult to
subscribe to the submission of Mr. Gaurav Pachnanda, that even
for the purpose of grant of benefit of unconditional stay of money
decree under Order XLI Rule 5 of the CPC, the judgment-debtor
has to make out more than a prima facie case of fraud or corruption
and not solely on the basis of an extreme or egregious view on the
merits of the adjudication.
123. We once again clarify that the analogy of Section 36 of the Arbitration
Act sought to be applied is inappropriate. The decision of this Court
in Pam Developments (supra) should also be understood and
confined only to matters relating to arbitration, more particularly,
Section 36 of the Arbitration Act.
124. We are of the view that if fraud or corruption or something analogous
to the same is only to be seen for the purpose of granting benefit
of unconditional stay of execution of money decree then in such
circumstances, the decree holder may argue that although there
may not be a valid service of summons to the defendant/judgment-
debtor yet, the same by itself would not be sufficient to grant the
benefit of unconditional stay of execution of money decree. This
would lead to nothing but serious miscarriage of justice.

vi. Relevant aspects which the High Court looked into for the
purpose of granting unconditional stay
125. The first thing that the Division Bench of the High Court looked into
was that the suit had proceeded in the absence of the respondent
herein. In the aforesaid context, the findings recorded by the Division
Bench may be looked into:
“168. We also find prima facie substance in the contentions
of Mr. Nigam and Mr. Kaul that the manner in which, after
excluding all defendants from the proceedings, the entire
trial of the suit, arguments and rendition of judgment took
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Lifestyle Equities C.V. & Anr. v. Amazon Technologies INC.

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, no summons in the suit were ever served
on Amazon Tech. This, to our mind, is a serious infirmity,
which may plague all other proceedings. Amazon Tech
was proceeded ex parte, by the learned Single Judge, on
20 April 2022. In the order passed by the learned Joint
Registrar on 7 July 2021, which was the immediately
preceding effective date, it was specifically noted that
there was no report regarding service of the suit on
Amazon Tech. In the circumstances, Lifestyle was directed
to file an affidavit of service. No affidavit of service was
filed by Lifestyle, between 7 July 2021 and 20 April 2022.
The only affidavit of service which was filed by Lifestyle
was of 25 March 2021. That affidavit enclosed, by it,
an email dated 8 March 2021. No email, after 8 March
2021, was sent by Lifestyle to Amazon Tech. There is
no question of the summons having been served by the
email dated 8 March 2021, as the delay in filing process
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fee was condoned only on 16 April 2021. After 16 April
2021, the summons have never been sent to Amazon
Tech, by any means of communication including email.
It was for this reason that the order dated 7 July 2021
of the learned Joint Registrar required Lifestyle to file
an affidavit of service. This was never done. As such, it
is apparent that the learned Single Judge was in error
in proceeding ex parte against Amazon Tech by order
dated 20 April 2022.
171. In fact, even before us, Mr. Pachnanda, with
characteristic candour and forthrightness, did not seek
to contend that formal service of summons on Amazon
Tech, as directed by the Court while issuing summons
on 12 October 2020, ever took place. His submission is,
however, that, prior to issuance of summons by the Court
on 12 October 2020, as well as by way of attachment to
the email dated 8 March 2021, all the documents relating
to the suit, as well as applications filed therewith, were
forwarded to Amazon Tech. Besides, due compliance with
the requirements of the proviso to Order XXXIX Rule 13
of the CPC was also ensured. In these circumstances,
Mr. Pachnanda’s submission is that the learned Single
Judge was correct in holding that Amazon Tech deliberately
absented itself from the proceedings and cannot, now,
therefore, seek to raise a grievance that it was proceeded
ex parte.
172. We cannot, in law, accept the submission.
173. The law does not require a defendant to 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
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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 serious enough to vitiate
all proceedings in the suit after 20 April 2022, at least
insofar as the appellant Amazon Tech is concerned. It also,
therefore, suffices, even by itself and independent of all
other considerations, as enough to justify entertainment
of the present appeal without requiring any deposit of the
decretal amount to be made by Amazon Tech.
