The Andhra Pradesh High Court has clarified that courts must tailor conditions for staying execution of decrees to the financial reality of the judgment debtor, rejecting rigid percentages in favor of equitable discretion. This ruling reinforces that procedural fairness under Article 227 requires more than mechanical compliance - it demands contextual justice.
Background & Facts
The Dispute
The petitioner, a salaried employee at a thermal power station, was ordered to pay ₹6,28,434/- plus interest to the respondent in a civil suit concerning a land dispute. The decree was upheld on appeal, prompting the respondent to seek execution. The petitioner sought a stay of execution, arguing that he lacked the means to deposit 50% of the decretal amount, which amounted to approximately ₹3,14,217/-. The lower court granted stay but imposed the 50% deposit condition, with dismissal of the appeal in default of compliance.
Procedural History
- 2021: Original suit filed (O.S. No. 1668 of 2021) resulting in decree for respondent
- 2025: First appeal filed (A.S. No. 157 of 2025); decree affirmed
- 20.11.2025: II Additional District and Sessions Judge granted stay of execution on condition of depositing 50% of decretal amount within two months
- 2026: Civil Revision Petition filed under Article 227 challenging the deposit condition as disproportionate
Relief Sought
The petitioner sought modification of the stay condition, requesting reduction of the deposit requirement from 50% to 20% of the decretal amount, or alternatively, a fixed sum of ₹2,00,000/-, citing his limited income and inability to raise the higher sum without severe hardship.
The Legal Issue
The central question was whether Section 51 of the Code of Civil Procedure and judicial discretion under Article 227 permit courts to impose a uniform 50% deposit condition for stay of execution, or whether such conditions must be calibrated to the financial capacity of the judgment debtor to avoid undue hardship.
Arguments Presented
For the Petitioner
Learned counsel relied on Smt. S. Vijaya Lakshmi v. S. Ramesh and K. Srinivas v. K. Srinivasa Rao to argue that courts must consider the petitioner’s income, assets, and livelihood when imposing deposit conditions. He emphasized that the petitioner is a salaried employee with no liquid assets, and that a 50% deposit would effectively deny him access to appellate remedies, violating the principle of proportionality and access to justice.
For the Respondent
The respondent contended that the 50% deposit was a standard condition under settled practice to prevent frivolous appeals and ensure the decree-holder’s interest is protected. He cited Rajesh Kumar v. Smt. Sunita Devi to argue that deposit conditions are not punitive but protective, and that reducing the amount would risk dissipation of assets.
The Court's Analysis
The Court rejected the notion that a fixed percentage is a default rule for stay conditions. It held that while protecting the decree-holder’s rights is legitimate, the principle of equity under Article 227 demands that conditions be tailored to the individual circumstances of the petitioner. The Court observed that rigid adherence to 50% without assessing financial capacity transforms a procedural safeguard into a substantive barrier to justice.
"The purpose of imposing a deposit condition is not to penalize the appellant but to ensure that the decree-holder is not left without recourse if the appeal fails. However, this objective cannot be achieved by imposing a condition that renders the appeal itself inaccessible."
The Court distinguished cases where parties were business entities with substantial assets, noting that the petitioner’s employment status and lack of liquid assets rendered the 50% condition manifestly unreasonable. It further held that a fixed sum of ₹2,00,000/-, while less than 50%, still provided adequate security to the respondent, as it represented a substantial portion of the decretal amount and was within the petitioner’s capacity to raise through savings or loans.
The Verdict
The petitioner succeeded. The Court held that deposit conditions for stay of execution must reflect the financial capacity of the judgment debtor, and modified the order to require a fixed deposit of ₹2,00,000/- within one month, failing which the stay shall stand vacated. No costs were awarded.
What This Means For Similar Cases
Deposit Conditions Must Be Proportionate
- Practitioners must now file affidavits of income, assets, and liabilities when seeking reduction of deposit conditions
- Courts cannot rely on mechanical percentages; each case requires individualized assessment
- A 50% rule is not binding precedent - it is merely a starting point for equitable consideration
Financial Hardship Is a Valid Ground for Relief
- Salaried individuals, daily wage earners, and small business owners are entitled to relief from disproportionate deposit demands
- Courts must consider alternative security (e.g., third-party guarantees, property bonds) where cash deposits are unfeasible
- Failure to consider financial capacity may render the stay condition violative of Article 14 and Article 21
Execution Stay Is Not a Penalty
- The primary purpose of a deposit condition is to preserve the status quo, not to punish the appellant
- Lower courts must record reasons for the chosen percentage or amount, ensuring transparency and accountability
- Appellate courts should intervene under Article 227 where conditions effectively nullify the right to appeal
