Ravani, J.
1. In the annals of history, it is difficult to discover dictator, a feudal lord or a monarch, who openly discarded ' public interest ' and asserted his legal right to rule the people and consider 'public interest' as irrelevant. Even military dictators, while exploiting the people and inflicting miseries on them, cover their faces by the veil of 'Public interest' But in a democracy wedded to the welfare of the people and where the Constitution of the country has promised the people establishment of an egalitarian society based on socialistic principles, a nationalised bank (which is 'State' within the meaning of article 12 of the Constitution) asserts through its senior counsel (Mr. M. S. Sanghvi) that the bank is under no legal obligation to take into consideration 'public interest' while executing a money decree and, therefore, it shall disregard the same. Shocking as it is, this is the stand of the bank and not a mere legal point raised by an attorney of the bank. Therefore, while complementing the bank for being candid in its stand, we do feel dismayed and pose a question to ourselves:
'It the State disregards 'public interest', can the goal of establishment of a socialist society be anything but a mirage - a beautiful dream always reading in the background and incapable of being realised? '
2. There fore, further question arise:
(1) Why and to achieve which purpose is such a stance adopted by the bank?
(2) Whose interests are sought to be served by disregarding the public interest?
(3) should the court become an instrument in the hands of the bank and accord its approval to the action and steps taken by the bank which are against public interest and which tend to serve the private interest of certain individuals?
3. The history of the litigation reveals that the State of Gujarat (applicant herein) wanted to assist an undertaking known as Ahmedabad jupiter Spg., Wvg. and Mfg. Co. Ltd. the original defendant No. 1 (hereinafter referred to as ' the mill company'). Probably with a view to see that the unemployment problem is not accentuated, the State of Gujarat stood as guarantor of the mill company for an amount of Rs. 55 lakhs (Rs. 35 lakhs and Rs. 20 lakhs on two different occasions). The guarantee was for a limited period of five years. The Central Bank of India (respondent no. 1 and original plaintiff) also extended its help to the mill company mainly wit a view to extricate it out of a difficult situation. The Central Bank of India (hereinafter referred to as 'the bank') stood nationalised as per the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (hereinafter referred to as 'the Banking companies Act'). Both the State Government and the bank were acting in the best interest of the public. But, at the stage of execution of the decree obtained by the bank it has adopted a hypertechnical stand which, according to the bank is based on the provisions of Order 41, rule 5 of the Civil Procedure Code, 1908 (hereinafter referred to as 'the Code of 1908'). The bank asserts that since it is easier for it to realise the decretal dues from the state government and other public authorities and sine there is no legal impediment in pursuing the state Government first for the realisation of its dues, it would not be guided by considerations of public interest, in such matters, according to the bank, it has a free choice and the law permits the bank to take such a course.
4. Let us have a quick look at the facts. The bank had advanced a huge amount to the mill company. The advances were made before it was closed some time in June, 1971. When the mill company was taken over by the National Textile corporation on October 10, 1971, the outstanding amount which remained due against it was to the tune of Rs. 2,83,76,463.93 (rupees two crores, eighty-three lakhs, seventy-six thousand four hundred and sixty-three and paise ninety-three only). Thereafter, the mill company was declared as a ' relief undertaking' under the provisions of the Bombay Relief Undertaking (special Provisions) Act, 1958, for a short period which was extended from time to time up to October, 1974. On September 21, 1974, the ordinance regarding sick textile undertakings came into force which later on took the shape of the Sick Textile undertakings (Nationalisation) Act, 1974. Thus, the mill company came under the management of the National Textile Corporation.
5. On April 11, 1977, the bank filed a suit for recovery of Rs. 3,94,72,939.63 which remained outstanding against the mill company. (The principal amount was Rs. 3,78,01,297.55 and the rest of the amount represented interest which had accrued from January 1, 1977, to April 4, 1977, calculated at the rate of 15.5 and 16.5 per cent. In the suit, the mill company was joined as a defendant and other private individuals who were erstwhile directors of the mill company and who had stood as guarantors for the dues of the bank were also joined as defendants. Other defendants were the National Textile Corporation, New Delhi, State of Gujarat and the National Textile corporation (Gujarat). After recording evidence and after trial, ultimately on October 29, 1982, the city Civil Court, Ahmedabad, decreed the suit in its entirety against the mill company, private individuals, i.e., the erstwhile directors and others who had stood as guarantors for the dues of the bank and against the National Textile Corporation. However, the decree against the State of Gujarat (applicant herein) was passed to the extent of Rs. 59,69,422.50. One important feature of the decree to be noted is that the trial court directed the defendants to pay the aforesaid amount to the plaintiff-bank together with interest at the rate of 6% per annum from the date of the suit till realisation thereof by the plaintiff. The judgment and decree was signed by the learned City Civil Judge on January 18, 1983.
6. The mill company and most of the erstwhile directors and guarantors, i.e., private individuals against whom full decree has been passed by the trial court did not file an appeal Thus, they have accepted the judgment and decree passed by the trial court. The National Textile Corporation (New Delhi) and the National Textile corporation (Gujarat) have preferred appeals and they are pending The State of Gujarat also filed an appeal, being first Appeal No. 1993 of 1983 on April 18, 1983, which came up for preliminary hearing on March 15, 1984, on the same day it was admitted. The present application has been filed in this first appeal on March 22, 1984. The application appears to have remained under officer objection for a considerably ling time. Ultimately, on removal of office objections, the application has been numbered as civil Application No. 953 of 1985. It does not appear clear as to whether the application had come up for hearing on any earlier occasion except on March 22, 1985, when the present Bench was hearing first appeals and other miscellaneous matters. The application was heard on March 29, 1985. On that day, partly because the court was pressed with other work and the sitting was coming to an end very soon and partly because the counsel for the bank requested that the bank be given some time to show that the bank was sincere enough to take genuine and effective steps for recovering its dues from the private individual judgment-debtors, the matter was adjourned. During the course of hearing, the court had made it expressly clear that in the facts and circumstances of the case the court was inclined to stay the execution of the decree against the appellant, the State of Gujarat (and for that matter against any other public authority) unless the bank showed that it had taken sincere, genuine and effective steps to recover the decretal amount from individual judgment-debtors. Hence, the aforesaid request by counsel for the bank. This happened in open court when the officers of the bank were also present.
7. This is how from March 29, 1985, onwards this matter remained pending. Unfortunately, thereafter we could not assemble,. However, the bank filed civil Application No. 870 of 1986 in the officer of the high Court on January 21, 1986. By this application, the bank sought permission to place on record an affidavit dated January 23, 1986, sworn by one Mr. C. J. Shah, chief manager of the bank. Nobody drew out attention to this application till March 17, 1986. When it was brought to our notice, we passed an order directing the same to be placed before the Court on March 21, 1986. at 2.45 p.m. along with the main matter, i.e., the present civil application. On March 21, 1986, both the applications were placed before us and we found that on earlier dates the hearing had proceeded on the assumption that rule had already been issued in the application. The court as well as both the sides had proceeded on this footing. Since the necessary formalities were required to be completed, we passed the following order on March 21, 1986:
'Rule to respondent No, 1 original plaintiff. Mr. N. J. Mehta waives service on behalf of respondent No. 1 Stay of execution of decree passed in Civil Suit No. 1169 of 1977 of the City Civil Court Ahmedabad, against the appellant State of Gujarat till further orders. S.O. to March 28, 1986 at 2.45 p.m.