175. We also find considerable substance in the
submission of learned Senior Counsel for the appellant
Amazon Tech that, in any event, all these developments
took place at a time when the damage claimed by Lifestyle
were only to the tune of ₹ 2,00,05,000/-. Enhancement of
these damages are necessarily to be proceeded by an
amendment of the plaint, of which Amazon Tech had to
be put on due notice. This was never done. In fact, the
written submissions filed by Lifestyle, which enhanced
the damages, earlier computed at ₹ 20,005,000/– to
₹ 3780 crores, were also not served on the Appellant
Amazon Tech. In accepting the enhancement of the
claim for damages, therefore, we agree with learned
Senior Counsel for the appellant Amazon Tech that the
learned Single Judge has not acted strictly in accordance
with the law.
176. In some circumstances, we are also of the opinion
that lifestyle cannot seek sanctuary behind Order VII
Rule 2 or Order VII rule 7 of the CPC, or even Rule 120
of the IPD Rules. Order VII Rule 2, in fact requires a
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plaint, seeking recovery of money, to state the precise
claimed amount. The proviso to Order VII Rule 2 applies
only in cases of suits for mesne profits, or for an amount
which would be found on rendition of accounts between
the Plaintiff and the Defendant, or for movables in the
possession of the defendant or debts of which the value
cannot be reasonably estimated at that stage. The present
suit does not fall within any of these categories. The suit
does not claim mesne profits, or value of movables in the
possession of the defendants, or any debt of which the
value was not ascertainable. Moreover, para 86 of the
impugned judgment records the submission of Lifestyle
that it was not pressing for its prayer for rendition of
accounts. In that view of the matter, the proviso to Order
VII Rule 2 of the CPC would not apply, and the main
provision, which requires the precise claim to be quantified
in the suit, would apply with all force. The precise amount
quantified in the suit was only ₹ 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 ₹ 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 ₹ 2,00,05,000/–, could be inflated to
₹ 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 ₹ 336 crores, without any prior opportunity
to the concerned defendant to contest the proposed
judgment.”
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126. The second relevant aspect that the Division Bench looked into
was the fact that there were no pleadings of infringement against
the respondent herein worth the name. In this regard, the following
observations are relevant:
“156. Mr. Sai Deepak, appearing on behalf of Lifestyle
and supplementing the submissions advanced by
Mr. Pachnanda, sought earnestly to convince us that
the requisite factual basis or alleging involvement of
Amazon Tech in the infringement of Lifestyle’s registered
trademark, is forthcoming in the plaint. We are unable
to agree.
157. We have already set out, from para 29 of the present
judgment on words, the relevant averments contained
in the plaint. We do not find, therein, any prima facie
sustainable allegation of involvement, by Amazon Tech,
in any infringement of Lifestyle’s registered trademark.
158. Para 41 of the plaint alleges that Amazon Tech is,
under its brand ‘SYMBOL’, “manufacturing, offering for
sale and/or selling products which bear the infringing
logo mark. These allegations are completely defeated
by the assertions in the replication filed by Lifestyle,
to the written statement of Cloudtail – also reproduced
supra – that it was Cloudtail manufacturing and selling
the apparel bearing the mark, and, thereby, infringing
Lifestyle’s registered trademark.
159. Para 41 goes on to state that ASSPL was selling
products of Amazon Tech on its platform under the
trademark ‘SYMBOL’, bearing the infringing mark. This
allegation, again, is incorrect. The products sold by
ASSPL were not of Amazon Tech, but of Cloudtail. The
only connection of Amazon Tech, with the said products,
was the ‘SYMBOL’ mark, which Cloudtail affixed on the
said apparel under license from Amazon Tech. This
does not, in any way, connect Amazon Tech with the
infringing mark.
