In my view exercise of power under Order 41, Rule 1(3) of Civil Procedure Code is also necessary looking to the amendment made by the Bombay High Court in exercise of its power under Section 122 of Civil Procedure Code, whereby; proviso came to be inserted in the said provision, In absence of proviso, the Appellate Court had discretion only to grant time to deposit and/or furnish security. Proviso contemplates recording of reasons to dispense with such deposit or security. It is necessary to give purposive construction to the aforesaid provision. The exercise of power under Order 41, Rule 1(3) will curtail one important stage in the litigation i.e. proceedings for execution of the decrees which is bound to reduce the burden of the executing Courts to that extent. Absence of any application under Order 41, Rule 5 of Civil Procedure Code for stay and absence of any order under Order 41, Rule 1(3) is bound to drive the decree holder to the executing Court to execute the decree. In that event, the executing Court will have no option but to initiate proceedings for execution of the decree, which is bound to take considerable time of the litigants and that of executing Court and also bound to cause strain on the purse of the litigants. In this backdrop, I take the purpose of Order 41, Rule 1(3) is to avoid multiplicity of proceedings i.e. appellant may file only appeal and after it is admitted, then again may apply for stay on account of execution proceedings initiated by the decree holder. In order to arrest this tendency to protract litigation and to prevent execution of money decree pending appeal, this provision has been brought on the statute book.
Bombay High Court
Bhogvati Sahakari Sakhar ... vs Chaugule And Sons on 12 December, 2002
Equivalent citations: 2003 (2) MhLJ 562
Bench: V Daga
1. Heard learned counsel for the appellant. Perused record. Having examined the judgment and decree and the findings recorded therein, in the backdrop of challenges set up in the appeal, I am of the view that the appellant has made out a prima facie case for admission of the appeal.
'Admit'.
2. While hearing this appeal for admission, it was noticed that the appellant did not pray for interim relief. The impugned money decree directs the appellant/original defendant to pay sum of Rs. 38,263.18 to the respondent original plaintiff together with future interest thereon at the rate of 6% per annum. The appellant therefore, was called upon to show cause; why the powers under Order 41, Rule 1(3) of the Code of Civil Procedure, 1908 ("C. P. C." for short) should not be exercised directing it to deposit decretal amount pending adjudication of the appeal.
3. The learned counsel for the appellant, in reply contends that deposit of money or furnishing security can not be put as a condition precedent for tenability of the appeal. In his submission no such order can be passed in exercise of powers under Order 41, Rule 1(3) of Civil Procedure Code. He submits that considering the legislative history of the provision no such order should be passed. He relies on Amending Act; being the Act 104 of 1976 which came into effect from 1st February 1977, whereby Order 41, Rule 1(3) has been inserted. It 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."
Sub-rule (5) of Rule 5 of Order 41 has also been amended by the same Amending Act.
The Code of Civil Procedure (Amendment) Bill, 1974, (Bill No. 37 of 1974) which was introduced in Parliament contained, inter alia; the following relevant provision:
"In the First Schedule, in Order XLI. -
(i) in Rule 1,
(a) to Sub-rule (1), the following proviso shall be added, namely :--
"Provided that where two or more suits have been tried together and a common judgment has been delivered therefor and two or more appeals are filed against any decree covered by the judgment, whether by the same appellant or by different appellant, the Appellate Court may dispense with the filing of more than one copy of the judgment."
(b) after Sub-rule (2), the following Sub-rule shall be inserted, namely :--
"(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";
(ii) in Rule 3, after Sub-rule (1) the following Sub-rule shall be inserted, namely:--
(1A) Where the appellant fails to make deposit or furnish security specified in Sub-rule (3) of Rule 1, the Court shall reject the memorandum of Appeal....."
The bill was referred to; for consideration of the Joint Committee. The Joint Committee in its report submitted to the Lok Sabha on 1st April 1976, as published in Gazette of India; Extraordinary, Part II, Section 2 (paragraph 65) thereof stated as under :--
"65; Clause 87 (original Clause 90). -
(i) The Committee note that under the proposed new Sub-rule (1A) of Rule 3 in Order XLI, 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.
The Committee are, therefore, of the opinion that in order to see that justice 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."
4. The learned counsel thus submits that a bare reading of the report of the Joint Committee and consequent omission of Rule 1A, from Order 41 as proposed in the Bill, clearly shows that the intention of the Parliament was not to insist upon the deposit of the amount or security before filing of appeal against money decree as a condition precedent for valid presentation of the appeal.