8. On March 29, 1986 the matter was placed for hearing and at the request of the counsel for the bank (Mr. N. J. Mehta), we permitted senior counsel for the Mr. M. S. Sanghvi to address us. We have noted the contentions raised by the senior counsel as well as by council Mr. N. J. Mehta, who had made elaborate submission on earlier occasions. Thereafter, till today we could not assemble and deliver our order because both of us were assigned court work in tow different Division Benches and also due to personal circumstances of one of us (A. P. Ravani J.), it was almost impossible to deliver the order.
9. By Civil Application No. 870 of 1986 the bank has sought permission to take on record the affidavit dated January 23, 1986. The application is hereby allowed and the affidavit is ordered to be taken on record of Civil Application No. 953 of 1985.
10. As stated in para 6 hereinabove, on March 29, 1985 the matter was adjourned sine die. Immediately thereafter within a week i.e. on April 2, 1985 (this date is taken as per the statement made at the Bar), the bank filed an execution application being Execution Application No. 240 of 1985 in the City Civil Court Ahmedabad for execution of the decree and sought execution against the state of Gujarat (and not against private individual judgment debtors). Hence, the State of Gujarat filled an application being Civil Application No. 880 of 1986 on March 10, 1986, and, inter alia, prayed for stay of further proceedings of the execution application. In this application, the bank filed affidavit-in-reply dated March 21, 1986, and also a detailed affidavit sworn by one Mr. M. R. Goel chief manager of the bank. This application filed by the State as been disposed of as per our order dated March 21, 1986, which reds as follows
'In view of the order passed to day on civil Application no. 953 of 1985, the applicant-state of Gujarat does not press this application at this stage. Hence rejected as having not been pressed. '
11. It may be noted that the further affidavit dated March 28, 1986 sworn by Mr. M. R. Goel, chief manager of the bank has been tagged on with the record of this civil application. By consent of the parties, this affidavit is ordered to be read as a part of the record of civil Application No. 953 of 1985.
12. Now, let the contentions of the bank be examined. It is contended that in view of the decision of the Bombay High court in the case of Dhunjibhoy Cowasji Umrigar v. Lisboa, ILR 1988 13 Bom 241, on stay of execution of the decree should be granted by the court inasmuch as the decree under execution is a money decree. It is further submitted that there is a rule of practice that execution of money decree is ordinarily not stayed unless the judgment debtor deposits the amount in court. In Dhunjibhoy's case, the Bombay High court as held that (headnote) :
'A party appealing against decree, which directs him to pay money, may obtain stay of execution of decree, so far as it directs payment on his lodging the amount in court, unless the other party gives security for the repayment of the money in the event of the decree being reversed, if such security be given by the successful party, then stay of execution should not be granted. '
13. Here it is contended that the court should not stay the execution of the decree.
14. Then contention so raised cannot be accepted. Dhunjibhoy's case ILR [1888] 13 Bom 241 was decided by the Bombay High court on August 31, 1888, under the provisions of the Civil Procedure Code, 1882. In that Code, there was no provision similar to Order 41, rule 5 of the Civil Procedure Code, 1908. There fore, the order must be taken to have been passed by the court in exercise of its inherent powers. On the other hand the facts ad circumstances of the present case are governed by the provisions of the Civil Procedure Code, 1908, wherein there is an express provision regarding grant or refusal of stay of execution of decree hence it is not permissible to the curt to have recourse to the inherent power of the court. This distinction makes a would of difference between the two situations. Therefore, even if it were to be conceded that the Bombay High court has laid down a general proposition as is sought to be contended by counsel for the bank on the aforesaid ground aloe the decision in Dhunjibhoy's case 1988 89 ITR 13 will not be of any help while deciding the question as to whether the execution of it money decree should be stayed or not.
15. It may also be noted that in Dhunjibhoy's case [1988] 13 ITR 241, the suit was for an injunction restraining the defendant from making further reconstruction so as to interfere with the free access of light and air to certain ancient windows of the plaintiff's house. The plaintiff had obtained decree in respect of the windows and had also obtained a decree for compensation by way of damages for the injury done to the windows The decree also directed the defendant to pay the plaintiff's costs of the suit The defendant had filed an appeal and a question arose regarding the execution of the decree so far as it related to costs. In this context, i.e. where the prayer was for recovery of the amount of costs awarded by the trial court, the aforesaid observations were made by the Bombay High Court Therefore, the submission cannot be accepted that the Bombay High Court laid down a principle that in all money decrees, the defendant should be directed to deposit the decretal amount in court and then only the question of grant of stay be considered.
16. The provisions of Order 41, rule 5 of the code of Civil Procedure 1908, govern the question of grant or refusal of stay of execution of the decree the appellate court. A mere reading of the provisions makes it clear that it does not make any distinction between a money decree and other decrees. The powers of the appellate court to order stay of execution of the decree are not fettered in any way if there is 'sufficient cause' for passing such an order. Even with regard to money decrees the discretion of the court is circumscribed by the same limitations imposed under the provisions of order 41 rule 5. There is no reason why decrees for payment of money should receive a consideration different from the other decrees in the matter of stay pending appeals In suitable cases, where the court is satisfied that substantial loss may result to the applicant if no stay is granted, the court may grant stay as prayed for either with or without any condition whatsoever.
17. Mere filing of an appeal would not operate as stay of execution of decree, but the appellate court may, for 'sufficient cause' order stay of execution of decree (see Order 41, rule 5 (1) of the code of Civil Procedure 1908) The other relevant part of the rule is contained in sub-clause (3) of order 41, rule 5. As per the provisions of sub-clause (3) of Order 41, rule 5, the court has to see -
(1) whether there will be substantial loss to the party applying for stay:
(2) whether the application has been made without unreasonable delay; and
(3) whether surety has been given by the applicant for due performance of the decree.
18. Thus, the provisions of the rule are very clear and they do not make any distinction between money decrees ad other types of decrees.
