The power to grant unconditional stay of an arbitral award is not unfettered and is subject to conditions, including the condition of securing the award by deposit in Court.

JUDGMENT :

RAJ MOHAN SINGH, J.

1. The petitioner has assailed the order dated 06.08.2021 passed by the Additional District Judge, Chandigarh, whereby the Court has allowed the application for staying the operation of the award dated 12.11.2018 corrected vide order dated 14.01.2019 during pendency of the objection petition under Section 34 of the Act.

2. Perusal of the impugned order would show that the stay application has been entertained, thereby unconditionally staying the operation of the award dated 12.11.2018 and corrected vide order dated 14.01.2019 in violation of Section 36 of the Arbitration and Conciliation Act, 1996 as amended from time to time.

3. Learned Senior Counsel for the petitioner submitted that the impugned order has been passed in utter disregard to the provisions of Section 36(2)(3) of the Act. The filing of objection petition under Section 34 of the Act shall not by itself render that award unenforceable, unless the Court grants an order of the operation of the stay of the arbitral award in accordance with the provisions of sub Section 3 on a separate application made for that purpose. In the event of filing such an application under sub Section 2 of the Act for stay of operation of the arbitral award, the Court may subject to such conditions as it may deem feet, grant stay for operation of such award for the reasons to be recorded in writing. For grant of stay in the case of an arbitral award for payment of money, the Court is to have due regard to the provisions for grant of stay in a money decree under the provisions of the CPC. The power under sub Section 36(3) of the Act to grant stay of an award is coupled with the duty to impose conditions which could include the condition of securing the award by deposit in Court, of the amount of the award. However, the Court may not impose condition for stay, if it deems appropriate not to do so. The power of Court to grant unconditional stay of an award is not unfettered, however, the same is subject to the condition in the second proviso i.e. the Court is satisfied that a prima facie case is made out that- (i) the arbitration agreement or contract which is the basis of the award; or (ii) the making of the award, was induced or effected by fraud or corruption.

4. Once an application under Section 36(2) of the Act is filed for stay of operation of the arbitral award, the Court may subject to such conditions as it may deem fit, grant stay of the operation of such award, for reasons to be recorded in writing. The Court is empowered to impose such conditions as it might deem fit and may grant stay of operation of the award subject to furnishing of security covering entire amount of the award including interest. The proviso to Section 36(3) of the Act makes it clear that while considering an application for grant of stay in the case of an arbitral award for payment of money, due regard to be given to the provisions for grant of stay of a money decree under the provisions of the CPC. The proviso to Section 36(3) of the Act further stipulates that where the Court is satisfied that a prima facie case is made out that (a) the arbitration agreement or contract which is the basis of the award or, (b) the making of the award was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under Section 34 of the Award.

5. On the strength of Pam Developments Private Limited Vs. State of West Bengal, (2019) 8 SCC 112, Sepco Electric Power Construction Corporation Vs. Power Mech Projects Ltd., 2022 SCC OnLine SC 1243 and Board of Control for Cricket in India Vs. Kochi Cricket Private Limited and others, (2018) 6 SCC 287, learned Senior Counsel for the petitioners submitted that a differential treatment to the Government in certain cases may not be so applicable while considering a case against the Government under the