5. The learned counsel went on to cite two authorities; one in the case of State of Andhm Pradesh v. Mahmud Hasan, AIR 1983 Andra Pradesh 277 and Anr. in case of Tata Chemicals Ltd. v. Sadhu Singh, and, lastly, the judgment of this Court in the case of Prabhakar v. Vinayakrao which lay down that the deposit of decretal amount or furnishing security before filing appeal against the money decree is not a condition precedent for valid presentation of appeal.
6. The learned counsel placed strong reliance on the judgment of the Delhi High Court in the case of Union of India v. Jagan Nath Radhey Shyam, AIR 1979 Delhi 56 and, particularly, on the following observations made therein :
"Reading Sub-rule (3) of Rule 1 of the Order 41 along with Sub-rule (5) of Rule 5 of the Code, all that can be said is that so long as the decretal amount is not deposited or security is not furnished, the court shall not make an order staying the execution of the decree."
In the above case of Jagan Nath Radhey Shyam (supra), Yogeshwar Dayal, J. (as His Lordship then was) expressed that all that can be said is that so long as the decretal amount is not deposited, or security is not furnished, the Court may not make an order staying the execution of the decree. In order to appreciate the said view, let me take a survey of the opening provisions of Order 41 in general and Sub-rule (5) of Rule 5 in particular in the backdrop of provision under Order 41, Rule 1(3) of Civil Procedure Code.
7. Order 41, Rule 1(3) reads as under :
"Order XLI. APPEALS FROM ORIGINAL DECREES.
1. Form of appeal--What to accompany memorandum.
(1).......
(2).......
(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."
"Provided that the Court may dispense with the deposit or security where it deems fit to do so for sufficient cause."
Sub-rule (5) of Rule 5 of Order 41 reads as under:
"(5). Notwithstanding anything contained in the foregoing Sub-rule, 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."
The reading of Sub-rule (5) of Rule 5 would show that it casts duty on the Court not to make an order staying execution of the decree where the appellant fails to make deposit or furnish security specified in Sub-rule (3) of Rule 1. This provision, therefore, pre-supposes an existence of (prior) order under Order 41, Rule 1(3) of Civil Procedure Code. In absence of pre-existing order under Order 41, Rule 1(3), Sub-rule (5) of Rule 5 of Order 41 will have no role to play. In other words, Sub-rule (5) of Rule 5 of Order 41 of Civil Procedure Code will come into play only, if, prior order under Order 41, Rule 1(3) is in existence. Now the question is : in absence of any such prior order, under Order 41, Rule 1(3) of Civil Procedure Code how to press into service the provision of Order 41, Rule 5(5) or exercise power conferred therein. If the observations made in the case of Jagan Nath Radhey Shyam (supra) are taken to be correct, I put a question unto myself, would Sub-rule (5) of Rule 5 of Order 41 of Civil Procedure Code come into play, so as to consider the contingency referred to therein, in absence of any prior order under Order 41, Rule 1(3). To my mind, answer should be, in the negative.
8. If the interpretation, which found favour in the above case of Jagan Nath Radhey Shyam (supra), is accepted as correct, then, not only the provision of Order 41, Rule 1(3) but Order 41, Rule 5(5) will also become a dead letter in the absence of prior order under Rule 1(3) of Order 41. No such interpretation can be put on the statutory provisions which will render any provision a surplusage or a dead letter. Statute must be construed to make it effective and workable. The Courts strongly lean against, a construction which reduces the statute to a futility. A statute or any enacting provision therein must be so construed so as to make it effective and operative. Each provision has to be interpreted in such a way that it should get full scope, to operate in its own field. It is no doubt true that the reports of the Joint Committees, which preceded the enactment of the legislation, are permissible aids to construction in case of ambiguity. To my mind there is no ambiguity, if the provisions of Order 41 of Civil Procedure Code are read as a whole. The Courts are to interpret laws and not to enact laws. The Courts are not entitled to usurp legislative function. In this view of the matter, with respect, I am unable to subscribe to the view taken in the case of Jagan Nath Radhey Shyam (supra) by the learned single Judge of the Delhi High Court.
9. In my view exercise of power under Order 41, Rule 1(3) of Civil Procedure Code is also necessary looking to the amendment made by the Bombay High Court in exercise of its power under Section 122 of Civil Procedure Code, whereby; proviso came to be inserted in the said provision, In absence of proviso, the Appellate Court had discretion only to grant time to deposit and/or furnish security. Proviso contemplates recording of reasons to dispense with such deposit or security. It is necessary to give purposive construction to the aforesaid provision. The exercise of power under Order 41, Rule 1(3) will curtail one important stage in the litigation i.e. proceedings for execution of the decrees which is bound to reduce the burden of the executing Courts to that extent. Absence of any application under Order 41, Rule 5 of Civil Procedure Code for stay and absence of any order under Order 41, Rule 1(3) is bound to drive the decree holder to the executing Court to execute the decree. In that event, the executing Court will have no option but to initiate proceedings for execution of the decree, which is bound to take considerable time of the litigants and that of executing Court and also bound to cause strain on the purse of the litigants. In this backdrop, I take the purpose of Order 41, Rule 1(3) is to avoid multiplicity of proceedings i.e. appellant may file only appeal and after it is admitted, then again may apply for stay on account of execution proceedings initiated by the decree holder. In order to arrest this tendency to protract litigation and to prevent execution of money decree pending appeal, this provision has been brought on the statute book.