19. We may have a look at the case law on this point : in the case of A. A. Khan v. Ameer khan AIR 1950 Mys 11, the High Court of Mysore has observed as follows (headnote) :
'The court can stay execution of money decrees pending appeal in such security as it deems fit in proper cases in which sufficient cause for a stay has been made out without requiring in all cases that the decree amount should be deposited in court, '
20. In the case, Movie Enterprises v. M. S. Periasamy Mudaliar AIR 1952 Mys 78, the High Court of Mysore has observed as under (headnote) :
'Order 41, rule 5, cannot be read as imposing any imposing any limitation that the decrees for payment of money should receive a consideration different from the other decrees in the matter of stay pending appeal. Therefore, there could be no restriction on the discretion of the court for staying a decree for payment of money in suitable cases where the court is satisfied that substantial loss will result to the applicant if no stay is made. In this view, it cannot be contended that a decree directing payment of money should not be stayed less the decree amount is lodged into court. '
21. The aforesaid decisions of the High Court of Mysore have been followed by the Rajasthan High court in the case of Bansidhar v. Prabhu Dayal . It may further be noted that the Rajasthan High Court has not preferred to follow the decision of the Bombay High Court in Dhunjibhoy's case ILR[1888] 13 Bom 241.
22. Similarly, the Division Bench of the Saurashtra High Court in the Case of Jamnagar Municipality v. Firm of Ramji Vashram, AIR 1960 sau 113, has in terms held that the judgment of the Bombay High court in the case of Dhunjibhoy ILR [1888] 13 Bom 241, the provisions of the Civil Procedure Code, 1882, were applicable and therein there was no provision similar to that of order 41, rule 5 of the Code of Civil Procedure, 1908.
23. Thus, on the basis of the case law, it cannot be said that as per the decision of the Bombay High Court in Dhunjibhoy's case ILR [1888] 13 Bom 241, there is an established principle of universal applicability that in all cases of money decree, the defendant should be directed to deposit the amount in court and then only the question of stay be considered.
24. Then the question is : Is there an established practice that the execution of money decree should not be stayed unless the judgment-debtor deposits the decretal amount in court and on such dopiest, the successful party be permitted to withdraw the money on furnishing security to the satisfaction of the court. We do observe that in a large number of cases where a money decree is passed, this court generally does not grant stay unless the defendant deposits the amount in court. But this appears to be a rule of prudence and not a principle of law of universal application We also believe and hold that this practice based on the rule of prudence should ordinarily be followed by appellate courts. The practice of not granting stay in money decrees except on condition that the decretal amount be deposited in the court and the successful party be permitted to withdraw the same on furnishing security to the satisfaction of the trial court appears to have been well entrenched and for good reasons The basis of this practice appears to be the judgment of the Bombay High court in Dhunjibhoy's case ILR [1888] 13 Bom 241 referred to hereinabove However, as stated hereinabove, the judgment of the Bombay High court in Dhunjibhoy's case ILR [1888] 13 Bom 241 does to lay down any principle of law of universal application. However, this judgment cannot be made applicable when there is a specific provision in the Civil Procedure Code, 1908, with regard to grant or refusal of stay of execution of the decree by the appellate court. Therefore the only question is whether the practice which is based on the rule of prudence can and should be applied to all cases of money decrees without having regard to the special facts of a particular case and wherein public interest looms large. In our opinion, this practice based on the rule of prudence cannot be applied mechanically to the present case. The very rule of prudence on which the aforesaid practice is based also required that when public interest so demands there should be exception to the ordinary rule. The powers of the appellate court to order stay of execution of the decree cannot be said to have been fettered in any way if there is sufficient cause for passing such order of stay of execution of the money decree. In such cases public interest alone would certainly be a sufficient cause which would satisfy the conditions laid down in order 41, rule 5 of the Civil Procedure code In cases where the appellate court is satisfied that public interest would suffer by execution of a decree even if it is a money decree, the appellate court has the power and discretion to grant stay without without conditions as may be necessary in the facts and circumstances of a particular case.
25. Learned counsel for the bank has also referred to the order of another division Bench (D. C. Gheewala J. and one of us is R. A. Mehta J.) in Civil Application No. 3248 of 1984. It is submitted that there also a nationalised bank had obtained a decree for the dues of a sick textile mill Himabhai mill) and the State Government had stood as guarantor and the decree against the State Government had stood as guarantor and the decree against the State of Gujarat has been passed and in the appeal (F. A. No. 1943 of 1983) against that decree, a civil application was filed by the State and in that case the division Bench has passed, the usual order of stay of the money decree, namely, stay of the decree on condition that the entire decretal amount be deposited and in fact the State Government has deposited the amount. However, it is to be noted that in that case, there were no private individuals and private judgment-debtors. Therefore, that order is not applicable in the present case. The fats are entirely and materially different. Nor was the question of public interest involved or considered.
26. Learned counsel for the bank relied upon the decision of the Supreme Court in the case of Bank of Bihar Ltd. v. Dr. Damodar Prasad : [1969]1SCR620 . In that case, the bank filed a suit against the principal debtor as well as against the guarantor. While passing the decree, the trial court directed that (at page 134) :
'...... the plaintiff-bank shall be at liberty to enforce in dues in question against defendant No. 2 only after having exhausted its remedies against defendant No. 1'.
27. The plaintiff-bank filed an appeal challenging the legality and propriety of the aforesaid direction contained in the decree itself. The High Court dismissed the appeal and the matter was carried before the Supreme Court. While deciding the matter, the Supreme Court held that under section 128 of the Indian Contract Act, save as provided in the contract, the liability of the surety is co-extensive with that of the principal debtor. The surety became thus liable to pay the entire amount. The liability of the surety was immediate. It was not deferred until the creditor exhausted his remedies against the principal debtor. Relying on these observations occurring in paragraph 3 of the judgment, learned counsel for the bank submits that the bank is free to choose any of the judgment-debtors and execute the decree obtained by it.
28. Be it noted that the question before the Supreme Court was not as to whether the execution of money decree can be stayed or not by the appellate court. The question before the Supreme Court was, as to whether any direction can be given by the court while passing decree that the decretal amount be first realised from the principal debtor and only if the principal debtor fails to satisfy the decree, then the execution against the guarantor or surety be proceeded furtherwith. In essence, the question before the Supreme Court was: 'Could the court passing decree has discretion to limit the rights of the creditor? ' In the instant case, no such question arises. In this case, the question that arises is: 'Has the State a free choice in the sphere of execution of money decree so as to disregard public interest? ' The further question is whether the phrase 'sufficient cause' occurring in Order 41, rule 5 of the Civil Procedure Code is capable of taking within its sweep considerations of public interest or has it to be construed only literally having no relation whatsoever to public interest? ' Therefore, this decision of the Supreme Court does not help the bank.
