The filing of an application under Section 34 of the Arbitration Act does not automatically stay the execution of an arbitral award, and compliance with the award is mandatory unless stayed by a competent court.

HON’BLE PIYUSH AGRAWAL, J.

1. Heard Mr. Abhishek Kumar along with Mr. Ishwar Kumar Upadhyay, learned counsel for the petitioner; Mr. Rahul Sripat, learned Senior Advocate assisted by Mr. Ishir Sripat, learned counsel for the respondents.

2. The petition u/a 227 has been filed for quashing the order dated 24.6.2024 passed by the Executing Court / Commercial Court No. 2, District Gautam Buddh Nagar in Execution Case No. 108 of 2021.

3. Brief facts as stated in the writ petition are that the petitioner is tenant of the industrial plot no. C – 156, Sector 10, NOIDA (area 114 Sq. Meter) (ground floor of the building), since the date of execution of tenancy agreement dated 1.7.2008 at the rate of Rs. 8000/- per month. The agreement was unregistered for a period of 11 months for manufacturing purpose which continued even after expiry of the period. There was a dispute between the plaintiff -petitioner and defendant respondent no. 1 with regard to the payment of rent, therefore, respondent no. 1 has filed a S.C.C. Case no. 19 of 2011 for ejection of the petitioner. In the said suit, the petitioner has filed an application for rejection of plaint under Order 7 Rule 11 CPC on the ground that since there is an arbitration clause in the rent agreement between the parties, as such, the dispute is required to be decided by the Arbitrator alone and the Court has no jurisdiction in the matter. The said application has been objected by respondent no. 1, however, the Additional Sessions Judge vide order dated 19.9.2015 has rejected the plaint of the respondent. Thereafter, respondent no. 1 has filed Arbitration petition before the sole Arbitrator for the same relief in which the petitioner has filed written statement. Thereafter, the Arbitrator has allowed the claim of the respondent no. 1 vide award dated 19.7.2017, against which the petitioner has filed an objection under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, Gautam Buddha Nagar. The said objection under Section 34 was rejected vide order dated 30.6.2022. Being aggrieved to the said order, the petitioner has filed Arbitration Appeal Defective no. 46 of 2022, under Section 37 of the Act before this Court, which was rejected vide order dated 6.12.2022. Thereafter the petitioner has approached the Apex Court in Special Leave Petition, which was also dismissed. During pendency of the objection filed by petitioner under Section 34 of the Act, respondent no. 1 has sold the property in question to respondent no. 2 vide registered sale deed dated 5.3.2021 against which Suit No. 342 of 2021 was filed by the petitioner before the Civil Judge (Sr. Division), Gautam Buddha Nagar for cancellation of sale deed dated 5.3.2021, which was rejected vide order dated 29.5.2023. The said order has been challenged by the petitioner before this Court in First Appeal No. 1000 of 2023, which was admitted on 10.4.2024. In the Execution Case No. 108 of 2021, the decree holder moved an application on 3.4.2024, which was objected by the petitioner but the court below has allowed the application bearing paper no. 89 Ga filed by the contesting respondent by the impugned order dated 24.6.2024 and judgement debtor/ petitioner was directed to make payment of Rs. 8,58,795/-. Hence the present petition.

4. Learned counsel for the petitioner submits that the award dated 19.7.2017 contemplate that if the same was not complied within 30 days then the petitioner would be liable to pay Rs. 15 thousand as mesne profits to the claimant/respondent no. 1 with compound interest @ 10 % from 20.8.2017 till handing over of the possession. He further submits that the application under Section 34 of the Arbitration Act is filed within time , the award would be deemed to be stayed and the petitioner was not obliged to comply with the direction of the award. He further submits that once the award is not operative, there is no question of mesne profits to be paid by the petitioner to respondent no. 1.