10. A judicial note, at this stage, can be taken that in our country it is said that it is easy to obtain decree but difficult to execute it. If the power under Order 41, Rule 1(3) of Civil Procedure Code is exercised by the Appellate Court, upon prima facie satisfaction; then, in that event, exercise of such power will result in realisation of the fruits of the decree. The provision made under Order 41, Rule 1(3) of Civil Procedure Code appears to be in public interest with intention to shorten the length and width of the unnecessary litigation and to prevent multiplicity of the proceedings and at the same time to help the decree holder to realise the fruits of the decree obtained by him. This often not used provision needs to be activated and put into operation considering the flooded corridors of the Court which, in my view, would not only serve the ends of justice between the parties but serve the cause of administration of justice.
11. The learned single Judge of this Court in the case of Prabhakar v. Vinayakrao (supra) while considering the scope of Sub-rule (3) of Rule 1 of Order 41 of Civil Procedure Code ruled that the said provision does not impinge on the tenability of the appeal. But while laying down this proposition a caveat is made that it would be open for the Appellate Court to pass an order under Order 41, Rule 1(3) of Civil Procedure Code, if it is called upon to do so, and if it thinks necessary to do so; otherwise than as a condition precedent for the tenability of the appeal. I, respectfully, agree with the ratio laid down. Order 41, Rule 1(3) of Civil Procedure Code cannot be used as a condition precedent for valid presentation of the appeal, but after admission of the appeal, if the Appellate Court, prima facie, finds that the case warrants exercise of powers under Order 41, Rule 1(3) of Civil Procedure Code, may be at the instance of the opposite party or suo motu, in that event, certainly, such power can very well be invoked and/or exercised in the interest of justice; rather exercise of such power would be in consonance with the legislative intention behind this provision. Merely because appeal is a statutory remedy, recourse to such remedy should not be allowed to be taken routinely and therefore, to act as a deterrent. Order 41, Rule 1(3) has been enacted.
12. The Apex Court while interpreting the identical provision, in somewhat different circumstances, in the case of Kayamuddin Shamsuddin Khan v. State Bank of India, observed as under:
"7........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." 8. This would mean that non-compliance with the direction given regarding deposit under Sub-rule (3) of Rule 1 of Order XLI 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."
13. The above judgment of the Apex Court is inapplicable on the question posed herein. In that judgment the order of deposit was made as a condition precedent for admission of the appeal. That is not the case here. The Apex Court was not considering the issue whether or not suo motu order can be passed under Order 41, Rule 1(3) in absence of any prayer in this behalf. The decision of the Apex Court does not lay down any proposition that where the appellant is not seeking stay of the decree the Court cannot order deposit. The reading of the above judgment of the Apex court in its proper perspective would mean that while considering the application seeking stay of the execution of the decree, the same could be rejected for non-compliance with the directions directing deposit under Sub-rule (3) of Rule 1 of Order 41 of Civil Procedure Code. The Apex Court judgment only says that the Court could not give a direction for dismissal of the appeal for such non-compliance. The ratio laid down is absolutely clear that Rule 1(3) cannot be used as a condition precedent for valid presentation of appeal. In this case, at this stage, I am not faced with such question as the appeal is admitted without putting any condition in this behalf. Thus, on fair reading, the Apex Court judgment also contemplates or pre-supposes pre-existing order under Sub-rule (3) of Rule 1 of Order
41. To refuse to grant application seeking stay on the ground of no compliance of the order under Order 41, Rule 1(3), there has to be a prior order in this behalf. The judgment nowhere said that no such order could be passed in the appeal. The view taken by me thus is in consonance with the view expressed by the Apex Court.
14. On the aforesaid canvas of discussion and the view taken by me, another incidental question which needs consideration is mode, manner and occasion to pass such order under Sub-rule (3) of Rule 1 of Order
41. How this power is to be invoked by the Appellate Court; whether at the instance of the appellant or suo-motu? In other words, whether order should be passed only upon the prayer made by the appellant or the Court can pass such order suo-motu in absence of such prayer.