29. Moreover, the decision of the Supreme Court is required to be read in extensio and not piecemeal. In paragraph 4 of the judgment, the Supreme Court has held that (at page 135) :
'In the absence of some special equity, the surety has not right to restrain an action against him by the creditor on the ground that the principal is solvent or that the creditor may have relief against the principal in some other proceedings. '
30. Therefore, even as per the decision of the Supreme Court, in a given case where there are 'special equities', the same may be considered by the court and where the court finds that the defendant has a good case on this score, the court may restrict the right of the creditor. In this decision, all that the Supreme Court has stated is that the creditor has a free choice. The Supreme Court does not say that the public authority or any instrumentality of the Government which is covered by the definition of 'State' within the meaning of article 12 of the Constitution of India can exercise that 'free choice' arbitrarily and in total disregard of public interest or against public interest or against public interest. Thus, it is clear that this decision of the Supreme Court does not help the bank
31. Learned counsel for the bank has also relied upon another decision of the Supreme Court in the case of the State Bank of India v. Saksaria Sugar Mills Ltd. [1986] 59 Comp Cas 861 (SC). We do not see how this decision is relevant as far as the point at issue is concerned. Therein, the question was with regard to the effect of a notification issued by the Central Government under the provisions of the Sugar Undertaking (Taking Over of Management) Act (49 of 1978). The question before the Supreme Court was whether the trial of the suit filed by the State Bank of India against the sugar company and its guarantors should be stayed or not. It was clearly stated in the notification that it did not apply to secured liabilities due to banks and financial institutions. Hence, the Supreme Court held that the suit could not be stayed. Incidentally, the Supreme Court has referred to case of Bank of Bihar [1969] 39 Comp Cas 133 (SC) and has observed that in view of the provisions of section 128 of the Contract Act, the liability of the surety is co-extensive with that of the principal debtor. This is not the point at issue. The question is : Has the bank (or any public authority which is an instrumentality of the Government and is 'State') free choice in matters of execution of a decree and can such free choice be exercised in total disregard of, or even against, public interest? In this view of the matter also, this decision of the Supreme Court does not help the bank.
32. When execution of a decree is stayed, all that the court does is that it refuses to extend its help to the execution of the decree. If the 'State' refuses to take into consideration 'public interest ', the court cannot be oblivious of its own duty. In such circumstances, the court can certainly refuse to help and must decline to put in motion its executing machinery.
33. Learned counsel for the respondent-bank has relied upon the following decisions :
(1) Anandiprasad v. Govinda Babu , (2) Fakira Mandaji Marathe v. Mt. Rumsakhibai AIR 1946 Nag 428 and (3) N. C. Iuanna v. N. Channamma, AIR 1967 Mys 209.
34. In substance, the decisions say that while deciding the question of stay of execution of decree under the provision of Order 41, rule 5 of the Code, the court should be satisfied regarding the substantial loss to the party applying for stay. Thus, over and above the presence of 'sufficient cause' for stay of the decree, the factors regarding substantial loss and/or irreparable loss should also be present to the satisfaction of the court.
35. There is no dispute with the principles stated in the aforesaid decisions. On the contrary, as we have stated in paragraph 15 hereinabove, all the three aspects indicated in clause (3) of Order 41, rule 5 of the Code together with the 'sufficient cause' contained in clause (1) of Order 41, rule 5, are required to be taken into consideration by the appellate court while granting or refusing stay. Hence, this aspect does not require to be repeated.
36. It may be noted that it is not he contention of he bank that if the execution against the State Government and other public authorities which are guarantors is deferred for the time being, and in the first instance, if the private judgment debtors are pursued, public interest would not be served. The stand of the bank is that it is easier to realise the money by pursuing State Government and since the law does not enjoin a duty upon it to take into account public interest, it would not defer the execution against the State Government. This stand is patently erroneous and absurd. In order to understand why it is imperative for the bank to be guided by public interest, it is necessary to refer to some of the provisions of the Banking companies Act. By this Act, the existing banks, meaning thereby, the banks specified in column 1 of Schedule I to the Act, came to be nationalised. The respondent-bank is one of the scheduled banks which stood nationalised as per the provision of the Banking Companies Act. If one analyses the preamble to this Act, it is very clear that the banking companies including the respondent-bank have been nationalized with a view -
1. to control the heights of the economy,
2. to meet progressively the needs of development of the economy,
3. to serve better the needs of development of the economy, and
4. to perform the acts, stated in points Nos. (2) and (3) hereinabove, in conformity with the national policy and objectives and matters concerned therewith or incidental thereto.
37. As per the provisions of sub-section (3) of section 3 of the Banking Companies Act, the entire capital of each corresponding new bank stood vested in and allotted to the Central Government. Thus, as per this provision, the entire capital of the respondent-bank also vests in the Central Government. The cumulative effect of sections 3, 4, 11, and 14 of the Banking Companies Act is that the nationalized bank can be treated as a Government company for the purposes of section 617 of the Companies Act, 1956. It may also be noted that in view of this statutory provision, an employee of such bank is a 'public servant' as defined under section 21(12)(b) of the Indian Penal Code.
38. Prior to independence, the banking companies were being governed by the provisions in the Indian Companies Act, 1913. Later on, the banking companies of the Banking Regulation Act, 1949. The new legislation was necessary in view of the fast changing socio-economic scenario of the country. This legislation also was not sufficient to meet the requirements of the developing economy and hence the introduction of 'social control' by enacting the Banking Laws (Amendment) Act, 1968. This also failed to achieve the object and hence the nationalization of banks.
39. After the nationalization of banks, the banking companies and in particular respondent No. 1 ceased to be a mere commercial undertaking. It was required to fulfill the twin object of achieving the necessary commercial efficiency as well as serving the national interest. Without serving national interest, no nationalized bank can legitimately claim any right to exist. National interest, in the context, would and should mean 'public interest'. Even so, we fail to understand that after the enactment of the Banking Companies Act and after its implementation with full vigor and even after the introduction of the word 'socialist'in the preamble to the Constitution in the year 1976, the management of the bank refuses to take into consideration 'public interest' while executing a decree wherein corers of rupees are involved.
40. Now, let us examine whether public interest can be taken into consideration while interpreting the phrase 'sufficient cause' occurring in Order 41, rule 5 of the Code of Civil Procedure, 1908. But what does 'public interest' mean In Black's Law Dictionary, fifth edition, it is stated:
'Something in which the public, the community at large, has some pecuniary interest, or some interest by which their legal rights or liabilities are affected... Interest shared by citizens in affairs of local, State or national Government. '
41. It is further stated :
'The circumstances which clothe a particular kind of business with 'public interest', as to be object to regulation, must be such as to create a peculiarly close relation between the public and those engaged in it and raise implications of an affirmative obligation on their part to be reasonable in dealing with the public'.
42. The entire nation has interest in all the banks which are nationalized. The entire capital of the banks vests in the Central Government. Every citizen has a share and interest in the capital of the bank. By virtue of the provisions of the Constitution and having regard to the object underlying the nationalization of the banks, all the nationalized banks have a corresponding obligation to perform all their duties and functions in the best interest of the nation, i.e., in the best interest of the public.
