Micro, Small and Medium Enterprises Development Act, 2006 – s.19 – Goods taken by appellant – Dispute regarding payment of – Award passed by Facilitation Council in favour of the respondent, appellant directed to pay Rs. 105,053,387/- – Challenged by appellant by filing application u/s.34, 1996 Act r/w s.19 – Directed to deposit 75% of the awarded amount in terms of s.19 – Several opportunities granted – Application for waiver, dismissed – Appellant granted last opportunity to deposit the said amount – Challenged – Writ petition dismissed – On appeal, held: Requirement of deposit of 75% of the awarded amount as a pre-deposit is mandatory – Both the courts below were justified in directing the appellant to deposit 75% of the awarded amount as a pre-deposit – Arbitration and Conciliation Act, 1996 – s.34.
Disposing of the appeal, the Court
HELD: 1.1 On a plain/fair reading of Section 19 of the MSME Act, 2006, at the time/before entertaining the application for setting aside the award made under Section 34 of the Arbitration & Conciliation Act, the applicant/appellant has to deposit 75% of the amount in terms of the award as a pre-deposit. The requirement of deposit of 75% of the amount in terms of the award as a pre-deposit is mandatory. However, at the same time, considering the hardship which may be projected before the appellate court and if the appellate court is satisfied that there shall be undue hardship caused to the appellant/applicant to deposit 75% of the awarded amount as a pre- deposit at a time, the court may allow the pre-deposit to be made in instalments. Therefore, as such, both the High Court as well as the learned Additional District Judge (Commercial), Dehradun were justified ASKA EQUIPMENTS LTD.
in directing the appellant to deposit 75% of the awarded amount as a pre-deposit. However, while issuing notice in the present proceedings on 23.10.2019, this Court directed the appellant to deposit Rs. 2,50,00,000/- (Rupees Two Crores Fifty Lakhs) and on such deposit the District and Sessions Judge, Dehradun was directed to take up the appeal on file and proceed with the same. It is reported that by now the application/appeal has been heard and the order is to be pronounced on 12.10.2021. The arrangement as per order dated 23.10.2019 is continued with till final disposal of the appeal/application under Section 34 of the Arbitration & Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006, which shall not be treated as a precedent. [Paras 9.2, 11 and 12][724-D-F; 725-G-H; 727-B-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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