COUNFREEDISE RETAIL SERVICES LIMITED vs SSIPL LIFESTYLE PRIVATE LIMITED
- Court
- Karnataka High Court
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 8 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE K. V. ARAVIND
WRIT PETITION NO. 24777 OF 2026 (GM-CPC)
BETWEEN:
1. COUNFREEDISE RETAIL SERVICES LIMITED
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 2013
HAVING ITS OFFICE AT 51/1A2, AY
HEGGADADEVANAPURA VILLAGE,
HUSKUR ROAD, ALUR POST,
DASANAPURA HOBLI, BENGALURU,
KARNATAKA 562162
REPRESENTED BY ITS DIRECTOR
SRI ABHINANDAN M.
…PETITIONER
(BY SRI BHARATH SHETTY, ADVOCATE)
Digitally
signed by
VINUTHA B S
Location:
High Court of
Karnataka
AND:
1. SSIPL LIFESTYLE PRIVATE LIMITED
COMMUNITY CENTRE,
NEW FRIENDS COLONY,
NEW DELHI - 110025
REPRESENTED BY ITS AUTHORISED
REPRESENTATIVE
SMT. SURBHI PODDAR.
…RESPONDENT
(BY SMT. JAYNA KOTHARI, SENIOR COUNSEL FOR
SRI NAVEEN CHANDRA, ADVOCATE FOR C/R)
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASHING THE ORDER DATED 30.07.2026 IN IA NO. 2 AS PER
ANNEXURE-C1 PASSED IN COM. MISC. PET. NO. 12/2026 ON
THE FILE OF PASSED BY THE XI ADDL. CITY CIVIL AND
SESSIONS JUDGE, COMMERCIAL COURTS AT BENGALURU AS
PER ANNX-A.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL ORDER
The present petition impugns the order dated 30.07.2026
passed on I.A. No. 2, filed under Section 16 of the Commercial
Courts Act read with Order XLI Rule 5 of the Code of Civil
Procedure, 1908 (for short, ‘CPC’), seeking a stay of the
execution proceedings in Com.Ex.No.97/2026, subject to
compliance with the conditions imposed in Com.Ex.No. 97/2026
dated 07.07.2026.
2. Learned counsel for the petitioner submits that the
decree dated 12.01.2026 passed in Com.O.S.No.188/2025 was
obtained by misrepresentation, suppression of material facts
and fraud. Learned counsel further submits that, in exercise of
its inherent powers under Section 151 of the CPC, the
Commercial Court ought to have granted an unconditional stay
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of the decree, while exercising jurisdiction under Order IX Rule
13 of the CPC. Learned counsel further submits that the
petitioner has no financial means to satisfy the decree.
2.1 In support of the aforesaid submissions, learned
counsel places reliance on the judgment of the High Court of
Calcutta in Emars Mining and Construction Pvt. Ltd. v.
Majunath Hebbar, dated 13.01.2021 , and the judgment of
the Hon’ble Supreme Court in Lifestyle Equities C.V. and
Another v. Amazon Technologies Inc ., in SLP No.
19767/2025, decided on 07.10.2025. Learned counsel also
places reliance on the judgment of the Hon’ble Supreme Court
in A.V. Papayya Sastry and Others v. Govt. of A.P. and
Others, [(2007) 4 SCC 221 ].
3. Per contra, learned Senior Counsel appearing for
the respondent on caveat submits that the impugned order is in
conformity with the order dated 07.07.2026 passed by the
Commercial Court in Com. Ex. P. No. 97/2026, whereby the
decree was stayed subject to the deposit of 50% of the decretal
amount on or before 10.07.2026. Learned Senior Counsel
draws the attention of this Court to the order passed by the
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Coordinate Bench in W.P. No. 21546/2026 dated 29.07.2026,
challenging the order dated 07.07.2026 passed in Com. Ex. P.
No. 97/2026, wherein the writ petition challenging the
conditional interim order came to be dismissed.
3.1 Learned Senior Counsel further submits that the
impugned order arises from a petition filed under Order IX Rule
13 of the CPC, in which the Court cannot examine the issue of
misrepresentation. It is submitted that the allegations of
misrepresentation and fraud cannot be considered in view of
the limited scope of the proceedings under the said provision.
3.2 Learned Senior Counsel further submits that, as
observed by the Coordinate Bench in W.P. No. 21546/2026
supra, in the case of money decrees, 100% of the decretal
amount is required to be deposited. However, the Execution
Court, taking a liberal view, granted a stay subject to the
deposit of only 50% of the decretal amount. In view of the
above submissions, learned Senior Counsel seeks dismissal of
the petition.
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4. Considered the submissions made by learned
counsel for the petitioner and learned Senior counsel appearing
for the respondent.
5. The respondent herein instituted Com. O.S. No.
188/2025 for recovery of money, which resulted in a decree
directing the defendant to pay a sum of Rs.11,14,73,900/- with
interest at 18% per annum. In the said commercial suit, the
petitioner herein was placed ex parte.
5.1 The decree holder instituted Com.Ex.No. 97/2026,
in which the petitioner/judgment debtor filed an application
under Order XXI Rule 26 of the CPC. The said application was
entertained subject to the deposit of 50% of the decretal
amount. The said order was challenged before this Court in
W.P. No. 21546/2026, which came to be dismissed, thereby
confirming the order passed by the Execution Court.
5.2 The impugned order has been passed in a petition
filed under Order IX Rule 13 of the CPC. The Commercial Court,
taking note of the order dated 07.07.2026 passed in
Com.Ex.No. 97/2026 and also recording the submission of the
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judgment debtor that some time be granted to comply with the
conditional order passed by the Execution Court, proceeded to
pass the impugned order.