43. In the light of the history of the banking legislation and the concept of 'public interest' as narrated hereinabove and the object with which the banking companies have been nationalized, it is difficult to hold that any vital decision or action can be taken by a nationalized bank by disregarding public interest. In other words, public interest can be said to be the very oxygen by which it gets life and sustains its existence. It may be noted that with the enactment of the Act, the bank ceased to be an ordinary company. The role of the bank as a powerful instrument for the rapid socio-economic development of the country has been recognized by Parliament. The bank as well as its employees have a duty towards the entire nation. That is why the employees of the bank have the protection of Chapter III of the Constitution with regard to the terms and condition of their employment. The employees of the bank including the top officers of the bank enjoy privileges almost skin to those of civil servants. Yet this very management and officers say, 'privileges all right, we will enjoy the same, but we shall not aside by the considerations of public interest'. This, they are saying as a relic of bygone days and the attitude smacks of private sector management where the philosophy of laissez-faire and the company being considered as a unit of the ownership of shareholders had its full sway. We are constrained to make this observation because such is the stand of the bank and it is not a mere legal argument. In response to our specific query in this connection, learned senior counsel of the bank has made this position clear.
44. However, the times have changed. Even in the private corporate sector, the old notion of the company as a separate entity owned by shareholders and having a free choice to act as it liked has undergone a National Textile Workers' Union v. P. R. Ramakrishnan : (1983)ILLJ45SC . In the para 4 of the judgment, after referring to the developments in this country, i.e. the adoption of a socialist pattern of society, and adoption of the Constitution and particularly Parts II and IV of the Constitution, the Supreme Court has observed (at page 196) :
'But, one thing is certain that the old nineteenth century view which regarded a company merely as a legal device adopted by shareholders for carrying on trade or business as proprietors has been discarded and a company is now looked upon as a socio-economic institution wielding economic power and influence the life of the people. '
45. In para 5 if the judgment, it is further observed (at page 196) :
'A company, according to the new socio-economic thinking, is a social institution having duties and responsibilities towards the community in which it functions. '
46. Again, after referring to the modern trend in foreign countries, the Supreme Court has in terms observed:
'That the company should be guided by considerations of national economy and progress. '
47. Regarding approach of the courts, the Supreme Court has observed (at page 205) :
'Law must, therefore, constantly be on the move adopting itself to the fast-changing society and not lag behind. It must shake off the inhibiting legacy of its colonial past and assume a dynamic role in the process of social transformation. '
48. In the background of this socio-economic scenario and the principles of law declared by the Supreme Court, the question as to whether an instrumentality of 'the State' can disregard 'public interest', has got to be examined.
49. Even private companies are not free to act in any manner they like. They are also required to be guided by the considerations of national economy and progress. Therefore, it is inconceivable that a nationalized bank which is an instrumentality of the Government and which is capable of wielding powerful weapons for the purpose of the transformation of socio- economic structure of the society, can act without taking into account 'public interest'. Even so, if the bank were to take action which is legal but is in total disregard of public interest, then the question would arise: 'Can the court say that it shall not extend its help to the bank because it has disregarded the public interest '
50. Exactly similar question arose before this court in the case of Wood Polymer Ltd., In re and Bengal Hotels P. Ltd. [1977] 47 Comp Cas 597. In that case, a scheme of amalgamation of companies was produced before the court. All the necessary legal formalities were complied with. But the court could receive that the only purpose of amalgamation of the companies was to transfer capital asset and escape tax on capital gains. The question was : When all the legal formalities were completed, could the court say that having regard to the public interest, it would not sanction the scheme The court (Deadest J., as he then was) held that since the sole purpose of amalgamation was to avoid tax on capital gains (mark 'avoid' and not 'evade'), the court refused to grant its sanction. The court held that public interest looms large and the machinery of judicial process was sought to be utilized for defeating public interest and hence the court refused to accord its sanction to the scheme of amalgamation of companies. This decision has been approvingly referred to by the Supreme Court in the case of McDowell and Co. Ltd. v. CTO : [1985]154ITR148(SC) .
51. Hence, the term 'sufficient cause' occurring in Order 41, rule 5 of the Code has got to be interpreted and understood in the light of the aforesaid discussion. After all, what is 'sufficient'? One may again turn to Black's Law Dictionary. 'Sufficient' means 'adequate enough as much a may be necessary equal or fit for end proposed and that which may be necessary to accomplish an object'. In the facts and circumstances of the case, what is an object or what should be an object? The object should be to serve public interest and public interest can be served by which methods. The sufficiency or otherwise of the cause is to be determined by applying this test. On the other hand, as far as the court is concerned, public interest can best be served by refusing to assist the plaintiff whose duty it is to serve public interest and yet it says that it shall disregard public interest and shall stick to its legal right of free choice. If this be the attitude of the plaintiff, it is not obligatory upon the court to give its accord to such an action and the court would be well within its rights in saying that the machinery of the judicial process shall not be available to such a plaintiff. By granting stay of execution of the decree, after all, what does the court do? The court only refuses to assist the plaintiff in executing the decree. The court does not do anything further.
52. As far as the bank is concerned, public interest cannot be served best by adopting an easy course for realizing its decretal dues. As stated hereinabove, it has to keep in mind the socio-economic interests of the entire nation. It cannot decide the course of its actions by choosing the line of least resistance. We will discuss a little later as to how it would be in the interest of the entire society if the decree is executed first against the private judgment debtors. Moreover, the contention based on the 'line of least resistance' is fright with danger and if allowed to be pursued by public authorities, it would do more harm to the public institution concerned and to the society at large.
53. In circumstances where an instrumentality of the Government, that is to say, the State itself, comes foreword and tells the court that it wishes to disregard public interest and because it is an easier course to proceed against other public authorities, it would lime to adopt such easier course, the court can very well say that it shall not be oblivious of its own duty and shall not disregard public interest. On the contrary, it is the duty of the court to see that before it lends its assistance to such a plaintiff, the court must ask a question to itself: Will public interest be served by assisting the plaintiff? It not, even though the action of the plaintiff rather it would be duty bound, to easy that the assistance of judicial process will not be made available to such a plaintiff. One may go to the extent of the saying that in such circumstances, if the court helps such a which will be the last thing which can be expected of a court functioning under the Constitution which has promised the people of the country to establish an egalitarian society based on socialist principles.
54. Now, let us see how public interest will be served better by refusing to assist the plaintiff in execution of the decree against the State Government or for that matter, against many other public authority which would be covered by the definition of 'State' occurring in article 12 of the Constitution. If the stay is not granted and the plaintiff is allowed to execute the decree against the State Government or against any other public authority, such public authority or the State will again be forced to take steps for recovering the amount from the principal debtors. This again will lead to further litigation. Multiplicity of litigation is certainly not in public interest. Litigation by public authorities and the State is always at the cost of public money. Whenever it is possible to prevent such litigation, it should be the duty of the court to see that such litigation is prevented and loss to the public exchequer is avoided. Therefore, we feel that the decree passed against the State of Gujarat cannot be permitted to be executed at this stage.