160. In fact, after making such bald and unsubstantiated
allegations, Lifestyle, in the same para 41 of the plaint,
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acknowledges that it was not certain about the actual
relation between Amazon Tech, Cloudtail and ASSPL.
Obviously, the allegations against Amazon Tech,
regarding its complicity in the affixation of the mark on
the apparel sold by Cloudtail on the ASSPL platform,
were merely shots in the dark, without any knowledge
of the actual state of affairs. In fact, para 46 of the plaint
acknowledges the fact that the invoice, raised by ASSPL,
with respect to the apparel purchased by Lifestyle, only
contained the name and details of Cloudtail. 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 activities of Cloudtail. There is, in fact, none.
162. Apart from this, the plaint only refers, repeatedly,
to the infringing mark as belonging to Amazon Tech and
has having been adopted by it. No factual basis for these
allegations is forthcoming.
163. We have already explained, in para 18 to 26 supra,
why it cannot be said that any substantial allegation of
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involvement, by Amazon Tech, in the allegedly infringing
activities of Cloudtail, by affixation of the mark on the
apparel sold by it, can be said to exist.
164. This, therefore, is not merely a case in which
damages have been awarded against Amazon Tech
without any finding, by the learned Single Judge, of
involvement, in the alleged infringing activities, but is, in
fact, a case where no such pleadings exist.”
127. The third aspect which the Division Bench looked into was one relating
to no pleadings for the purpose of claiming Rs. 3,36,02,87,000/-
towards damages. In this regard, the findings recorded are:
“136. Leave alone the fact that there were no pleadings,
claiming ₹ 336,02,87,000/-, there were also no pleadings
on the basis of which is claim could be supported or
sustained. The learned Single Judge has herself ventured
into an exercise of computing the awardable damages
as ₹ 336,02,87,000/-, without the said exercise being
supported by any pleadings of Lifestyle. The position
that has resulted is, therefore, that
(i) the pleadings of Lifestyle only justified damages of ₹
2,00,05,000/–,
(ii) without amending its pleadings, Lifestyle, in its written
submissions before the learned Single Judge, worked
out the damages to which it was allegedly entitled as
approximately ₹ 3780 crores, and
(iii) the impugned judgment decrees in favour of Lifestyle
and against Amazon Tech, ₹ 336,02,87,000/-, again on
the basis of a computation solely devised by the learned
Single Judge, not pleaded by the parties and unsupported
by any pleading on record.
137. Mr. Pachnanda sought to submit that the damages
to which the Plaintiff is entitled need not be specifically
computed and claimed in the pleadings. The submission,
in our view, begs the issue. This is not merely a case
where there are no pleadings, supporting the damages
of ₹ 3780 crores, claimed by Lifestyle in its written
submissions, or the damages of ₹ 336,02,87,000/-which
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ultimately came to be awarded by the learned Single
Judge. Even the basis for the claim of ₹ 3780 crores, all
for the amount of ₹ 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 intermediary. We may
note, even at this juncture, that the learned Single Judge
has, in para 99 of the impugned judgment, observed that
Amazon Tech was identifying itself as an intermediary.
This is a prima facie erroneous finding. At no point of
time has Amazon Tech claimed to be an intermediary.
In fact, in earlier orders passed in the suit, particularly
in the orders dated 2 March 2023 and 7 August 2023 –
which the latter was passed by the learned Single Judge
herself – it has been correctly noted that Defendant 3
ASSPL was claiming to be an intermediary and was,
in fact, one. In the impugned judgment, therefore, the
learned Single Judge has proceeded on an apparently
mistaken assumption that Amazon Tech was also claiming
to be an intermediary.
143. Returning to the findings in the impugned judgment,
following the adverse observations regarding the
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menace of e-infringement is a new species of trademark
infringement, which poses significant challenges in
localising of liability, the learned Single Judge proceeds,
in para 45, to characterise the present case as a case
of e-infringement – with which there can be no serious
cavil. Following this, however, the learned Single Judge
was on to note that the brand ‘Symbol’, being used by
Cloudtail, was owned by Amazon Tech. This is also;
however, is difficult to understand how the ownership, by
Amazon Tech, of the brand ‘Symbol’ is of any relevance.