5.3 It is to be noted that the petitioner has already
failed in his challenge to the order dated 07.07.2026 passed in
Com.Ex.No. 97/2026. The scope of the present petition is
limited. The impugned order merely reiterates the order passed
in the execution proceedings. It is undisputed that the
conditions imposed by the order dated 07.07.2026 passed in
Com. Ex. P. No. 97/2026 remain uncomplied with.
5.4 Further, in a petition filed under Order IX Rule 13 of
the CPC, the scope of inquiry is confined to determining
whether sufficient cause has been shown for setting aside the
ex parte decree, including whether the judgment debtor was
prevented by sufficient cause from appearing before the Court.
While exercising jurisdiction under Order IX Rule 13 of the CPC,
the Court cannot examine the merits of the decree. Such an
exercise has to be undertaken in appeal against the decree,
which falls outside the scope of proceedings under the said
provision.
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6. Learned counsel for the petitioner submits that, in
view of Section 151 of the CPC, the Trial Court, while exercising
jurisdiction under Order IX Rule 13 of the CPC, can set at
naught a decree obtained by fraud.
6.1 The Hon’ble Supreme Court, in A. V. Papayya
Sastry (supra), has held that a judgment, decree or order
obtained by playing fraud on a Court, Tribunal or Authority is a
nullity and non est in the eye of law. However, such pleadings
or grounds cannot be considered in an application filed under
Order IX Rule 13 of the CPC.
6.2 In Emars Mining and Construction Pvt. Ltd.
(supra), the Calcutta High Court has referred to the judgment
of the Hon’ble Supreme Court in Ram Prakash Agarwal v.
Gopi Krishan, [(2013) 11 SCC 296], wherein the scope of
Section 151 of the CPC was examined. The Hon’ble Supreme
Court held that where, owing to a mistake of the Court, an ex
parte order is passed on account of fraud played upon the
Court or collusion, and the person aggrieved by such order has
no remedy under the provisions of the CPC to correct the
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mistake committed by the Court, Section 151 of the CPC can be
invoked.
6.3 In the present case, the petitioner merely contends
that the decree was passed as a result of fraud played by the
decree holder. Such a submission, by itself, is insufficient to
invoke Section 151 of the CPC unless the judgment debtor is
left without any remedy under the CPC. It is not the case of the
petitioner that no remedy is available under the CPC to address
the alleged fraud in obtaining the decree. In that view of the
matter, the said judgment is not applicable to the facts of the
present case.
6.4 The Hon’ble Supreme Court, in Lifestyle Equities
C.V. and Another (supra), while examining the scope of the
power of an Appellate Court to stay the execution of a decree
under Order XLI of the CPC, held that an unconditional stay of
execution may be granted where an exceptional case is made
out before the Appellate Court. The Hon’ble Supreme Court
further cautioned that the discretion of the Appellate Court to
grant an unconditional stay must not be exercised arbitrarily
and that such discretion must be exercised sparingly, only
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where an exceptional case is made out. The exceptional
circumstances have been illustrated in sub-paragraphs (8) and
(9) of paragraph 134. For convenience, the relevant portion is
extracted below:
"VIII) For the grant of benefit of an unconditional stay
of execution of a decree, an exceptional case has to be
made out before the appellate court. This discretion of
the appellate court to grant an unconditional stay of
execution of decree must not be exercised
arbitrarily. It must be exercised sparingly and only
if an exceptional case is made out for such stay in view
of the peculiar facts and attending circumstances of the
case before it.
(IX) A lodestar for bringing a case within the
purview of “exceptional case” for the purpose of
granting benefit of unconditional stay of the execution of
money decree by the appellate court would be, if the
money decree in question: -
(i) is egregiously perverse;
(ii) is riddled with patent illegalities;
(iii) is facially untenable; and/or
(iv) such other exceptional causes similar in nature."
6.5 The case on hand does not satisfy the exceptional
circumstances enumerated by the Hon’ble Supreme Court.
Moreover, it appears that, with a view to avoiding coercive
action in the course of the execution proceedings, the petitioner
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issued two cheques towards partial discharge of the decretal
liability to the extent of Rs.3.5 crores, which were dishonoured.
6.6 Further, learned counsel appearing for the
petitioner made a submission before the Commercial Court
that, if the time granted in the execution proceedings were
extended, the condition requiring deposit of 50% of the
decretal amount would be complied with. In that view of the
matter, the petitioner’s allegation of fraud does not merit
acceptance, particularly in the face of the aforesaid conduct.
6.7 This Court is satisfied, at least prima facie, that the
present petition amounts to an abuse of the judicial process
and is intended to interject the execution proceedings. Having
regard to the manner in which the petitioner has conducted the
proceedings and the unsustainable assurances given regarding
compliance with the conditions imposed by the Court, this
Court is constrained to direct the Execution Court to conclude
the execution proceedings within a time-bound period.
6.8 The Hon’ble Supreme Court, in Periyammal
(Dead) Through LRs and Others v. V. Rajamani and
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Another, Etc., [2025 INSC 329], has held that execution
proceedings should be concluded within six months from the
date of filing. In view of the said judgment, the Execution Court
is directed to endeavour to conclude the execution proceedings
expeditiously, within the timeline contemplated by the Hon’ble
Supreme Court in the aforesaid judgment.
7. The writ petition, being devoid of merit, is
accordingly dismissed.
Sd/-
(K. V. ARAVIND)
JUDGE
VBS
List No.: 1 Sl No.: 6