Point of Law: Section 19 of Act reads as application for setting aside decree, award or order.

JUDGMENT :

Jyotsna Rewal Dua, J.

The challenge in this petition is to order dated 21.12.2022, passed by the learned District Judge, whereby application moved under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006 (the Act in short) was disposed of.

2. The award was passed by the Arbitrator on 30. 10.2021 in reference No. 3/5. Objections under Section 34 of the Arbitration and Conciliation Act, 1996 were preferred by the present respondent against the aforesaid award before the learned District Judge. Alongwith the objections, an application under Section 19 of the Act read with Section 151 of Code of Civil Procedure was also instituted, seeking stay of the implementation/execution of the award dated 30.10.2021. The applicant’s (present respondent) contention before learned District Judge was that in compliance of Section 19 of the Act, it had deposited 75% of the total awarded amount. It was further alleged that the present petitioner was proceeding ahead with the execution of the award dated 30.10.2021, hence, prayer was made for staying the execution of the aforesaid award.

The contention of the present petitioner (respondent before the learned District Judge) was that the amount deposited by the present respondent was short of 75% of the awarded amount. It was submitted that the deposit was not in terms of the requirement of Section 19 of the Act, therefore, the respondent was not entitled for the stay of the impugned award.

3. Learned District Judge allowed the application moved by the respondent under Section 19 of the Act vide his order dated 21.12.2022, staying the implementation and execution of the impugned award dated 30.10.2021 after holding that “as per the record, the applicant has deposited 75% of the award amount in compliance of the said provision.” Aggrieved, against order dated 21.12.2022, recourse to present petition has been made by the petitioner.

4. Learned counsel for the petitioner submitted that petitioner in its reply to the application had brought to the notice of learned District Judge that the deposit made by the present respondent fell short of the requirements under Section 19 of the Act. Without deciding as to whether the amount deposited by the respondent fulfilled the requirement of Section 19 of the Act, learned District Judge could not have assumed that the deposit made by the respondent was actually 75 % of the awarded amount.

5. I have heard learned counsel for the petitioner as well as learned counsel for the respondent. The dispute between the parties is as to whether the deposit made by the respondent before the learned District Judge was in consonance with the requirement of Section 19 of the Act or not. Section 19 of the Act reads as under : -

19. Application for setting aside decree, award or order.—No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any court unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such court:

Provided that pending disposal of the application to set aside the decree, award or order, the court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case subject to such conditions as it deems necessary to impose.

Hon’ble Apex Court in its decision dated 19.04.2022 rendered in Civil Appeal No. 2941 of 2022 (M/s Tirupati Steels Vs. M/s Shubh Industrial Component & others) held that pre-deposit of 75% of the awarded amount under Section 19 of the Act is a mandatory requirement. However, at the same time, considering the hardship which may be projected and the Court being satisfied the pre-deposit may be allowed to