Unconditional stay of monetary arbitral awards under Section 36 requires exceptional case of prima facie perversity or illegality; otherwise, deposit of full award amount appropriate, guided by Code of Civil Procedure money decree stay principles.

JUDGMENT :

N.J.JAMADAR, J.

1. Rule. Rule made returnable forthwith, and, with the consent of the learned Counsel for the parties, heard finally.

2. By this Petition under Article 227 of the Constitution of India, the Petitioners take exception to an order dated 25 September 2025 passed by the learned District Judge, Pune, whereby the application for stay to the execution and operation of the award under Section 36 of the Arbitration and Conciliation Act, 1996 (the Act, 1996) came to be partly allowed, subject to the Petitioners – Applicants in the application under section 34 of the Act, 1996 depositing the entire award amount along with interest accrued thereon, till the date of the deposit.

3. The background facts necessary for the determination of this Petition, can be summerized as under :

2.1 The Bombay Society of Franciscan Sister of Marry (R3) – a trust registered under the Maharashtra Public Trusts Act, 1950, was the original owner of the large parcel of land bearing final plot No.153, situated at Village Ghorpadi, within the limits of Pune Municipal Corporation. Respondent No.3 divided the larger land into 16 sub-plots. On 26 January 1980, Respondent No.3 entered into a development agreement with M/s. Choice (R1), a partnership firm, of which Atul Mahadeo Bhagat (R2) is a partner. Under the said Development Agreement, Respondent No.1 was to construct buildings on sub-plot Nos.13 to 15 and deliver the same to Respondent No.3 for its use and occupation, and, thereafter, develop and construct buildings on sub-plot Nos.1 to 8 and sell/transfer the same.

2.2 Eventually, sub-plot Nos.2 and 3 and 4 to 8 were permitted to be amalgamated. The Government of Maharashtra passed an order directing transfer of 30% of the constructed area - residual self-contained units, to the Government under the provisions of the Urban Lands (Ceiling and Regulation) Act, 1976.

2.3 Development commenced on amalgamated sub-plot Nos.4 to 8. However, the development could not be completed. Further Joint Venture Agreements and Development Agreements were entered into by Respondent No.1 with the third parties, who are impleaded as Respondent Nos.4 to 8. Despite the involvement of Respondent Nos.4 to 8 at various stages, further development of sub-plot Nos.4 to 8 on a portion of land by consuming unutilized FSI of about 9150 sq.ft. and the available TDR could not be carried out. The Respondents, thus, decided to entrust the future development in respect of the said project to the purchaser/developer interested to undertake the same.

2.4 Thus, the Respondents agreed to sell/assign unutilized potential residual FSI of 9150 sq.ft. to be used on Plot No.5 together with entire present and future TDR benefits accruing and arising for the entire aggregate area of the sanctioned layout plot Nos.4 to 8 having total area 5876.4 sq. mtrs., other benefits and residual accruals available to the said plot Nos.4 to 8 to be used and utilized on the plot No.5 thereof, in favour of the Petitioners. Accordingly, agreements for sale cum transfer of rights to use TDR came to be executed between the Petitioners and the Respondents, on 17 November 2015. Under the terms of the said ag