The court upheld that a stay of an arbitral award requires a reasonable security deposit, and statutory bars apply to revision applications against interlocutory orders in commercial matters.

JUDGMENT : 

Jasgurpreet Singh Puri, J.

The present petition has been filed under Article 227 of the Constitution of India for setting aside the impugned order dated 25.08.2025 (Annexure P-A), whereby the application under Section 36(2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') seeking stay of the arbitral award dated 10.02.2025 (Annexure P-1) has been allowed on the onerous condition of depositing Rs. 85,00,000/-.

2. Mr. Anand Chhibber, learned Senior Counsel appearing on behalf of the petitioner with Mr. Sandeep Verma, learned counsel submitted that it is a case where the petitioner company is the judgment debtor against whom an arbitration award was passed. The award was assailed by the petitioner by filing objections under Section 34 of the Act and along with the objections, an application under Section 36(2) of the Act seeking stay of the operation of the impugned award dated 10.02.2025 was also filed. He while referring to the award passed against the petitioner submitted that although in the operative part of the order the total amount of the award which was passed was Rs. 87,58,264/- along with interest @ 12% on the awarded amount but the same included Rs. 4,64,820/- as GST which the petitioner had already paid and there was no question of paying the same again to the respondent and it also includes about Rs. 16,00,000/- as a component which was paid as cash and since more than Rs. 2,00,000/- cash cannot be paid, the same was also against the law. He submitted that after deducting the aforesaid amount, the liability, if at all, of the petitioner subject to the final adjudication of the objections under Section 34 of the Act can be stated to be about Rs.43,00,000/- only and therefore, at the most an amount of Rs.40,00,000/- could have been deposited in pursuance of the impugned order, whereas by way of the impugned order, it has been so directed by the learned Additional District Judge to deposit an amount of Rs.85,00,000/- by considering the total outstanding amount as per award to be Rs. 87,58,264/-.

3. Learned Senior Counsel submitted that if the cash component of Rs.16,00,000/- is not in accordance with law, then it will not only be against the law but against the public policy and therefore, such an amount could not have been directed to be deposited by the petitioner before the learned Executing Court while considering the application under Section 36(2) of the Act. He also submitted that while considering an application for grant of stay under Section 36(2) of the Act, the rationale of Order 41 Rule 5 of CPC is to be seen but it is not mutatis mutandis applicable to the Act and which law is already settled. He submitted that it is the discretion of the learned Court to consider the principles and the rationale of Order 41 Rule 5 of CPC and therefore, while arriving at a figure by the learned Additional District Judge while considering the prayer of the petitioner under Section 36(2) of the Act was to pass a reasonable order for directing the petitioner for deposit of the amount regarding which there is no dispute which comes out to be around Rs.43,00,000/- and not Rs.85,00,000/-. He submitted that acute prejudice will be caused to the petitioner in case the aforesaid amount is deposited by the petitioner and therefore, the impugned order may be set aside to a limited extent that the aforesaid amount of Rs.85,00,000/- which has been directed to be deposited be reduced to Rs.43,00,000/-.

4. Mr. Vipul Joshi, learned counsel has appeared on behalf of the respondent-Caveator and submitted that the award amount is Rs. 87,58,264/-which includes number of components such as GST, interest or any other component but the total amount which is the awarded amount is the aforesaid amount along with interest thereon @ 12% and therefore, when the learned Additional District Judge was considering the aforesaid prayer of the petitioner for staying of the award with a direction to deposit Rs.85,