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Movie Enterprises and anr. Vs. M.S. Periasamy Mudaliar and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberAppeal No. 97 of 1951-52
Judge
Reported inAIR1952Kant78; AIR1952Mys78
ActsCode of Civil Procedure (CPC), 1908 - Order 41, Rule 5
AppellantMovie Enterprises and anr.
RespondentM.S. Periasamy Mudaliar and ors.
Appellant AdvocateS.D. Ganesha Rao, Adv.
Respondent AdvocateS.K. Venkataranga Iyengar, Adv.
Excerpt:
.....if no order is made. 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. 4. it is next urged that the appellants have not disclosed the nature and details of 'substantial loss' that may result so as to enable the court to be satisfied whether such loss will be occasioned. the kind of loss must be specified, details must be given and the conscience of the court must be satisfied that such loss will really ensue. regarding the 'substantial loss',the averment in the affidavit is that 'substantial loss will result to me and to my family, the defendants in the suit and it further exposes to irreparable..........laid down in that case could be applied with reference to a case for stay of enforcement of a decree appealed against. the decision of this court in '9 mys. l. j.' does nowhere lay down in categorical terms that a decree directing payment of money should not be stayed unless the decree amount is lodged into court. order 41, rule 5, civil p. c. 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. the said pro-vision provides that no order of stay of execution shall be made, unless the court is satisfied that substantial loss' may result to the applicant if no order is made. it does not import any distinction between the decrees relating to payment of money.....
Judgment:

1. A question of some importance was raised by the respondents about the scope of Order 41, Rule 5, Civil P. C. in the matter of some decrees relating to payment of money pending disposal of the appeal.

2. An order 'ex parte' granting interim stay on terms of furnishing adequate security etc., was passed in favour of the appellants. The trial Court reported that the appellants have furnished satisfactory security for the due fulfilment of the ultimate decree that may be passed in the appeal. The respondents after notice contended that they were not afforded sufficient opportunity in the trial Court to demonstrate the nature and adequacy of the security furnished. The applications were, therefore, at the request of the respondents, referred back to the trial Court for a fresh finding about the nature of the security and the solvency of the sureties after allowing full opportunity to the parties. A further report has since been received stating that the security accepted earlier is satisfactory and sufficient.

3. When the proceedings were brought up for final orders, the respondents raised a further objection that the appellants are not entitled to the relief as they have failed to make out a 'prima facie' case to obtain stay of the decree under appeal. Their objections are twofold : It is first contended that the decree under appeal is for payment of money and that no stay could be granted unless the decree amount is lodged into Court in view of the decision of this Court in '9 Mys LJ 484', in which Doraswamy Iyer, C. J. has observed thus :

'Substantial loss, as I understand it, means and includes that even by obtaining restitution the appellant if he were to succeed in the appeal, will not be restored to the full benefits of the decree which may ultimately be passed in his favour, but not the mere temporary deprivation of the use or benefit he would have and if the decree-holder is not permitted to execute a decree which he has the right to execute, unless the Court has reason to believe that restitution wholly or partly cannot be had from the party seeking stay order. I think that generally the rule laid down in 'DHUNJIBHOY COWASJI UM-RIGAR v. LISBOA', 13 Bom 241, may with advantage, be followed in such cases. In 'DHUNJIBHOY COWASJI UMRIGAR v. LISBOA', the Court held, that where a decree orders payment of money, and an appeal is lodged against it that should be stayed so far as it directs payment on his lodging the amount in Court, unless the other party gives his 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 :'

The Bombay case referred to therein appears to deal with a decree where the appellant has applied for stay of further execution directing the payment of money to the successful party after the decree amount is lodged into Court. It is, therefore, difficult to comprehend that the principle laid down in that case could be applied with reference to a case for stay of enforcement of a decree appealed against. The decision of this Court in '9 Mys. L. J.' does nowhere lay down in categorical terms that a decree directing payment of money should not be stayed unless the decree amount is lodged into Court. Order 41, Rule 5, Civil P. C. 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. The said pro-vision provides that no order of stay of execution shall be made, unless the Court is satisfied that substantial loss' may result to the applicant if no order is made. It does not import any distinction between the decrees relating to payment of money and those concerning immoveable property. 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. The decision in '9 Mys. L., J.' is not, therefore, applicable to the circumstances of this case and does not help the respondents.

4. It is next urged that the appellants have not disclosed the nature and details of 'substantial loss' that may result so as to enable the Court to be satisfied whether such loss will be occasioned. In support of this contention the decision in 'AN-ANDI PRASHAD v. GOVINDA BAPU', AIR 1931 Nag 160 is cited. Vivian Bose, A.J.U. as he then was has observed in this decision as follows :

'It is not enough merely to repeat the words of the Code and state that substantial loss will result; the kind of loss must be specified, details must be given and the conscience of the Court must be satisfied that such loss will really ensue.'

Accepting the principle laid down in this case, there could be little doubt that there should be allegations sufficient to satisfy the Court that 'substantial loss' may occur to entitle the applicant to obtain the stay. It will therefore depend upon the particular circumstances of each case to deter-mine whether the applicant has made out a 'prima; facie' case.

This leads to the consideration whether the facts alleged in the application under consideration justify the grant of stay : The suit from which the appeal arises is one for specific performance of an agreement or in the alternative for damages. In the appeal it is contended that the suit is premature, that the decree for specific performance of the agreement, under which money was advanced to the appellants, should have been the proper remedy inasmuch as the money so advanced was applied to specific purposes according to the terms mutually agreed upon and that in any event a decree for damages is unsustainable as no breach of the terms of the agreement, upon which the suit is based, has yet taken place. It is argued in that context that the decree under appeal should be deemed to be one for damages for the alleged breach of contract and not a decree for enforcement of a simple debt.

Regarding the 'substantial loss', the averment in the affidavit is that 'substantial loss will result to me and to my family, the defendants in the suit and it further exposes to irreparable hardship'. The respondents contend that that allegation about the 'substantial loss' is no better than a bare statement which is not enough to enable the appellate Court to judge whether an order of stay could be passed. I am unable to agree with that argument. The allegation about loss is not merely confined to the deprivation of money that goes to satisfy the decree, but touches the efficient condition and stability of the firm itself as the enforcement of the decree (which in this case amounts to about a lakh of rupees) may not only completely paralyse the running business but end in ruin the venture itself to which the suit amount was applied by common consent.

5. I am therefore of opinion that in the circumstances of the present case the applicants havemade out 'substantial loss' to satisfy the provisionsof Order 41, Rule 5, Civil P. C. In the result the interimorder is made absolute and the costs of these interlocutory applications will be borne by the respective parties.

6. Appeal dismissed.


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