The court modified the stay order, allowing the petitioner to furnish security instead of a cash deposit, emphasizing the need for judicious exercise of discretion in public interest cases.

Order

RESERVED ON October 22^nd, 2024

PRONOUNCED ON December 19 th , 2024

BY THE COURT

1. Heard learned counsel for both parties at length and perused the record carefully.

2. In instant civil writ petition filed by petitioner- Jaipur Development Authority (for short "JDA") under Article 227 of the Constitution of India, challenge has been made to the order dated 24.04.2024, passed by the Commercial Court No.2, Jaipur Metropolitan II, on an application filed by petitioner under Section 36 of the Arbitration and Conciliation Act, 1996 (for short "A&C Act, 1996"), seeking to stay the arbitral award dated 13.06.2023 until decision of application filed under Section 34 of the A&C Act, 1996, whereby and whereunder the Commercial Court has stayed execution of arbitral award, subject to deposition of 50% of the awarded amount by the petitioner. It has further been observed by the Commercial Court in the order impugned that after deposition of 50% of the awarded amount by petitioner- JDA, same be kept in four FDRs of equivalent amount, for a period of one year, and on filing of application by the claimant for withdrawal of such deposited amount, same would be considered and decided separately.

3. Learned counsel for petitioner- JDA vehemently argued that the arbitral award is patently illegal and is in clear conflict with the basic notions of morality and justice as also in contravention to the fundamental policy of Indian law, hence an application under Section 34 of the A&C Act, 1996 has been filed to set aside the award. Learned counsel argued that in the award, claimant has been held entitled to receive the payments of construction work, whereas admittedly construction work in the submergence areas, has not been done, hence respondent-claimant should not be held entitled to claim payments of such construction work, which in- fact was never done by the respondent-claimant at site. As far as payments of the other works of project are concerned, same have already been released by the JDA. Learned counsel pointed out that the total cost of design build phase of the project was of Rs.1470.85 Crore and the disputed amount is only of Rs. 52,28,38,351.86/- (about more than 52.28 Crores). Learned counsel urged that the Commercial Court, while putting the condition of pre-deposit of 50% of awarded amount for operating stay of arbitral award, has exercised its discretionary jurisdiction arbitrarily and injudiciously, as much as put such condition, without pondering over the real controversy behind withholding of such amount by the JDA and the petitioner, being a body of Government, may also be exempted from furnishing a security for the awarded amount in terms of Order 27 Rule 8-A CPC. Learned counsel submits that instead of directing the petitioner to deposit 50% of the awarded amount, the award ought to have been stayed, unconditionally. Learned counsel submits that although in the instant case, exceptional circumstances exist to stay the arbitral award unconditionally. Nevertheless, learned counsel for petitioner- JDA, during course of argument, offered and agreed to deposit a solvent security for 50% of the arbitral award in form of furnishing an FDR of a nationalised bank before the Court, instead of pre-deposit of cash money in Court. Thus, learned counsel has prayed to set aside/ modify the condition of pre-deposition of 50% of the arbitral award for operating the stay on the execution of the award.

To buttress his contentions, learned counsel for petitioner