55. As per the provisions of the section 34 of the Civil Procedure Code, the trial court, while passing the decree, could have awarded an agreed rate of interest (i.e., 15% or 16 1/2%) till the date of realisation. But the trial court has directed the defendants to pay the decretal dues together with interest at the rate of 6% per annum. For reasons which cannot be explained or understood, without drawing adverse inference, the bank has not filed cross-objections against this part of the decree. Therefore, the resultant effect is that ultimately when the private judgment debtors are required to pay the decretal dues, they will pay this amount together with interest at the rate of 6% per annum and not at 15 or 16 1/2% which was the agreed rate of interest. This means a net gains of interest calculated at the rate of 9 to 10 1/2% which again means a net gain of bout Rs. 35 to 36 lakhs every year to the private judgment debtors. It does not require any commercial expertise or high banking skill to understand that every day's delay in execution of the decree against private judgment debtors from whom the money should be ultimately released by the State Government or other public authorities, would be to their benefit to the extent of lakhs of rupees every month. Are we to understand that the top officers of the bank who took the decision not to file cross-objections against this part of the decree and who appear to be interested in deferring the execution against the private judgment debtors, are incapable of understanding this simple arithmetic? This colossal loss will be ultimately suffered by the society. Therefore, it is clear that the longer the delay in execution of the decree against the private judgment debtors, the grater will be the loss to the society and there will be more damage to public interest to that extent. Calculating in terms of difference of interest of about Rs. 15,000 (fifteen thousand) per day. Why? Because the management and top officers of the bank prefer to adopt the line of least resistance? It is difficult to agree with this logic.
56. It may be further be noted that if the bank proceeds against private individual judgment-debtors and realizes its decretal dues, the position would be that those who were primarily responsible for the loss and who would be that those who were primarily accountable to the society would be pursued and would be made to discharge the ill-gotten money which they have been able to retain with them for such a long time. Moreover, they will not stand to gain further on account of the difference in rate of interest and the recurring loss to the society to the extent of more than Rs. 15,000 (rupees fifteen thousand) per day will be permanently prevented. Further, the State or other public authorities (which are noting but 'the society') will be saved from the pangs of litigation and the society at large will be also be saved from further cost of litigation. Thus, delay also will be minimized and the social cost will be reduced. These are certainly considerations which must weigh with the court and, therefore, there is sufficient cause for stay of execution of the decree.
57. Over and above the consideration of 'sufficient cause', if one looks at clause (3) of Order 41, rule 5 of the Civil Procedure Code, there are other considerations also which must weigh with the court. Counsel for the bank has harped on these factors and, by citing certain authorities which have been referred to hereinabove, has tried to make out a case that there will be no substantial loss to the applicant-State, if stay is not granted Further, he has submitted that there was unreasonable delay in making the application and unless the money is deposited, there is no security for the satisfaction of decree. Therefore, according to him, the court should not grant stay.
58. As far as substantial loss to the applicant is concerned, there is no merit in the submission. At this stage, the State Government cannot be deprived of its money. The private individual judgment debtors are primarily responsible for the debt due to the bank and probably on account of their mismanagement, the debacle of the undertaking was brought about. The State of Gujarat entered the scene solely with a view to help the undertaking and see that the employment potential is not reduced and further unemployment is not generated. In such circumstances, if the applicant State is pursued first, the society at large will be put to substantial loss. In such cases, the courts must be guided by a macro view of the matter and should not be guided by narrow considerations stemming from a micro view. Therefore, this conditions is also sufficiently complied with in this case.
59. Now, take the case of unreasonable delay. In the facts and circumstances of the case, we venture to say that this submission does not lie in the month of the Bank. The decree was passed on October 29, 1982 and it was signed by the learned City Civil Court Judge on January 18, 1983. The applicant-State Government filed appeal on April 19, 1983, and the appeal was admitted on March 15, 1984. The application praying for stay of the execution of the decree was filed by the State Government on March 22, 1984, which ultimately became ready some time in the year 1985. Till this date or thereabout, the bank had not even obtained the certified copy of the judgment and decree. The bank obtained the certified copy of the judgment and decree on March 26, 1985. Whether delay on the part of the applicant or for that matter on the part of any party is reasonable or unreasonable has got to be understood in the context of the facts and circumstances of each case. Be it noted that it was because the court pestered the bank, the bank was rather obliged to move its machinery and rush for getting the certified copy of the judgment and decree in March, 1985. On the other hand, the State Government and filed the application for stay of the decree as far back as in March, 1984.
60. At this stage, it is stated at the Bar that at an earlier point of time, i.e. in September, 1983, the bank had obtained a certified copy of the judgment and decree, but that was sent to the solicitors of the bank and they in turn had sent the same to the central office of the bank at Bombay. This is still worse. Despite the knowledge of the central office of the bank, the execution application was not filed against any of the judgment debtors. Till the application for stay of the execution of the decree came up for hearing (on March 22, 1985), the bank had not even filed the execution application against any of the defendants. The execution application was filed only on April 2, 1985, and that too after this court put certain uncomfortable queries to counsel for the bank. In these facts and circumstances of the case, it can never be said that there was unreasonable delay on the part of the applicant in approaching the court and praying for stay of execution of the decree.
61. As far as the security is concerned, one must not forget that the applicant is the State of Gujarat. In such types of cases, the mere statement of counsel representation the Government that the money shall be returned or paid to the plaintiff or deposited in court as and when the court directs, should be considered sufficient. This is the practice which is being followed by this court. However, in the peculiar facts and circumstances of the case, we are going to insist that an undertaking be filed by an appropriate officer of the State Government. It shall be stated in the undertaking that within one month from the date of receipt of intimation of the direction given by the court, the Government shall deposit the amount in court. This should be considered sufficient to safeguard the interest of the bank. Therefore, in the facts and circumstances of the case, this aspect of security also does not assume much significance and on that count, the stay cannot be refused.
62. The contention that the bank has chosen to execute the decree against the State Government and other public authorities first because it is easier to realise the money, also has no merit. On the contrary, it appears that this so-called line of least resistance is adopted with a view to shield the private judgment-debtors. In the affidavit-in-reply dated March 29, 1985, sworn by one Shri P. H. Padalia, it is, inter alia, stated that there was no likehood of recovering more than Rs. 2 crores from the private respondents looking to the financial data available with the bank. Then the question arises: Who prevented the bank from proceeding further against these private judgment-debtors and realise an amount of Rs. 2 crores from them? Many of the private judgment-debtors have not even filed appeals and in the appeals filed by some of them, there is no stay order. The extent to which the decretal dues may be realized from the private judgment-debtors would reduce the liability of the State Government and other authorities. To that extent the decree would stand satisfied. In the instant case, as far as the State Government is concerned, the entire decree would have stood satisfied.