The mark ‘Symbol’ is, quite clearly, not infringing in nature.
144. In fact, even the plaint in the suit does not so assert.
The case that Lifestyle has sought to build up, in the
plaint, is that, as the infringing mark figured on the same
apparel, which bore the ‘SYMBOL’ mark of Amazon Tech,
Amazon Tech could not escape liability from the tort of
infringement by use of the mark. In our considered view,
the said plea, which has apparently found favour with
the learned Single Judge in the impugned judgment,
has no basis in law.
145. The learned Single Judge proceeds to lay
considerable stress on order dated 5 September 2022,
passed in the suit, particularly on the opening sentence
of the order, which reads:
“The learned senior counsel for the defendant
no. 2/applicant herein submits that the said
defendant, including for and on behalf of the
defendant no. 1 is willing to suffer a decree
of injunction and also for paying reasonable
damages to the plaintiff.”
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
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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 ₹ 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 ₹ 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 with each other”. Para 48 records that “it
is a matter of public knowledge that the www.amazon.
in platform is closely linked with Defendant No. 1”, i.e.
the present appellant Amazon Tech. To a large extent,
it is clear that the impugned judgement proceeds on the
premise that Amazon Tech, Cloudtail and ASSPL, i.e.,
all the defendants, were acting in concert and were one
commercial entity.
147. We also find, prima facie, that the learned Single
Judge has, in para 52 of the impugned judgment,
completely misread the Licensing Agreement dated 23
December 2015 as fastening liability on Amazon Tech
for infringement whereas, in fact, it does nothing of
the kind. The learned Single Judge observes that the
License Agreement dated 23 December 2015, between
Amazon Tech and Cloudtail indicated “that Amazon retains
significant control over Cloudtail’s branding and distribution
activities”. Following this, the learned Single Judge returns
an opinion that “the clauses in the Agreement clearly
diminish Amazon’s liability to distance itself from the
alleged infringement committed by Cloudtail”, that “the
contractual restrictions on unauthorised trademark use,
coupled with indemnification obligations, provide strong
legal grounds for (Lifestyle) to argue Amazon’s direct
involvement in trademark infringement”, “the agreement
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being a license agreement, Defendant No. 1 being
a licensor an Defendant No. 2 being a licensee, any
infringement or unlawful use by the licensee would also
affix liability about the licensor”, “while licensing the word
mark SYMBOL” Amazon would be unable to distance
itself from the use of the accompanying horse logo device
mark” and that “thus, the consequences of infringement
squarely fall upon Defendant No. 1”.
148. We are, prima facie, unaware of any law which
supports these observations and findings. The Licensing
Agreement dated 23 December 2015 was restricted to
the ‘SYMBOL’ mark, owned by Amazon Tech. Amazon
Tech had, by the agreement, licensed, to Cloudtail,
the right to use the mark ‘SYMBOL’. The agreement
does nothing beyond this. By no stretch of imagination
could be Licensing Agreement be read as authorising
Cloudtail to affix, on the apparel sold by it, the allegedly
infringing mark. In fact, the Licensing Agreement makes
no reference to the said mark at all, obviously because
Amazon Tech had no concern with the said mark. If,
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
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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 52 of the impugned
judgment, in our prima facie view, are contrary to this
principle which, according to us, is practically fossilized
in the law. They, therefore, suffer from patent illegality.
