IMPORTANT POINT
Scope to stay execution proceeding by Executing Court is limited – It is only an interim arrangement enabling the party to obtain stay order from appropriate Court, including Appellate Court.

JUDGMENT

S.K. Mishra, J.—The Writ Petition has been preferred challenging the order dated 23.12.2023 passed by the Court of Senior Civil Judge (Commercial Court), Bhubaneswar, in Execution Petition No.367 of 2023, vide which the Petition dated 02.12.2023 filed under section 36(2) of the Arbitration and Conciliation Act, 1996, shortly, hereinafter “the Act, 1996”, by the Petitioner, being the Judgment Debtor, stood rejected and the matter was posted for hearing on Execution Petition.

2. The brief background facts, which led to filing of the present Writ Petition, are that the Petitioner issued a Letter of Intent (LOI) in favour of the Opposite Party for execution of civil construction, furnishing and interior design of various buildings at the premises of the Petitioner situated at Birla Institute of Management and Technology, IDCO Plot No.2, Gothapatna, Bhubaneswar, Odisha.

Pursuant to the same, a formal agreement was executed between the parties, wherein it was, inter alia, agreed that the Opposite Party will complete the work by 15.11.2012 for a contract value of Rs.18,00,00,000/- (Rupees Eighteen Crores) only. Several correspondences were addressed by the Petitioner to the Opposite Party, inter alia, pointing out the defects, poor workmanship and slow pace with which the work was being undertaken by the Opposite Party. As the work was perpetually delayed and the Opposite Party failed to fulfil its contractual obligation and committed material breach of the said agreement, the Petitioner, vide e-mail, asked the Opposite Party to vacate the site by 30.07.2014 as the Petitioner had decided to get the work finished by employing other contractors. Even if suffering loss at the hands of the Opposite Party, the Petitioner without taking any coercive step, chose to adhere to the terms of the agreement. Accordingly, in accordance with Clause 10-B of the agreement, the Opposite Party was communicated through e-mail about the defects/poor workmanship observed in the work done by it and was asked to rectify the same.

Since the Opposite Party failed to take any step for either removing the defects or completion of the incomplete work, the Petitioner gave a notice to the Opposite Party, inter alia, calling upon it to take corrective steps. As the Opposite Party failed to take any corrective step, considering the academic session had commenced, the Petitioner issued various work orders to third-party contractors for completion of defective and incomplete work. Consequently, since the disputes had arisen between the parties, the Petitioner invoked the arbitration clause in the agreement against the Opposite Party. In response, the Opposite Party, vide its letter addressed to the Petitioner, raised several frivolous and unjustified demands. Pursuant thereto, the process of constitution of the Arbitral Tribunal commenced and both the parties appointed their respective nominee Arbitrators, and both the nominee Arbitrators appointed the Presiding Arbitrator. Pursuant to the same, the statement of claim was filed by the Petitioner along with the cost of assessment certificate and experts evidence duly accompanied with their affidavits regarding the work done by the third-party contractors, inter alia, raising claims to the tune of Rs.3,76,35,234/- (Rupees Three crore seventy six lakh thirty five thousand two hundred and thirty four) only and Rs.90,00,000/- (Rupees Ninety Lakh) only. Counter claims were made by the Opposite Party to the tune of Rs.6,21,60,618/- (Rupees six crore twenty one lakh sixty thousand six hundred and eighteen) only. The Petitioner also filed its Reply to the Counter Claims before the Arbitral Tribunal.

Similarly, the Opposite Party also filed its Reply to the Statement of Claim filed by the Petitioner. Ultimately, an arbitral Award was passed on 02.09.2019 by the Arbitral Tribunal, whereby the claim of the Petitioner was partly allowed to the tune of Rs.1,00,00,000/- (Rupees one crore) only. On the other hand, the Counter