CENTRAL BANK OF INDIA versus STATE OF GUJARAT & ORS.

Citation: [1988] 1 S.C.R. 106 · Decided: 11-09-1987 · Supreme Court of India · Bench: RANGANATH MISRA, M.M. DUTT · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
CENTRAL BANK OF INDIA 
v. 
STATE OF GUJARAT & ORS. 
SEPTEMBER •ll, 1987 
B 
[RANGANATH MISRA AND MURARI MOHON DUTT, JJ.) 
Code of Civil Procedurtr--0.41, r. 5 (])-Exercise of power to stay 
1
execution of a decree--When an amount has been deposited pursuant to 
an order of execution the appellate court cannot order its refund to the 
judgment-debtor. 
! 
c 
The respondent filed a first appeal in the High Court against a {
decree and an application for stay of its operation. Before any order 
was made in the stay application, the appellant, who was the decree-
holder, levied execution, pursuant to which the respondent deposited 
D the decretal amount in the executing court. The responden( moved the 
High Court for an order stay of further proceedings in execution. The 
High Court passed an order of stay in the application already pending 
before it and directed refund of the amount deposited in the executing 
court to the respondent. The appellant challenged the order of refund. 
Allowing the appeal, 
~
E 
' 
HELD: In the absence of an order of stay. under 0.41, r. 5(1) 
C.P.C., the decree was executable and the judgment-debtor deposited 
the decretal dues In the executing court. Once the decretal dues had 
come into the executing court there was indeed no justiftcation fbr the 
F 
direction to refund the same to the judgment-debtor. On the other 
hand, the High Court could in its discretion either direct payment of the 
)-
amount to the decree-holder subject to terms safeguarding the interest 
of the judgment-debtor in the eventuality of reversal of the decree or 
direct the amount to be deposited or Invested on terms of interest so that 
on the disposal of the First Appeal appropriate directions could be 
G given. [IOSD-F) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2200 
of 1987. 
~ 
From the Judgment and Order dated 1123.4.1986 of the Gujarat 
H High Court in C.A. No. 953 of 1985. 
106 
CENTRAL BANK v. STATE OF GUJARAT 
107 
Soli J. Sorabjee, M.V. Singhvi, Mrs. Manik Karanjawala, N.J. 
A 
Mehta, R.F. Nariman, D.M. Shah and Rajan Karanjawala for the 
Appellant. 
Dr. Y.S. Chitale, T.U. Mehta, P.H. Parekh, Suresh Daluja, 
M.N. Shroff and Girish Chandra for the Respondents. 
The following Order of the Court was delivered: 
ORDER 
Special leave granted. 
Ordinarily in a matter of this jurisdiction under Article 136 of the 
Constitution would not have been permitted to be invoked but having 
heard learned counsel for the parties we are of the view that in the 
facts and circumstances of this matter, the order of the High Court 
should be reversed by allowing the appeal. 
The appellant, a nationalised Bank, obtained a decree in Civil 
Suit No. 1169 of 1977 from the City Civil Court at Ahmedabad against 
several defendants including the State of Gujarat. So far as the 
defendant-State is concerned, the decree ran thus:-
"The suit is partly decreed against the defendant 
No. 3 and the defendant No. 3 is ordered to pay 
Rs.59,69,422.59 to the plaintiff with interest at the rate of 
6% from the date of the suit till realisation of the amount 
by the plaintiff. The defendant No. 3 shall pay the propor-
tionate costs of the suit to the plaintiff and bear its own 
" 
The State of Gujarat has filed a First Appeal in the High Court of 
Gujarat being First Appeal No. 1993 of 1983 against the decree and it 
is pending disposal. An application for stay of execution of the opera-
tion of the decree was filed by the State of Gujarat being C.A. No. 953 
B 
c 
D 
E 
F 
of 1985 but before any order was made th~reon, the appellant decree-
G 
holder levied execution of the decree in Execution Application No. 
240 of 1985. On 5th of March, 1986, th~ State Government deposited 
the decreetal amount of Rs.88,92,280 in the Executing Court and 
moved the High Court for an order of stay of further proceedings in 
execution and for restraining the decree-holder from withdrawing the 
amount from the Executing Court by alleging that in the event of H 
108 
SUPREME COURT REPORTS 
[1988] 1 S.C.R. 
A reversal of the trial court's decree in appeal it would be difficult for the 
State Government to recover the amount. On 21st of March, 1986, the 
High Court passed an order of stay of execution in the pending appli-
cation, C.A., 953 of 1985, and on the 23rd of April, 1986, the 
impugned order was made directing refund of the amount deposited by 
the State Government in the Executing Court. Challenge is to the· 
B order directing refund. 
c 
D 
Or

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