SC upholds HC order granting Amazon unconditional stay in ₹336 cr case

The Supreme Court said the Delhi High Court rightly found infirmities in the ₹336-crore trademark decree against Amazon, clarifying stay rules under Order XLI CPC

The Supreme Court on Monday upheld the Delhi High Court’s decision granting Amazon Technologies Inc. an unconditional stay on the execution of a ₹336-crore money decree passed in favour of Lifestyle Equities, holding that the High Court had not erred in exercising its discretion.

 

A Bench of Justices J B Pardiwala and K V Viswanathan dismissed Lifestyle Equities’ appeal, observing that the Division Bench of the Delhi High Court “rightly found serious infirmities” in the proceedings before the Single Judge, including the absence of valid service of summons on Amazon and the lack of any sustainable finding of trademark infringement.

 

“It is necessary for us to observe that the Court’s jurisdiction over a respondent is founded on a valid service of summons. Without a valid service, the Court cannot acquire jurisdiction over the respondent,” the Bench said, emphasising that proper service of summons is essential to ensure due process.

 

The court clarified that while Order XLI Rule 5 of the Civil Procedure Code (CPC) empowers appellate courts to stay execution of a decree, such power must be exercised with caution and on sufficient cause being shown.

 

“Mere filing of an appeal against an order of execution shall not ipso facto operate as a stay of proceedings,” the judgment noted. “A stay can be granted only through a specific, reasoned order after proper application of mind.”

 

Exceptional case for unconditional stay

 

Upholding the High Court’s view that the case warranted an unconditional stay, the Supreme Court laid down broad parameters for such relief.

 

“For the grant of the benefit of an unconditional stay of execution of a decree, an exceptional case has to be made out. This discretion must not be exercised arbitrarily, but only sparingly and in view of the peculiar facts and attending circumstances,” Justice Pardiwala wrote.

 

The Bench said a case could be considered “exceptional” if the decree in question was “egregiously perverse, riddled with patent illegalities, or facially untenable.”

 

Findings against Lifestyle Equities

 

The court took note of the High Court’s detailed findings that the ex parte decree of February 2025, which awarded damages of ₹336 crore to Lifestyle Equities over alleged infringement of its Beverly Hills Polo Club mark, was passed without valid service of summons on Amazon.

 

“It is apparent that the learned Single Judge was in error in proceeding ex parte against Amazon Tech,” the Bench quoted from the High Court’s findings, noting that no summons was ever served on Amazon after 8 March 2021.

 

The Supreme Court also referred to the High Court’s observations that Lifestyle had inflated its damages claim from ₹2 crore to ₹3,780 crore “merely in written submissions after conclusion of arguments, without amending the plaint or serving a copy on Amazon.”

 

“The basis for the claim for damages is, at all costs, to be contained in the pleadings of the plaintiff. It cannot be reserved for evidence,” the Bench reiterated, citing the High Court’s finding that the trial court’s decree lacked any legal foundation.

 

The Division Bench of the High Court had found no sustainable finding of infringement by Amazon, holding that “allegations against Amazon were merely shots in the dark, without any knowledge of the actual state of affairs.”

 

Clarifying the law on stay of execution

 

The Supreme Court’s 73-page ruling also undertook a detailed analysis of Order XLI Rule 5 CPC, clarifying that while courts generally require a deposit of decretal amount before granting a stay of a money decree, it is not a mandatory precondition.

 

“A deposit is not a condition precedent for an order of stay,” the Bench held. “The appellate court has discretion to impose such a condition depending on the facts and circumstances of each case.”

 

The court concluded by directing that its judgment be circulated to all High Courts to ensure uniform application of the law on grant or refusal of stay under Order XLI CPC.

 

“We should not disturb the impugned judgment and order passed by the Division Bench of the High Court,” the Bench said. “The main appeal shall be decided on its own merits and without being influenced in any manner by any of the observations made herein.”