₹3360 Crore Decree Without Pleadings, Findings or Notice — A Textbook Case of Procedural Perversity: Supreme Court Protects Amazon With Unconditional Stay

“When a Decree is Facially Tainted by Procedural Irregularity and Substantive Injustice, Courts are Not Powerless to Grant Unconditional Stay” - On October 7, 2025, the Supreme Court of India delivered a significant ruling in Amazon Technologies Inc. v. Lifestyle International Pvt. Ltd., dealing with the legality of an ex parte ₹3360 crore money decree passed in a trademark infringement suit. The Court upheld the Delhi High Court’s grant of an unconditional stay on the execution of this decree, holding that the proceedings against Amazon were so tainted with procedural illegality and substantive injustice that they qualified as an exceptional case justifying departure from the usual requirement of security under Order XLI Rule 5 of the Code of Civil Procedure.

The Court observed that the decree, passed without service of summons, without amendment of pleadings, and without a single finding on liability, was legally unsustainable and could not be permitted to operate pending appeal. The ruling reiterates that where a decree is passed in breach of foundational procedural safeguards, appellate courts can — and must — intervene to prevent injustice.

“Service of Summons is Not a Technicality — It is a Jurisdictional Requirement”

The genesis of the litigation lies in a trademark infringement suit filed by Lifestyle International Pvt. Ltd., owner of the well-known “Beverly Hills Polo Club (BHPC)” mark. The suit alleged that certain sellers on Amazon’s platform, including Cloudtail India Pvt. Ltd., were selling goods bearing logos deceptively similar to the BHPC polo player mark. While the suit originally claimed ₹2 crore in damages, the Delhi High Court’s Single Judge eventually awarded ₹3,360.28 crore against Amazon Technologies Inc., a Delaware-incorporated company, after proceeding ex parte against it.

Before the Supreme Court, Amazon contended that it had never been served with summons, and the ex parte proceedings were initiated without compliance with Order V of the CPC. Accepting this submission, the Court unequivocally held, “There is no evidence on record to show valid service of summons upon the appellant. The learned Single Judge proceeded ex parte erroneously.” The bench stressed that service of summons is not a mere formality but a jurisdictional prerequisite. Absent such service, no lawful adjudication could be made.

“From ₹2 Crore to ₹3360 Crore Without Pleadings or Amendment — Justice Cannot Survive on Procedural Abandonment”

The Court was particularly alarmed by the fact that a decree for ₹3360.28 crore was passed when the original claim in the plaint was only ₹2 crore. The plaintiffs had submitted revised damage computations and legal submissions post-trial, which were served only on Cloudtail and not on Amazon Technologies Inc. No amendment to the plaint was ever moved, nor was the defendant served with notice of the enhanced claim.

Condemning this practice, the Court noted: “A party cannot be condemned with an amount that was never pleaded or sought, without opportunity to respond.” It further stressed that relief in a civil suit must flow from pleadings, in accordance with Order VII Rule 7 of the CPC. The complete absence of pleadings on damages, and the failure to serve amended submissions, rendered the decree not only procedurally defective but constitutionally suspect.

“No Finding of Infringement, No Attribution of Liability — Yet Held Liable”

The Supreme Court highlighted that there was no specific pleading or finding that Amazon Technologies Inc. had committed or aided any act of infringement. The company’s only link was that it had licensed the 'SYMBOL' mark to Cloudtail, which was allegedly used in proximity to infringing marks. The license agreement itself prohibited any infringing use and indemnified Amazon against violations.

Rejecting the inference of complicity, the Court observed: “There is no prima facie material to attribute liability to Amazon Technologies Inc.” It held that the decree was passed in a vacuum — without any evidence of knowledge, intent, or direct involvement of the appellant in the alleged infringing acts. In the absence of a single finding of infringement or aiding infringement, such a massive decree was fundamentally unsustainable.

“Courts Are Not Mechanically Bound to Demand Security for Staying Execution of a Decree — Judicial Discretion Must Respond to Injustice”

The legal fulcrum of the case turned on whether the Delhi High Court was justified in granting an unconditional stay of the decree without insisting on deposit or security. Under Order XLI Rule 5 CPC, it is commonly understood that execution of a money decree may be stayed only upon the appellant furnishing security. Lifestyle International argued that such security was mandatory, especially given the magnitude of the decree.

Rejecting this argument, the Supreme Court clarified the position of law: “The discretionary power of appellate courts under Order XLI Rule 5 CPC can be exercised to grant unconditional stay when the decree is patently unjust, illegal or perverse.” The Court cited its earlier decisions in Malwa Strips Pvt. Ltd. v. Jyoti Ltd. and Kayamuddin Shamsuddin Khan v. State of Bihar, holding that the requirement of security is directory, not mandatory.

It further stated that in exceptional cases — such as the present one — where the decree is vitiated by lack of jurisdiction, breach of due process, and absence of findings, courts must not hesitate to exercise their equitable discretion.

“Arbitration and CPC Are Not Interchangeable — Statutory Silos Must Be Respected”

Lifestyle attempted to draw an analogy to Section 36(3) of the Arbitration and Conciliation Act, 1996, which permits courts to stay enforcement of arbitral awards only under narrow grounds, such as prima facie fraud or corruption. However, the Supreme Court firmly rejected this equivalence, holding that arbitration proceedings are governed by a distinct statutory framework.

The Court stated, “The proviso to Section 36(3) applies only to arbitral awards and cannot be imported into civil litigation.” It clarified that the principles under the CPC, especially concerning the stay of decrees, retain their independent statutory footing and cannot be diluted by reference to arbitration jurisprudence.

“Stay Is Not a Charity — But In The Face of Perversity, It Becomes a Necessity”

While reiterating that appellate courts must generally be cautious in granting stay of money decrees, the Court concluded that the present case was one of those rare and extreme scenarios where unconditional stay was not only permissible but necessary to prevent grave miscarriage of justice. The entire proceedings were riddled with irregularities — from lack of service, to lack of pleadings, to absence of findings — making the decree incapable of surviving appellate scrutiny even at a preliminary stage.

The Court emphasized, “Where a decree is not only legally unsustainable but tainted with procedural illegality and substantive injustice, appellate courts must step in to correct the record — not mechanically enforce injustice.”

A Stark Reminder That Due Process Is Non-Negotiable, Even Against Tech Giants

The Supreme Court’s ruling is a powerful reaffirmation of foundational civil procedure and judicial fairness. It underscores that even against multinational corporations like Amazon, Indian courts cannot dispense with due process. It also serves as a cautionary tale for plaintiffs — that procedural shortcuts and ambitious reliefs without pleading or service can lead to complete collapse of their case on appeal.

By upholding the unconditional stay, the Court balanced the scales of justice, protecting the integrity of civil process while leaving Lifestyle free to pursue its remedies lawfully, with proper pleadings, notice and proof.

Date of Decision: October 7, 2025