IMPORTANT POINT
Appeal/Application against arbitral award – Requirement of deposit of 75% of awarded amount as a pre-deposit is mandatory.

JUDGMENT :

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 26.09.2019 passed by the High Court of Uttarakhand at Nainital in Writ Petition (MS) No. 2708/2019, by which the High Court has dismissed the said writ petition and has confirmed the order passed by the learned Additional District Judge (Commercial), Dehradun in Miscellaneous Application No. 150 of 2018, whereby the appellant herein was directed to deposit 75% of the awarded amount in terms of Section 19 of Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the ‘MSME Act 2006’) the appellant herein-original appellant/applicant has preferred the present appeal.

2. That the parties are governed by the provisions of the MSME Act, 2006. A dispute arose between the parties regarding payment of goods which was taken by the appellant. The proceedings under Section 18 of the MSME Act, 2006 commenced. The Facilitation Council passed an award dated 10.11.2017 in favour of the respondent herein and directed the appellant to pay a sum of Rs. 105,053,387/- (Rs. Ten crores Fifty Lakhs Fifty Three Thousand Three Hundred and Eighty Seven only).

3. Feeling aggrieved by the said award, the appellant preferred an application before the learned Additional District Judge (Commercial), Dehradun under Section 34 of the Arbitration and Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006. As per Section 19 of the MSME Act, 2006, the appellant was required to deposit 75% of the amount awarded by the arbitrator. Several opportunities were given to the appellant to deposit 75% of the awarded amount. An application for waiver of pre-deposit was preferred which came to be dismissed. That thereafter vide order dated 22.08.2019, the learned Additional District Judge (Commercial), Dehradun granted a month’s time, as a last opportunity, to the appellant to deposit the said amount.

4. Feeling aggrieved by the said order, the appellant herein preferred writ petition before the High Court. By the impugned judgment and order, the High Court has dismissed the said writ petition. Even while dismissing the writ petition, the High Court granted further eight weeks’ time to the appellant to deposit 75% of the awarded amount.

5. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the appellant herein-original applicant has preferred the present appeal.

6. Today, when the present appeal is taken up for further hearing, Shri Ajay Kumar, learned Advocate appearing on behalf of the appellant has submitted that in the present case while issuing notice on 23.10.2019, this Court directed the appellant to deposit a sum of Rs. 2,50,00,000/- (Rs. Two crores Fifty lakhs) before the appellate authority and on such deposit the learned appellate Court was directed to take up the appeal on file and proceed with the same. It is stated that pursuant to the said order, the appellant has deposited a sum of Rs. 2,50,00,000/- (Rs. Two Crores Fifty Lakhs) and thereafter the learned appellate authority - Additional District Judge (Commercial), Dehradun has heard the appeal/application under Section 34 of the Arbitration and Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006 and the order is to be pronounced on 12.10.2021. Therefore, it is prayed to dispose of the present appeal.

7. Learned Advocate appearing on behalf of the respondent has submitted that, as such, it is mandatory to deposit 75% of the awarded amount as a pre-deposit at the time when the appeal/application under Section 34 of the Arbitration and Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006 is preferred. It is submitted that what is directed to deposit vide ex-parte order dated 23.10.2019 is not even 25% of the amount awarded. It is submitted that the question involved in the present appeal is a pure question of law and therefore the same may be decided by this Court even for future guidance.

7.1 Learned