M/S TIRUPATI STEELS versus M/S SHUBH INDUSTRIAL COMPONENT & ANR.

M/S TIRUPATI STEELS versus M/S SHUBH INDUSTRIAL COMPONENT & ANR.

The pre-deposit of 75% of the amount in terms of the arbitral award as required by section 19 of the MSMED Act, 2006 is mandatory before an application under section 34 of the Arbitration and Conciliation Act, 1996 can be entertained; however, the appellate court may permit the deposit to be made in instalments if...

Source-derived case information.

Parties
Appellant: M/S TIRUPATI STEELS; Respondent: M/S SHUBH INDUSTRIAL COMPONENT & ANR.
Jurisdiction
India
Judgment Date
19 April 2022
Procedural Posture
Civil Appeal / Appeal From the Judgment and Order Dated 09.04.2019 of the High Court of Punjab and Haryana at Chandigarh in FAO COM No.4 of 2019
Outcome
Appeal allowed
Legal Topics
Pre Deposit Under Section 19 MSMED, Setting Aside Arbitral Award Under Section 34 Arbitration Act, 1996, Execution Proceedings
Micro, Small and Medium Enterprise Development Act, 2006 Arbitration and Conciliation Act, 1996 Commercial Courts Pre Deposit Under Section 19 MSMED Setting Aside Arbitral Award Under Section 34 Arbitration Act, 1996 Execution Proceedings

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Parties

M/S TIRUPATI STEELS

Appellant

M/S SHUBH INDUSTRIAL COMPONENT & ANR.

Respondent

Procedural Posture

Civil Appeal / Appeal From the Judgment and Order Dated 09.04.2019 of the High Court of Punjab and Haryana at Chandigarh in FAO COM No.4 of 2019

Legal Issues

  1. 1 Whether pre-deposit of 75% of the awarded amount under section 19 of the MSMED Act, 2006 is mandatory before entertaining an application under section 34 of the Arbitration and Conciliation Act, 1996
  2. 2 Whether the High Court correctly permitted proceedings under section 34 without insisting on the pre-deposit required by section 19 of the MSMED Act, 2006

Ratio Decidendi

The pre-deposit of 75% of the amount in terms of the arbitral award as required by section 19 of the MSMED Act, 2006 is mandatory before an application under section 34 of the Arbitration and Conciliation Act, 1996 can be entertained; however, the appellate court may permit the deposit to be made in instalments if satisfied that depositing the entire amount at once would cause undue hardship.

Court Disposition

Appeal allowed

Orders

  • Impugned order of the High Court dated 09.04.2019 quashed and set aside
  • Respondent No.1 directed to deposit 75% of the awarded amount before its application under section 34 of the Arbitration and Conciliation Act, 1996 is entertained and considered on merits