The court ruled that the pre-deposit of 75% of the arbitral award under the MSMED Act is mandatory, and appeals are not maintainable for orders outside those specifically enumerated in the Commercial Courts Act.

Judgment :

C.V.Karthikeyan J.

The respondent in A.No.5539 of 2025 in Arb O.P.(Com.Div.) SR.No.145560 of 2025 aggrieved by the order dated 18.11.2025 of a learned Single Judge of this Court is the appellant herein.

2.Arb O.P.(Com.Div.) SR.No.145560 of 2025 had been filed by the respondent M/s. Super Steam Boiler Engineers Pvt. Ltd., under Section 34 (2) (b) (ii) of the Arbitration and Conciliation Act , 1996 r/w Section 19 of the Micro, Small and Medium Enterprises Development Act , 2006 (hereinafter referred to as ‘MSMED Act’) seeking to set aside the Arbitration Award dated 07.04.2025 passed by the Sole Arbitral Tribunal in Case No. IAF 10 of 2023. In the said petition, A.No.5539 of 2025 had been filed, again by M/s.Super Steam Boiler Engineers Pvt. Ltd., seeking exemption from deposit of 75% of the amount of the Arbitral Award. The Arbitrator had granted the Award as follows:

"64. In the result, the counter claims are rejected and the Respondent is directed to pay the Claimant a sum of Rs.30,71,386/- (Rupees Thirty Lakhs Seventy One Thousand Three Hundred and Eighty Six Only) along with the compound interest with monthly rests at three times the bank rate of 6.50% notified by the Reserve Bank of India under Notification No.RBI/2024-25/111 DOR.RET.REC.57/12/01.001/2024-25 dated 07.02.2025 and as stipulated in Section 15 & 16 of the MSMED Act, 2006 from 18.09.2010 till the date of realization. No cost."

3.The pre-deposit of 75% of the Award amount is mandated under Section 19 of the MSMED Act. The learned Single Judge had held that the Sole Arbitrator had determined the principal amount as Rs.30,71,386/- and had further held that 75% of the pre-deposit amount has to be made insofar as that determinable amount is concerned. In view of that reasoning, a direction was issued to the applicant therein to deposit 75% out of the principal amount of Rs.30,71,386/- together with simple interest at the rate of 6.5% per annum from 18.09.2010 to 04.07.2025. It was further held that if the said amount was not deposited, the original petition will stand rejected.

4.This appeal had been filed challenging the said direction. It had been contended that the said order was in violation of Section 19 of the MSMED Act and its object. It was contended that the directions were also in contrary to the Award, wherein, interest was awarded three times of 6.75% interest as per Sections 15 and 16 of the MSMED Act. It was stated that there cannot be any scope for exempting or waiving the deposit of 75% amount. It was further contended that this Court should ensure that there is strict compliance of the provisions under of the MSMED Act and should therefore modify the directions of the learned Single Judge accordingly.

5.The learned Senior Counsel for the respondent however raised the preliminary issue of maintainability of the appeal since the appeal emanates from an order, wherein, exemption of deposit of 75% of the amount was sought and the learned Single Judge had not granted such exemption, but had only determined the principal amount and the interest rate and had directed 75% of such determinable amount should be deposited as a pre-condition to maintain the appeal. The learned Senior Counsel raised the issue of the maintainability of the appeal since underSection 13(2) of theCommercial Courts Act, 2015, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court except otherwise in accordance with the provisions of the Act. It had been further provided that an appeal shall lie only from such orders that are specifically enumerated under order XLIII of the Code of Civil Procedure. The learned Senior Counsel pointed out that the order under appeal does not fall with