The Supreme Court upheld the High Court’s grant of unconditional stay on a money decree’s execution under Order XLI Rule 5, CPC, ruling that deposit of the decretal amount is not mandatory. An unconditional stay can be granted in exceptional cases where the decree is egregiously perverse, patently illegal, or facially untenable, upon establishing “sufficient cause.”
Facts Of The Case:
The petitioners, Lifestyle Equities C.V. & Anr., proprietors of the “Beverly Hills Polo Club” (BHPC) trademark, filed a suit for infringement and damages against Amazon Technologies Inc. and others before the Delhi High Court. The suit claimed damages of approximately Rs. 2 crore. Amazon was proceeded against ex parte in April 2022. The learned Single Judge, after an ex parte trial, decreed the suit in February 2025, awarding damages of about Rs. 336 crore and costs against Amazon. The defendant filed an appeal and sought a stay on the execution of this money decree under Order XLI Rule 5 CPC. The Division Bench of the High Court granted an unconditional stay of the decree without requiring Amazon to deposit the decretal amount, merely directing it to furnish an undertaking to comply if the appeal failed. The decree-holders challenged this order before the Supreme Court, contending that the High Court erred in granting an unconditional stay in contravention of the mandatory deposit requirement under Order XLI Rule 5(5) CPC for money decrees.
Procedural History:
The procedural history commences with the filing of Civil Suit (COMM) No. 443 of 2020 by the plaintiffs before the Delhi High Court. The learned Single Judge decreed the suit ex parte against Amazon Technologies Inc. on 25th February 2025, awarding substantial damages. Amazon filed a Regular First Appeal (RFA(O.S.)(COMM) No.11 of 2025) before the Division Bench of the Delhi High Court and moved an application under Order XLI Rule 5 CPC seeking stay of the decree’s execution. The Division Bench, by its order dated 1st July 2052, allowed the application and granted an unconditional stay without insisting on a deposit. Aggrieved by this order, the decree-holders (Lifestyle Equities) filed the present Special Leave Petition (C) No.19767 of 2025 before the Supreme Court of India, which, after hearing arguments, dismissed the petition and upheld the High Court’s order granting unconditional stay.
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Court Observation:
The Supreme Court observed that the word “shall” in Order XLI Rule 1(3) and Rule 5 of the CPC is directory, not mandatory, and deposit of the decretal amount is not an absolute condition precedent for granting a stay on a money decree’s execution. The Court held that an unconditional stay can be granted in exceptional cases where the decree is “egregiously perverse,” “riddled with patent illegalities,” or “facially untenable.” It found that the High Court, after a prima facie examination, correctly identified such exceptional circumstances—including lack of valid service of summons, absence of foundational pleadings for the colossal damages awarded, and no sustainable finding of infringement against the appellant—which constituted “sufficient cause” to grant an unconditional stay. The appellate court’s discretionary power under Order XLI Rule 5 must be exercised judicially and not arbitrarily.
Final Decision & Judgement:
The Supreme Court dismissed the Special Leave Petition and upheld the impugned judgment and order of the Delhi High Court. It concluded that the Division Bench had committed no error in granting an unconditional stay on the execution of the money decree under Order XLI Rule 5 CPC, as it had rightly found the existence of an “exceptional case” based on a prima facie view of patent illegalities, including invalid service of summons and a decree passed without requisite pleadings or findings on infringement. The Court affirmed that the deposit of the decretal amount is not a mandatory precondition for a stay and that the appellate court retains the discretion to grant an unconditional stay in appropriate cases where “sufficient cause” is demonstrated.
Case Details:
Case Title: LIFESTYLE EQUITIES C.V. & ANR. versus AMAZON TECHNOLOGIES INC. Citation: 2025 INSC 1190 Appeal Number: Petition for Special Leave to Appeal (C) No.19767 of 2025 Date of Judgement: 7th October, 2025 Judges/Justice Names: J.B. Pardiwala and K.V. Viswanathan
Download The Judgement Here