JUDGMENT
Shiv Kumar Sharma, J.
1. At the time of consideration of submissions advanced in respect of admission of the appeal a short and interesting question arose in respect of interpretation of the provisions contained in Sub-Rule (3) of Rule 1 of Order 41 CPC which provides that “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.”
2. Mr. R.K. Agrawal, learned counsel appearing for the appellants canvassed that the various High Courts had occasion to interpret the aforesaid Sub-Rule(3)of Rule 1 of Order 41 along with Rule 5 of Order 41 CPC and it was held that the aforesaid rule is not mandatory in nature.
3. The basic ruling in this regard is Union Bank of India v. Jagan Nath Radhey Shyam and Co. AIR 1979 Delhi 36. The Code of Civil Procedure (Amendment) Bill, 1974, (Bill No. 27 of 1974) as introduced in the Parliament was considered by the Delhi High Court and it was held in paras 18, 19 and 20 thus :
“18. After this report of the Joint Committee, we find that the proposed Rule 1-A was omitted from the Act as passed by Parliament and Rule 5 of Order 41 of the Code was suitably amended.”
“19. A bare reading of the report of the Joint Committee and thereafter the omission of Rule I -A from Order 41 as proposed in the Bill clearly shows that the intention of the Parliament was not to make the deposit of the decretal amount or the furnishing of the security before filing of appeal against money decree as a condition precedent for valid presentation of the appeal. There is thus no force in this submission as well.”
“20. 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 order staying the execution of the decree.”
4. In J. Lakshmikantham v. Uppala Rajamma AIR 1982 Andhra Pradesh 337, it was indicated thus —
“A bare reading of Clause 87 (original Clause 90) of the Joint Committee Report concerned with the Amendment Bill of the Civil P. C. which was Bill No. 27 of 1974 and thereafter the omission of Rule 1-A from Order 41 as proposed in the Bill, clearly shows that the intention of the Parliament was not to make the deposit of the decretal amount or the furnishing of the security before filing of appeal against a money decree, as a condition precedent for valid representation of the appeal. As a corollary therefore it equally follows that what could not be a Condition precedent for filing the appeal could not equally be allowed to be a condition precedent for final adjudication as well.”
5. In State of Andhra Pradesh v. Mahmud Hasan Khan Maharaj Kumar of Mahamoodabad AIR 1983 Andh Pra 277, the Division Bench of Andhra Pradesh High Court in Para 4 propounded thus at pages 277-278 —
“4. The contention thus raised, in our view, is without any substance. On a reading of Sub-Clause (3) of Rule 1 and Sub-Clause (5) of Rule 5 of Order 41, especially having regard to the words “may allow” in Sub-Clause (3) of Rule 1 the Parliament did not state before an application for stay of execution of money decree is made, money should be deposited or security must be tendered. The language of the two provisions does not indicate compliance of either of the two conditions is mandatory or that it is a condition precedent. In our view, without making the deposit or without tendering security, a “stay” application is maintainable. The Appellate Court in granting the order of stay, however will have regard to the fact whether money was deposited or sufficient security was tendered and in context of the situation, Court, may pass orders as it “thinks fit”. In this view, the contentions of the respondent are rejected.”
6. In Prabhakar v. Vinayakrao AIR 1983 Bom 301, it was observed in para 4 thus at page 302 —
“As said above the assumption of the Appellate Court that the appeal would not be tenable unless the decretal amount is paid is not correct
and valid. Hence if the very foundation on which the order dated 24-9-1980 has been based is knocked out, the order itself would fall to the ground. Since it cannot be said as to whether the Appellate Court wouldhave passed the impugned order on its own motion if it was aware of the correct legal position that the provision contained in Sub-Rule (3) of Rule 1 of Order 41 of the Code does not impinge on the tenability of the appeal, the impugned order has to be set aside. It may, however, be made clear that it would be open for the Appellate Court to pass an order under 0rder 41, Rule 1(3) again 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.”
7. In Himachal Pradesh Transport Corporation Shimla v. Sushila Devi, AIR 1986 HP 78, the Division Bench of Himachal Pradesh High Court propounded thus —
“The foregoing discussion would indicate that the provisions of Sub-Rule (3) of Rule 1 of Order 41 cannot be regarded as mandatory notwithstanding the use of the word “shall”. The legislative history, the nature and design of the statute, the purposeful absence in the enactment of a provision which visits its non-compliance with appeal, the impact of a cognate provision which forbids stay being granted in the event of such non-compliance etc. are all factors pointing in the direction of the provision being not mandatory as has been held by the other High Courts in the decisions died before us. It is one thing to hold, however, that Sub-Rule (3) of Rule 1 is directory and quite a different thing to view it as conferring discretion on the Court to altogether dispense with the requirement of depositing the amount of furnishing security. A provision giving a discretionary power leaves the donee of the power free to use or not to use it at his discretion. A directory provision, however, gives no discretionary power to do or not to do the things directed. A directory provision is intended to be obeyed but failure to obey does not render a thing duly done in disobedience of it a nullity (See : Drigraj Kuer v. Amar Krishna Narain Singh AIR 1960 SC 444). Merely because Sub-Rule (3) of Rule 1 is regarded as directory, it would not be right to conclude, therefore, that it confers discretion on the Court to dispense altogether with
its requirement, even in a case where a justifiable ground to relieve the appellant from the obligation may appear to exist. The only discretion which is conferred on the Court under the enactment embraces limited field; the Court may, in its discretion, direct that the appellant should deposit the amount, even if it be by instalments, or furnish security, and, in either case, it may fix a reasonable time limit for compliance of the direction. There is no warrant to enlarge this discretion into one which enables the Court to dispense altogether with the requirement of making the deposit or furnishing the security. The plain words of the enactment do not permit such a view being taken. Indeed, to do so would defeat the legislative intent which was to ensure that the law should, to the extent possible, help in ensuring a fair deal to an unsuccessful litigant by conferring and protecting the right of appeal but, at the same time, provide a quick redress to a successful litigant so that he can realise the fruits of the decree.”