63. The subsequent affidavit in reply dated January 23, 1986, sworn by one Shri C. J. Shah, chief manager of the bank, shows that the property of the private judgment debtors was not worth more than Rs. 50 lakhs. Later on, in the affidavit-in-reply dated March 28, 1986, sworn by one Shri M. R. Goel, chief manager of the bank, it is stated that one individual judgment debtor, Shri Arvind C. Parikh, had property to the tune not know what was the date of this valuation. But it is strange that with the passage of time, as per different affidavit, the worth of the property of the private judgment debtors has gone on dwindling. This is the either a case of distortion and mutilation of facts or a clear case of helping the private judgment debtors by allowing time to pass so that they can transfer their property safely and keep the same from being attached and sold for the satisfaction of the decretal dues.
64. The judgment and decree were passed by the trial court on October 29, 1982. The bank did not file the execution application till April 2, 1985. This action had to be taken by the bank because, during the course of hearing of this application, the court had pestered the bank to take appropriate action for realization of the decretal dues. It is clear from the statement made by counsel for the bank that in September, 1983, the bank had obtained a certified copy of the decree and had sent it to its solicitors, and who, in turn, had sent the same to the central office of the bank at Bombay. Then why this inordinately in filing the execution application? Was it under the advice of the solicitors? If the solicitors suggested that way, was there any obligation on the part of the officers of the bank to accept much advice? The bank knew that there was a wide gap between the agreed rate of interest (15 to 16 1/2%) and the rate of the interest awarded (6%). One may here pose the question : Had the top officers of the bank obtained the decree in their individual capacity and were they to realize that the amount by execution the decree, would they have gone for advice of the solicitors and in case the solicitors advised them not to execute the decree, would they have adhered to such advice In the absence of the entire correspondence exchanged between the solicitors and the bank, it is difficult to say that the solicitors of the bank had advised to the effect that the bank should not proceed further with the execution. Even assuming that the solicitors did advice accordingly, the officers of the bank are not absolved from their responsibility. In the interest of the bank, they ought to have disregarded such advice which was purely against the interest of the bank.
65. On March 29, 1985, the court had heard learned counsel for the bank (Mr. N. M. Mehta) and thereafter adjourned the matter. As stated in para 6 hereinabove, the matter was adjourned partly on account of the request made by counsel for the bank, so as to enable the bank to take sincere, genuine and effective steps to recover the decretal dues from the individual judgment debtors. At that time, the court had made it expressly clear that it was inclined to grant the stay. Mr. Mehta orally stated that on an earlier occasion, he had made a proposal on behalf of the bank and the court had rejected the proposal by not granting the stay of execution of the decree. Therefore, in his understanding and submission, the bank was free to execute the decree even against the State Government. Therefore, according to him, the bank proceeded to execute the decree against the State Government on April 2, 1985, i.e., immediately after the matter was adjourned sine die. We felt that Mr. Mehta was shifting his stand and, therefore, we requested him to make his submission in writing as regards the proposal of the bank and his understanding. On April 21, 1986, he has produced a written submission which reads as follows:
'The bank submits that at the hearings of Civil Application No. 953 of 1985 in March, 1985, no stay of execution of the decree against the Government of Gujarat was granted, but the matter was deferred for orders. Neither the Government pleader, Mr. R. M. Vin, who appeared at the hearings nor the Government in Civil Application No. 880 of 1986, have stated that the honorable court had directed the bank not to proceed with the execution of the decree against the State Government in March, 1985. The fact that the Government of Gujarat has deposited the decretal dues in the executing court without any condition fortifies this submission. '
66. The aforesaid written submission is conspicuously silent and evasive with regard to the so called proposal of the bank and his understanding and the reaction of the court. Mr. Mehta was required to clear the mist as regards the proposal made by the bank. If the proposal was to proceed against all the judgment debtors including the State Government simultaneously, then what was reaction of the court despite the fact that the court had clearly expressed its views that unless the bank takes sincere, genuine and effective steps for recovery of the amount from private judgment-debtors, it would not permit the bank to execute the decree against public authorities? On all these points, there is no clarification in the written submission. We have no doubt in our mind that the bank officers were present in the court when we expressed our views. We feel that it is only because of the fact that we had not passed any order regarding stay of execution of the decree, that the bank has tried to take under a advantage of the same and has rushed for execution of the State Government filed an application being Civil Application No. 880 of 1986, and prayed for stay of the execution of the decree, that the matter came to our knowledge. Earlier, the bank had filed an application praying that an affidavit be taken on record and in that affidavit the subsequent developments regarding the execution application having been filed was mentioned. But this application was filed in the office and it was not brought to the notice of the court. Thus, there was a deliberate attempt to keep the court in the dark. Despite enough opportunity being given, the bank has not been able to explain its conduct as to the why it rushed to execute the decree after taking time from the court on the ground that it wanted to take sincere, genuine and effective steps to recover the money form the private judgment debtors.
67. Mr. N. J. Mehta has referred to Shri R. M. Vin, the then Government Pleader. Mr. Vin had appeared at an earlier state of the hearing and he had left the court after taking our permission. In fact, he is no longer the Government Pleader now. The default, if any, on the part of the Government Pleader and the Government officers cannot change what transpired before us. The fact that the Government has deposited the decretal dues in the executing court without any condition does not fortify the submission made by Mr. Mehta. The Government appears to have deposited the amount to avoid forcible recovery of the decretal dues through the process of court. The Government immediately filed Civil Application No. 880 of 1986 and prayed for stay of execution of the decree. Details have been given hereinabove as to how and in what way the attempt of the bank to execute the decree against the State Government by keeping the court in the dark has been frustrated. We are sorry to say that the written submission made by Mr. N. J. Mehta is clearly evasive. Even as conceded by learned senior counsel, Shri M. S. Sanghvi, it is ridiculous. To say the least, the written submission made by Mr. N. J. Mehta does not in any way satisfactorily explain his own conduct and the conduct of the officers of the bank. We could have very probably passed severed strictures but we refrain ourselves from doing so by saying that this type of the conduct is not approved by the court. We hope and trust that in further no counsel for would try to shield himself or his client who has tried to take undue advantage after obtaining an order of adjournment on altogether different grounds.
68. On March 29, 1985, after hearing counsel for the bank, the court had adjourned the matter. By no stretch of reasoning, can it even be understood that the court deferred the order with a view to enable the bank to proceed against the State Government. It was just the contrary. The matter was adjourned partly with a view to enable the bank to show that it had made sincere, genuine and effective efforts to make substantial recovery from the private judgment-debtors. Still, however, the bank had kept this court in the dark and had proceeded to execute the decree against the State Government. The bank has persisted in this attempt even at a later stage when it filed the application in the office of the High Court and did not bring the same to the notice of this court. Worse still, even when we requested for a written submission, learned counsel for the bank has persisted in his attempt to mislead the court and create confusion. In fairness to counsel for the bank, it must be stated that they have not disputed the fact that the court had clearly expressed its view that it was inclined to grant stay of execution of the decree against the State Government or for that matter, against other public authorities also. In this background, a question was put to learned senior counsel, Shri M. S. Sanghvi: despite this undisputed position, would the court defer the passing of the order so that the bank could execute the decree against the State Government Shri Sanghvi could not substantiate the stand of the bank and frankly conceded that the stand taken in the written submission and produced in court was ridiculous.