151. In para 98, the learned Single Judge observes that
the judgment would proceed to examine, inter alia, “the
degree of culpability of the Defendants”. Paras 98 to
99 proceed, apparently, to record certain observations
regarding Amazon Tech which, in our view, are not
incriminating in any manner. Before, however, adverting
thereto, the learned Single Judge observes, in para 98 and
in the opening part of para 99 of the impugned judgment,
that the mark ‘SYMBOL’, of which the right to use had
been licensed by Amazon Tech to Cloudtail, was used
“along with” the infringing mark, on the apparel sold by
Cloudtail. Even if it was, we are unable to understand
how any liability or responsibility for infringement, on the
ground, be fastened on Amazon Tech. Amazon Tech was
not the manufacturer of the apparel on which the infringing
mark was used. It had never licensed, to Cloudtail, the
right to use the infringing mark, with which, in fact, it
had no concern. In fact, Cloudtail itself conceded, before
this Court on 2 March 2023, that the decision to use the
infringing mark on the apparel sold by was not of Amazon,
but of Cloudtail itself. Unfortunately, the learned Single
Judge has entirely overlooked this concession, regarding
which no objection or reservation was ever expressed by
Lifestyle, either before this Court on 2 March 2023 or at
any point thereafter. In view thereof, it is plainly obvious
that the affixation, on the apparel sold by Cloudtail, of
the infringing logo, could not incriminate Amazon Tech
in any manner, merely because the same apparel also
happened to carry the ‘SYMBOL’ mark, the use of which
had been licensed by Amazon Tech to Cloudtail.
152. Para 99 of the impugned judgment proceeds to
observe that Amazon Tech was “one of the most dominant
players in the ecommerce space”, that it “possesses
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ways and means to utilise its dominant presence in the
e-commerce space to promote its own products as also
products which it might otherwise wish to promote”, and
that it had “the leverage through its own platforms to dilute
Plaintiff’s brand/logo by indulging in deep-discounting of its
own products which compete with the Plaintiff by using a
similar 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 observe that the learned
Single Judge has, in so holding, made out a case in
favour of Lifestyle which it itself did not plead.
154. There are no other findings, in the impugned
judgment, against Amazon Tech. Of course, the learned
Single Judge has adversely commented on what she
perceives as Amazon Tech’s deliberate absence from the
proceedings in the suit. Even if it were to be presumed,
merely for the sake of argument, that Amazon Tech
took a conscious decision not to participate in the suit
proceedings, that cannot justify mulcting it with damages
of ₹ 336,02,87,000/-.
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155. The case, therefore, is one of awarding, against
Amazon Tech and in favour of Lifestyle, of damages
of ₹ 336,02,87,000/-, without any sustainable finding of
infringement, or of complicity in infringement, against
Amazon Tech.”
129. If the Division Bench after looking into all the relevant aspects
referred to above thought fit to grant benefit of unconditional stay
of execution of money decree then, applying the principles of law
discussed by us, it cannot be said that the Division Bench committed
any error much less an error of law in passing the impugned
judgment and order.
130. It goes without saying that whatever has been observed by the
Division Bench in its impugned judgment and order is not an
expression of any final opinion but are prima face observations for
the purpose of granting the relief as prayed for by the respondents.
131. It is necessary for us to observe that the Court’s jurisdiction over
a respondent is founded on a valid service of summons. Without
a valid service, the Court cannot acquire jurisdiction over the
respondent, unless the defendant voluntarily submits to it. The
original defendant-respondent must be properly be apprised of
a pending action against him and assured of the opportunity to
present his defenses to the suit. Proper service of summons is
used to protect one’s right to due process.
132. In an action strictly in personam, personal service on the defendant
is the preferred mode of service, i.e., by handing a copy of the
summons to the defendant in person. If defendant, for excusable
reasons, cannot be served with the summons within a reasonable
period, then substituted service can be resorted to. While substituted
service of summons is permitted, “it is extraordinary in character
and in derogation of the usual method 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.
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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 Court which is dated
12/10/2020. Let the order be complied with, and process
be Issued, returnable for the next date.
5. Re-notify the matter for completion of service,
completion of pleadings and admission/denial of the
documents on 22”’’ April, 2021.”