15. In order to address this question it is necessary to take into account the placement of the provision with which I am concerned. Sub-rule (3) is placed under Rule I of Order 41 of Civil Procedure Code. The heading for the preceding Rule 1 is "Form of Appeal" and what to accompany memorandum; whereas heading prefixed to Sub-rules (2) and (3) reads as "Contents of Memorandum". Thus Sub-rule (3) finds place under the said heading. The heading prefixed to a section or sets of sections or Rules are regarded as preamble to those sections. They cannot control the plain words of the statutes, but they certainly help the Court to resolve the doubt as held by the Apex Court in Bhinka v. Chavan Singh, . Thus considering placement of Sub-rule (3), which was inserted to Order 41, Rule 1 by Civil Procedure Code (Amendment) Act, 1976, makes it mandatory in case of appeal against money decree that appellant shall deposit the amount disputed in the appeal or furnish such security in respect thereof as the Court may think fit, within such time as may be allowed by the Court.
16. The proviso to Sub-rule (3) inserted by virtue of amendment made by this Court (Bombay High Court Amendment), which provides that the Court may dispense with the deposit or security where it deems fit for sufficient cause, indicates that the prayer to seek time to deposit or furnish security or to dispense with the necessity of deposit or security or both must be a part of memo of appeal. The grounds in support of such prayer contemplated in the provision can only be a part of appeal memo, as such each appeal memo has to contain such prayer with adequate material so as to enable the Appellate Court to exercise proper discretion in that behalf. That is why the provision of Sub-rule (3) of Rule 1 finds place under the umbrella of the provisions which provide for what should be the contents of memorandum of appeal. In absence of any such prayer and adequate material in support thereof in appeal or may be in a separate application or motion can mean or be treated as 'no objection' on the part of the appellant to deposit disputed amount and that the appellant does not want the Appellate Court to exercise discretion in his favour; as such the Appellate Court can very well direct deposit of the amount in exercise of its suo motu powers, even if there is no such prayer for stay.
At any rate, such order will prevent application for stay in future. Exercise of such suo motu powers would thus be in the interest of justice.
17. In this case, appellant is not seeking any stay of execution of the money decree, obviously, knowing full well that no stay of money decree would be granted by the Court in view of clear law laid down by the Apex Court in the case of Mehta Teja Singh & Co. v. Grindlays Bank Ltd., and Central Bank of India v. State of Gujarat, . The appellant also knows well that mere admission of appeal does not amount to stay of decree appealed against. The appellant knows well that the respondent/decree holder is bound to move for execution of decree but not without crossing number of legal hurdles which are normally created in the way of decree holder. In our legal system in the present shape and form is amongst slowest in the World. In this view of the scenario, in my opinion, the discretion conferred on the Appellate Court under Order 41, Rule 1(3) of Civil Procedure Code needs to be exercised in a proper case to serve the ends of justice. In my view the case at hands is one of such cases.
18. It is true that, at the time of exercising this discretionary power the Appellate Court has to take into account the nature of the decree, legal challenges set up in the appeal including strength thereof. Discretion has to be exercised judiciously keeping in mind that interest of justice and Rule of law can only be served by shortening the length and breadth of the litigation and preventing multiplicity of the proceedings; so as to help early disposal of cases in the lower courts.
19. Here is a appellant who has filed appeal but does not want to pray for interim stay of execution of money decree. If that be so, this Court would be justified and well within its jurisdiction to draw an inference based on the conduct of the appellant that it has no objection to pay decretal liability. If that be so, why the appellant should not satisfy the decretal claim subject to the result of the appeal and decision thereon, especially, when the respondent/decree holder is successful at least in one Court. The right of appeal should not result in taking away the fruits of success achieved in the trial Court. Mechanical admissions of first appeals, as a matter of course, does not serve the interest of justice. The Appellate Courts are expected to exercise powers and activate the provisions of law so as to make them serve administration of justice.
20. Having said so, let me turn to the decree, which is the subject matter of challenge in this appeal. Prima facie; findings are recorded by the trial Court in favour of the decree holder on the basis of documentary and oral evidence. Looking to the material on record and findings recorded, I feel that exercise of power under Order 41, Rule 1(3) of Civil Procedure Code in this case is necessary; as such the appellant needs to be directed to deposit entire decretal amount with interest and costs. Accordingly, I direct the appellant to deposit decretal amount in the executing Court within eight weeks from today subtracting the amount, if any, already paid or deposited in the Court below. On such deposit, the respondent/decree holder shall be entitled to withdraw this amount on furnishing security to the satisfaction of the trial Court within eight weeks thereafter, failing which, the trial Court shall be free to invest the same with any nationalised bank, initially, for a period of 37 months and shall keep the said investment renewed from time to time until further orders.
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