Delhi High Court Allows Conditional Stay on Philips Damages Awards Pending Appeal

Delhi High Court Allows Conditional Stay on Philips Damages Awards Pending Appeal

Introduction

The Delhi High Court has granted a conditional stay on the execution of money decrees exceeding ₹20 crore passed in favour of Koninklijke Philips N.V. The stay has been made subject to the judgment debtors furnishing unconditional and irrevocable bank guarantees, reflecting the Court’s careful balance between appellate restraint and fairness in damages computation.

Factual Background

The dispute arises from multiple suits filed by Philips alleging infringement of its patent titled “Method of Converting Information Words to a Modulated Signal”, a technology used in DVD manufacturing and replication. During the pendency of the suits, the patent expired by efflux of time, rendering injunctive relief infructuous. Consequently, the Single Judge awarded damages of ₹6.22 crore, ₹1.61 crore, and ₹12.43 crore, along with interest at 12% per annum from the date of filing of the suits, and additional damages of ₹1 crore in each case.

Procedural Background

Aggrieved by the damages awards, Maj. (Retd.) Sukesh Behl and others preferred appeals before the Delhi High Court and sought stay of execution of the money decrees. The stay applications were considered by a Division Bench in light of the principles governing execution of money decrees under the Code of Civil Procedure and the Supreme Court’s decision in Lifestyle Equities C.V. v. Amazon Technologies Inc.

Issues

1. Whether execution of substantial money decrees should be stayed pending appeal.

2. Whether the findings on patent infringement and liability warranted appellate interference.

3. Whether the computation of damages justified closer scrutiny at the interim stage.

Contentions of the Parties

Appellant: The appellants contended that the damages awarded were based on unsupported presumptions, particularly regarding the number of DVDs replicated per stamper and the total DVDs manufactured. They argued that enforcing the decretal amount at this stage would cause grave prejudice, especially when the damages computation itself was under challenge.

Respondent: Philips opposed the stay, submitting that money decrees are ordinarily executable and that the Single Judge’s findings on infringement, patent validity, royalty determination, and supply of stampers did not suffer from any perversity warranting suspension of execution.

Reasoning and Analysis

The Division Bench of Justice C Hari Shankar and Justice Om Prakash Shukla reiterated that money decrees are normally not stayed in appeal, except in exceptional circumstances. Relying on Lifestyle Equities, the Court emphasised that a stay cannot be granted merely because an appeal has been filed.

The Bench categorically noted that the Single Judge’s findings on patent infringement, validity of the suit patent, fair and reasonable royalty, and liability were neither perverse nor patently illegal. It observed that these findings could not be characterised as “egregiously perverse” or “facially untenable” so as to justify a stay on that ground.

However, the Court drew a clear distinction between liability and quantification of damages. It found prima facie merit in the appellants’ challenge to the damages computation, observing that the assumption that 10,000 DVDs could be replicated from one stamper was unsupported by evidence. The Court underscored that damages cannot be imposed on the basis of mere presumption, and that the figures adopted by the Single Judge required closer scrutiny in appeal. At the same time, the Bench declined to grant a blanket stay, clarifying that the stay was not due to any doubt on liability, but only because the damages figure warranted re-examination.

Decision

The Delhi High Court stayed the execution of the money decrees only upon the appellants furnishing unconditional and irrevocable bank guarantees, with auto-renewal, drawn on a nationalised bank and covering the principal amount of damages awarded in each case. The requirement of depositing the decretal amount was dispensed with. Upon furnishing the bank guarantees, execution of the judgment and decree shall remain until further orders, subject to the outcome of the appeals, which have been listed for further hearing on January 15, 2026.

In this case the appellant was represented by Mr. J. Sai Deepak, Sr. Adv. with Ms. Anuradha Salhotra, Mr. Rahul Chaudhry, Mr. Nikhil Sharma and Ms. Mugdha Palsule and Mr. Avinash, Advocates. Meanwhile the respondent was represented by Mr. Dayan Krishnan, Sr. Adv. with Mr. Pravin Anand, Ms. Vaishali R Mittal, Ms. Pallavi Bhatnagar, Ms. Saijal Arora and Mr. Siddhant Chamola, Advocates.