69. In view of the aforesaid facts and circumstances, we do not accept the contention of the bank that it did not proceed against the private judgment debtors because it was easier for the bank to realize the decretal dues from the State Government and other public authorities. We do feel that the bank has adopted this course deliberately with a view to shield the private judgment-debtors. The bank has tried to invent causes and excuses and has projected imaginary difficulties in executing the decree against the private judgment-debtors. This is certainly commercial efficiency - per excellence, but commercial efficiency in reverse, i.e., against the interest of the bank and the society at large.
70. Here an important aspect may be noted. If public officers could exercise their 'free choice' so as to disregard public interest and pursue public authorities instead of private judgment debtors, then such a course is likely to be chosen for oblique motives (also). Private judgment debtors would be shielded and the public authorities would be pursued vigorously. If this could be legally done as is sought to be contended by the bank, a possibility cannot be ruled out wherein private individual as and public officers may join hands and perpetrate fraud on public financial institutions including the bank. Therefore, over and above the considerations, of the public interest which have been narrated hereinabove, it would be conducive to clean public administration that such a cause be not permitted by the court. At any rate, the court cannot be indifferent with regard to its obligation regarding clean public administration. Therefore, to eliminate the possibility of fraud being perpetrated and to eliminate the further possibility of making the court an instrument in the perpetration of fraud, such a cause should not be permitted to be taken by the bank and other public financial institutions. It may be noted that in this very case, with the passing of each successive day, the merely by way of difference in the rate of interest. This gain of the private judgment debtors is a loss to the bank and other public authorities, that is to say to the loss to society at large. Thus, to avoid possibilities of fraud on society at large and to prevent the court becoming an instrument in a fraudulent scheme which may be devised by private judgment-debtors in league with public officers, it is safer, rather, it is in the interest of the nation at large that in such types of decrees, the plaintiff be not helped by the court in execution of the decree against another public institution or the 'State'. Unless such plaintiff firsts proceeds against private judgment-debtors and satisfies the court regarding its bona fides.
71. Learned counsel for the bank submitted that the State Government had already deposited the amount in the executing court and, therefore, the bank had become the owner of this money and it should be permitted to withdraw the same, if necessary, by putting the bank to terms. The submission cannot be accepted. The title to the property has not passed in favour of the bank. As observed by the Supreme Court in the case of Ramanathan v. Ramanathan AIR 1986 SC 1047, when the judgment debtor deposits a sum in court, it would not amount to passing of the title to the money to the decree-holder. In view of this judgment of the Supreme Court, the submission that the title to the money has passed in favour of the bank is rejected.
72. In this case, it is clear that the bank attempted to realize the decretal dues from the State Government by keeping the court in the dark. The bank, as a matter of fact, is trying to shield the private judgment-debtors by ostensibly showing that it pursues public authorities as a line of least resistance. The bank has sought to execute the decree against the State Government after obtaining adjournment from the court. Such a device cannot and should not be countenaced by the court. Therefore, the request made by counsel for the bank to the effect that the should be permitted to withdraw the amount even putting the bank to terms cannot be accepted.
73. We hope that in the light of the discussions and observations made hereinabove, the bank will refrain from executing the decree against other public authorities, i.e.., National Textile Corporation, New Delhi and National Textile Corporation (Gujarat). We further hope and observer that before proceeding with the execution against the judgment debtors which are public authorities, the bank shall try to make sincere and genuine efforts to remove the decretal duties from the private judgment debtors. The bank should not defer the execution against the private judgment debtors on the ground that it will not be able to realize the entire decretal dues from the private judgment debtors because the extent to which the private judgment debtors satisfy the decree, the State Government and other public authorities will not be required to initiate litigation against the private judgment debtors. Thus, if the private judgment debtors are pursued first and from them the decretal dues are realized even to a smaller extent, further litigation to that extent will be eliminated. Moreover, the private judgment debtors would cease to get benefit arising out of the difference in rate of interest.
74. In the result, the application is allowed against respondent No. 1, Central Bank of India. The execution of the decree passed in Civil Suit No. 1169 of 1977 by the City Civil Court, Ahmedabad, is stayed.
75. In the facts and circumstances of the case and particularly in view of the unfair tactics adopted by respondents No. 1 bank and attempts having been made to overreach the court, it is directed that the trial court shall return the amount deposited by the State of Gujarat immediately on receipt of the writ of this court or on production of a copy of the operative portion of this order and shall report compliance to this court immediately.
76. Mr. M. C. Patel, learned Assistant Government Pleader, states and assures that the Under-Secretary to the Industries, Mines and Power Department, will file an undertaking as indicated hereinabove in this court as early as possible and in no case later than three weeks from today.
77. The direction contained hereinabove shall be implemented by the trial court immediately without waiting for the undertaking to be filed by the State of Gujarat in this court.
78. Learned senior counsel, Mr. M. S. Sanghvi, appearing for respondent No. 1 bank submitted that if the operation of this order is stayed for some time, no prejudice will be caused to the State Government and, on the bank hand, if not stayed prejudice will be caused of the respondent bank. The submission cannot be accepted. If the operation of the order passed hereinabove is stayed, the amount will remain with the trial court and not with the bank. If the amount remains with the trial court and not with the bank. If the amount remains with the trial court, the bank is not likely to get any fruits whatsoever of the amount lying in the coffers of the trial court. On the contrary, the amount will not be used for public purpose while we are sure that the Government will use concerned, it is properly safeguarded by putting a condition on the State Government that within a period of the month from the date of receipt of intimation, the Government will deposit the amount in court as and when the court gives such direction. Therefore, the question of any prejudice whatsoever being caused to the bank does not arise at all. On the contrary, if the amount of about Rs. 88 lakhs odd is allowed to remain idle in the trial court, there would be great loss to the society. Such a huge amount will remain idle' and the Government will not be in a position to use the same for some fruitful purpose. Therefore, even from the practical point of view, it is necessary that the amount belonging to the society should be put to some use and should not be allowed to remain idle. Hence, the request made by counsel for the bank is rejected.
79. However, it is clarified that it will open to the respondent bank to approach this court after taking appropriate steps for recovery of he amount from the private judgment debtors. It and when the bank shows its bona fides and shows to the court that the bank has taken genuine and substantial steps for recovery of the amount firm the private judgment debtors and if the bank approaches this court after taking such action, the court will certainly examine the question as to whether the stay should be vacated or not.
80. Rule made absolute to the extent indicated hereinabove. There shall be no order as to costs.
81. Office is directed to issue writ forthwith.