The court affirmed that full deposit of the awarded amount, including interest, is necessary for staying the enforcement of an arbitral award, balancing equities between the award debtor and award holder.

Shampa Sarkar, J.

1. GA-COM/4/2024 is an application seeking deposit of additional cash security by the award debtors for the remainder of the awarded amount together with accrued interest as on December 31, 2023. The award holder is the applicant. The dues calculated as per the award as on 31^st December, 2023 stood at Rs. 5,32,80,181/-.

2. The dispute between the parties was that, the award debtor did not pay the bills raised by the applicant, despite complete execution of the work. The award holder invoked arbitration under clause 25 of the conditions of the contract. A statement of claim was filed before the learned Arbitrator and upon considering the facts and circumstances, the learned Arbitrator passed the award on July 2, 2022.

3. The award debtors filed an application for setting aside the award. The applicant filed an execution case seeking enforcement of the award vide EC No. 12 of 2023, on January 5, 2023. Immediately thereafter, the award debtors moved an application under Section 36 (2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act) on January 17, 2023. Before a predecessor Judge, the award debtors submitted that, they were willing to deposit Rs. 9 crores within a period of six weeks before the Registrar Original Side, High Court at Calcutta. Accordingly, an order was passed, staying the enforceability of the award. However, the award debtors failed to deposit the money within time. By order dated March 14, 2023, the time for deposit of the money was extended. On March 16, 2023, the award holder was informed that the money had been deposited. Accordingly, a prayer was made for withdrawal of the money. The award holder contended that, for the purpose of execution of the subject contract, a loan had been obtained from the Punjab National Bank. The award holder failed to repay the debt as per the repayment schedule of the bank. A notice under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was issued on February 17, 2021. It was also stated that the business had suffered on account of the Covid pandemic and substantial amount of money was required for survival of the business and repayment of the bank’s dues. The award holder was hoping to repay the amount from the awarded sum, but on account of the stay, the money did not pass to the award holder.

4. The application was allowed by order dated July 25, 2023. The Court allowed withdrawal of the sum deposited with a condition for securing the amount by a personal bank guarantee. Another application, i.e., G.A No. 2 of 2023 was filed on July 28, 2023, for addition of the name of the Punjab National Bank, Keyatala Branch, Kolkata. The application was allowed, and the order dated July 25, 2023 was modified on July 28, 2023. The orde