Kiran Raj

The Supreme Court’s Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed a petition by Lifestyle Equities C.V. challenging the Delhi High Court’s order that stayed enforcement of a ₹336-crore money decree against Amazon Technologies Inc. The case stemmed from Lifestyle Equities’ claim that Amazon enabled the sale of goods bearing a logo resembling its registered “Beverly Hills Polo Club” trademark. In its decision, the Supreme Court resolved the long-standing debate over whether a deposit or security is a mandatory requirement for staying execution of a money decree. It clarified that under Order XLI Rule 5 of the Code of Civil Procedure, 1908, appellate courts have discretion to grant a stay without insisting on such deposits in appropriate or exceptional circumstances. The Court left the High Court’s order undisturbed, finding that Amazon’s undertaking to comply with the decree if its appeal ultimately failed was adequate, and held that failure to deposit the decretal amount cannot by itself result in dismissal of the appeal.

The dispute originated with allegations by Lifestyle Equities C.V., a Netherlands-based company, that Amazon Technologies Inc. facilitated trademark infringement by allowing sellers on its online platform to market goods bearing a logo and marks similar to the registered trademark “Beverly Hills Polo Club.” Lifestyle Equities claimed that such acts amounted to infringement of its statutory rights and passing off under Indian law.

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The Delhi High Court, after considering the pleadings and evidence, decreed in favour of Lifestyle Equities. The decree directed Amazon Technologies Inc. to pay approximately ₹336 crore as damages and costs for the alleged infringement. The High Court found that Amazon’s platform had enabled third-party sellers to use the infringing marks and thereby caused monetary loss to the trademark owner.

Amazon Technologies Inc. filed an appeal before the Delhi High Court against the money decree and applied for a stay of execution. The High Court, exercising its appellate jurisdiction, granted a discretionary stay of execution of the decree. Instead of ordering an upfront deposit of the decretal amount, the Court required Amazon to furnish an undertaking to comply with the decree in case its appeal was ultimately dismissed.

Aggrieved by this order, Lifestyle Equities approached the Supreme Court of India, contending that the stay without an upfront deposit deprived it of the fruits of the decree. It argued that the High Court’s order undermined the enforceability of a valid judgment and contravened principles that generally require security or deposit when stays of money decrees are granted.

In response, Amazon Technologies Inc. maintained that the High Court’s order was a judicious exercise of discretion. It emphasized that it had furnished the required undertaking, and that the petitioner’s insistence on an upfront deposit was unwarranted. It argued that the appeal raised substantial questions of law and that the discretionary stay was necessary to avoid irreparable consequences during the pendency of the appeal.

The submissions placed before the Supreme Court included the High Court’s money decree, the order granting the stay, affidavits and undertakings given by Amazon, and references to relevant provisions of the Code of Civil Procedure, 1908, particularly relating to execution of decrees and powers of appellate courts to grant stays with or without security.

The Court observed: “It is well settled that mere preferring of an appeal does not operate as stay on the decree or order appealed against nor on the proceedings in the court below. A prayer for the grant of stay … has to be specifically made to the appellate court and the appellate court has discretion to grant an order of stay or to refuse the same.”

It further stated: “In our opinion, while granting an order of stay under Order 41 Rule 5 CPC, the appellate court does have jurisdiction to put the party seeking stay order on such terms as would reasonably compensate the party successful at the end of the appeal….”

Quoting the settled position, the Bench recorded: “A bare reading of the two provisions … shows a discretion having been conferred on the appellate court to direct either deposit of the amount disputed in the appeal or to permit such security in respect thereof being furnished as the appellate court may think fit. Needless to say that the discretion is to be exercised judicially and not arbitrarily…. Ordinarily, execution of a money decree is not stayed… Still the power is there, of course a discretionary power, and is meant to be exercised in appropriate cases.”

Referring to precedent, the Court noted: “An exceptional case has to be made out for stay of execution of a money decree. The parliamentary intent should have been given effect to.”

On the interface with arbitration jurisprudence, the judgment stated: “it is difficult to rule out the existence of an unconditional stay in cases outside the second Proviso… [the analysis] suggests that unconditional stays can be granted even in cases outside the second Proviso.”

Consistent with that reading, it recorded: “the discretionary power of the court under the main part of Section 36(3)… After all, it is not inconceivable to contend that a power to impose conditions would also include the power not to impose conditions.”

Addressing the form of security, the Court stated: “There is no provision under Order XLI Rule 5 of the CPC imposing a mandate to deposit cash security as the only mode of security for execution of the decree. Security… can be in the shape of property, bond and or in the form of an appropriate undertaking from the appellant to abide by the decree, seeking stay of execution.”

On procedural regularity, the Court recorded: “the Court’s jurisdiction over a respondent is founded on a valid service of summons…. Proper service of summons is used to protect one’s right to due process.” It added: “substituted service… is extraordinary in character and in derogation of the usual method of service.”

In its conclusion, the Supreme Court summarized the law on stay of execution under Order XLI CPC. It stated: “Order XLI Rule 5 contains the provision for the grant or refusal of stay of execution of the decree by the appellate court under the CPC. It categorically stipulates that mere filing of an appeal against an order of execution shall not ipso facto operate as stay of proceedings. Any execution proceeding or an order therein shall be stayed only if a specific, reasoned order granting such stay is passed by the appellate court, after proper application of mind.”

“For the grant of stay of execution of a decree in terms of Order XLI, a prayer to such effect has to be specifically made to the appellate court and the appellate court has the discretion to grant an order of stay or to refuse the same.”

“Order XLI Rule 5(3) … provides for satisfaction regarding sufficient cause as a pre-condition for granting benefit of stay of execution of decree, and it casts an obligation upon the appellate court to record its satisfaction….”

The Bench clarified that to determine “sufficient cause” the appellate court must examine: “(i) Whether there will be substantial loss to the party applying for stay; (ii) Whether the application has been made without unreasonable delay; and (iii) Whether security has been given by the applicant for due performance of the decree.”

“It is not mandatory … to impose a condition for deposit of the amount in dispute. … A deposit is not a condition precedent for an order of stay of execution … The only guiding factor … is the existence of ‘sufficient cause’ in favour of the appellant….”

“For the grant of benefit of an unconditional stay … an exceptional case has to be made out … [such as when the money decree is] (i) egregiously perverse; (ii) riddled with patent illegalities; (iii) facially untenable; or (iv) such other exceptional causes similar in nature.”

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“There is no provision under Order XLI Rule 5 … imposing a mandate to deposit cash security as the only mode of security … security … can be in the shape of property, bond and or in the form of an appropriate undertaking from the appellant….”

Finally, the Bench concluded: “We should not disturb the impugned judgment and order passed by the Division Bench of the High Court. It is needless to clarify that the main appeal shall be decided on its own merits … It shall be open for the parties to put forward all contentions … at the time of the final hearing of the Regular First Appeal. Registry shall forward one copy each of this judgment to all the High Courts.”

Advocates representing the parties:

For the Plaintiffs: Mr. Mukul Rohatgi, Mr. Gaurav Pachnanda

For the Defendants: Dr. Abhishek Manu Singhvi, Mr. Neeraj Kishan Kaul and Mr. Arvind Nigam

Case Title: Lifestyle Equities C.V. & Anr. v. Amazon Technologies Inc.
Neutral Citation: 2025 INSC 1190
Case Number: Petition for Special Leave to Appeal (C) No.19767 of 2025
Bench: Justice J.B. Pardiwala; Justice K.V. Viswanathan.