(Emphasis supplied)

F. CONCLUSION
134. We summarize our final conclusion on the grant of benefit of stay
of execution of a decree by an appellate court in term of Order
XLI as under: -
(I) Order XLI Rule 5 contains the provision for the grant or refusal
of stay of execution of the decree by the appellate court
under the CPC. It categorically stipulates that mere filing of
an appeal against an order of execution, shall not ipso facto
operate as stay of proceedings. Any execution proceeding or
an order therein, shall be stayed only if a specific, reasoned
order granting such stay is passed by the appellate court,
after proper application of mind.
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(II) For the grant of stay of execution of a decree in terms of
Order XLI, a prayer to such effect has to be specifically
made to the appellate court and the appellate court has the
discretion to grant an order of stay or to refuse the same.
(III) Order XLI Rule 5(3) of the CPC provides for satisfaction
regarding sufficient cause as a pre-condition for granting
benefit of stay of execution of decree, and it casts an obligation
upon the appellate court to record its satisfaction for stay of
execution such decree.
(IV) The power of the Appellate Court to order stay of execution of
the decree is circumscribed and made subject to the existence
of a “sufficient cause” in favour of the appellant being shown.
In order to ascertain whether a “sufficient cause” exists for
the grant of stay of execution of a decree under Order XLI
of the CPC, the appellate court as per sub-rule (3) of Rule
5 is required to examine:-
(i) Whether there will be substantial loss to the party
applying for stay;
(ii) Whether the application has been made without
unreasonable delay; and
(iii) Whether security has been given by the applicant for
due performance of the decree.
(V) For the grant of stay of execution of the decree, the appellate
court is required, after perusing the materials on record, to
assign reasons for its satisfaction regarding the existence
of a “sufficient cause”. Such reasons 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.
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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
order of stay.
(VIII) For the grant of benefit of an unconditional stay of execution
of a decree, an exceptional case has to be made out before
the appellate court. This discretion of the appellate court to
grant an unconditional stay of execution of decree must not
be exercised arbitrarily. It must be exercised sparingly and
only if an exceptional case is made out for such stay in view
of the peculiar facts and attending circumstances of the case
before it.
(IX) A lodestar for bringing a case within the purview of “exceptional
case” for the purpose of granting benefit of unconditional stay
of the execution of money decree by the appellate court
would be, if the money decree in question: -
(i) is egregiously perverse;
(ii) is riddled with patent illegalities;
(iii) is facially untenable; and/or
(iv) such other exceptional causes similar in nature.
(X) For the purpose of the grant or refusal of stay of execution of
the decree under Rule 5 of Order XLI, it is immaterial whether
the decree is a money decree or any other decree. The
language couched in the said provision is very clear. Order
XLI, Rule 5 of the makes no distinction between a money
decree and other decrees, and the said provision applies with
full rigour in both instances. Yet as a rule of prudence and
established practice evolved over a period of time, no stay
of execution of a money decree should be granted, except
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on the condition that the decretal amount be deposited in the
court. However, such condition for deposit cannot be said to
be mandatory and non-prescription thereof does not operate
as a bar to staying the execution of a money decree.
(XI) There is no provision under Order XLI Rule 5 of the CPC
imposing a mandate to deposit cash security as the only
mode of security for execution of the decree. Security, for the
purpose of the said provision, can be in the shape of property,
bond and or in the form of an appropriate undertaking from the
appellant to abide by the decree, seeking stay of execution.
135. In view of the aforesaid, we have reached the conclusion that we
should not disturb the impugned judgment and order passed by
the Division Bench of the High Court.
136. It is needless to clarify that the main appeal shall be decided on
its own merits and without being influenced in any manner by any
of the observations made in the impugned judgment and order
passed by the High Court including our judgment.
137. It shall be open for the parties to put forward all contentions available
to them in law at the time of the final hearing of the Regular First
Appeal.
138. Registry shall forward one copy each of this judgment to all the
High Courts.

Result of the case: Matter disposed of.

†
Headnotes prepared by: Divya Pandey