8. Whether the provisions of Order 41 Rule 1 (3) CPC can be treated mandatory or directory, the learned counsel Shri R.K. Agrawal placed reliance on Administrator, Municipal Committee Charkhi Dadri v. Ramji Lal Bagla (1995) 5 SCC 272 (1995 AIR SCW 3462), wherein it was indicated that one of the well accepted tests for determining whether a provision is directory or mandatory is to see whether the enactment provides for the consequence flowing from non-compliance with the requirement prescribed.
9. I have pondered over the submissions advanced before me and carefully weighed the legal position.
10. A look at the legislative history in enacting the aforesaid Sub-Rule demonstrates that it was never the intention of the Legislature to make compliance with Sub-Rule (3) as a condition precedent for preferring an appeal against a decree for payment of money. The Code of Civil Procedure (Amendment) Bill 1976 (Bill No. XXIV of 1976) proposed insertion of the said Sub-Rule in the form in which it has been enacted. At the same time the Bill also proposed to insert Sub-Rule (1-A) in Rule 3 of Order 41 thus —
“(1-A). 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.”
This Bill was referred to a Joint Committee of both the Houses of Parliament which submitted its report on 1-4-1976. Paragraph 65 of the report dealt with the Clause of the Bill under which the above-said two sub-rules were sought to be inserted in Rule 3 of 0.41. The Committee was of the view that in order to see that justice is 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. Ultimately when the said Bill went through both the Houses of Parliament and emerged as the Code of Civil Procedure (Amendment) Act, 1976, the insertion of Sub-Rule (1-A) in Rule 3 was modified as recommended by the Joint Committee and enacted as Sub-Rule (5) of Rule 5 thus —
“(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.”
11. The fall out of this whole legislative history is that the Parliament never intended that a person who intends to prefer an appeal against the decree for payment of money has, as of necessity, to comply with the provision contained in the said Sub-Rule as a condition precedent for the tenability of the appeal.
12. The High Courts of Bombay, Andhra Pradesh, Delhi and Himachal Pradesh though observed that compliance of said Sub-Rule was not mandatory yet did not completely ignore the said sub-rule.
13. In Prabhakar v. Vinayakrao AIR 1983 Bom 301 as already stated, it was observed by the Bombay High Court that “it may, however, be made clear that it would be open for the Appellate Court to pass an order under Order 41 Rule l(3) again if it is called upon to do so and if it is thinks necessary to do so otherwise than as a condition precedent for the tenability of the appeal.”
14. Similarly in State of Andhra Pradesh v. Mahmud Hasan Khan Maharaj Kumar of Mahamoodabad (supra), the Division Bench of the Andhra Pradesh High Court indicated thus —
“The Appellate Court in granting the order of stay, however will have regard to the fact whether
money was deposited or sufficient security was tendered and in context of the situation, Court, may pass orders as it “thinks fit”.
15. Though in the earlier part of para 4 of the said judgment it was observed that the language of the provisions of Sub-Rule (3) of Rule 1 and Sub-Rule (5) of Rule 5 of Order 41 CPC does not indicate compliance of either of the two conditions is mandatory or that it is a condition precedent. The stay application without making deposit or without tendering security was found maintainable.
16. The Division Bench of the Himachal Pradesh High Court in Himachal Road Transport Corporation Shimla v. Sushila Devi (supra) observed that there is no warrant to enlarge the discretion into one which enables the Court to dispense altogether with the requirement of making the deposit or furnishing the security.
17. Delhi High Court in Union Bank of India v. Jagan Nath Radhey Shyam and Co. (supra) directed in para 20 that combined reading of Sub-Rule (3) of Rule 1 of the Order 41 and Sub-Rule (3) of Rule 1 of the Order 41 and Sub-Rule (5) of Rule 5 of Order 41, reveals that so long as the decretal amount is not deposited or security is not furnished the Court shall not make order staying the execution of the decree. His Lordship in the said case did not observe that Sub-Rule (3) of Rule 1 of Order 41 should be completely ignored.
18. In J. Lakshmikantham v. Uppala Rajamma (supra), it was however propounded that the intention of the Parliament was not to make the deposit of the decretal amount or the furnishing of the security before filing of appeal against money decree as a condition precedent for valid presentation of the appeal.
19. After close scrutiny of the aforesaid observations, I am of the opinion that in view of the provisions of Sub-Rule (5) of Rule 5 of Order 41 CPC it cannot be held that appeal against the ‘ decree for payment of money is not maintainable, if filed without making compliance of the provisions contained in Sub-Rule (3) of Rule 1 of Order 41 CPC and it is the duty of the Registry to see that on application under Order 41 Rule 5 CPC seeking stay of money decree the appellant has to incorporate a note in regard to his readiness and willingness to comply with the directions under Sub-Rule (3) of Rule 1 of Order 41 CPC. If the appeal is preferred against the decree for payment of money without any stay application
under Order 41 Rule 5 CPC then in that event, it is the duty of the appellant to incorporate a note in the memo of appeal in respect of his readiness and willingness to comply with the directions issued by the Court under Sub-Rule (3) of Rule I of Order 41 CPC.
20. The legal question stands disposed of as indicated above. The appellant is directed to comply the aforesaid directions. The matter be listed for admission on 12-4-1999.
21. The Deputy Registrar (Judicial) is directed to comply with the aforesaid directions in all such appeals preferred against the decree for payment of money at the time of presentation of
the appeals.