The Supreme Court on Tuesday (October 7) resolved the long-standing debate on whether deposit or security is an absolute precondition for staying a money decree. It clarified that it is not mandatory for the Appellate Court to impose a condition for deposit of the amount in dispute for grant of stay of execution under Order XLI Rule 5 of the Code of Civil Procedure, 1908 (“CPC”).

Affirming the Delhi High Court's division bench decision, the Court held that the provisions of Order XLI Rule 1(3) and Rule 5(5) of CPC, which require an appellant to deposit the decretal amount or furnish security, are directory, not mandatory. While non-compliance may normally lead to rejection of a stay application, appellate courts retain discretion to grant stay in “exceptional cases” even without such a de

See Full Page