M/s. Orissa Coal Chem Pvt. Ltd vs M/s. NALCO And Others

Arindam Sinha, J

Mr. Mohapatra, learned advocate appears on behalf of appellant, who was supplier. He submits, there was award made in arbitration caused by operation of provisions in Micro, Small and Medium Enterprises Development Act, 2006. He draws attention to section 19 to submit, the petition for setting aside the award dated 29th September, 2016, made to the Court below, did not accompany mandated fixed deposit of 75% in respect of awarded amount. Hence, in the eye of law there was no petition for setting aside the award in the extended period allowed. It is irrelevant that the deposit was subsequently made on 19th May, 2017. In the circumstances, the petition was not there on the expiry of time prescribed for presenting it under sub-section (3) in section 34, Arbitration and Conciliation Act, 1996.

He proceeds to demonstrate finding in the award that Rs.23,74,931/- was admittedly not paid by respondent on supplies had from his client. Relied upon passage from the award is extracted and reproduced below.

“Both the parties were present before the Council in its 45th sitting of MSEFC on 28.06.2016. The petitioner stated that during 1994-95 and 1988-99, they had supplied coal tarpitch to the O.P. but the O.P. made part payment and leaving a balance of Rs.23,74,931.00. The O.P. disputed the claim and stated that it was in lieu of the bank guarantee. The bank guarantee if any should have been released after expiry of the period for supply of the order and in their cases it was one year. xxx xxx xxx”

Ms. Rath, learned advocate appears on behalf of respondent. She submits, section 19 in the 2006 Act allows the Court, in which, inter alia, challenge to the award is filed, to direct manner, in which the pre-deposit is to be made. That delinks the requirement of pre-deposit from presentation of the petition. She submits, the challenge petition was presented within the time prescribed.

She submits further, there is no reason given in the award for finding that aforesaid sum was admittedly due. The supplier did not furnish the bank guarantee required under the order of supply. 10% of every bill for supply was withheld as security, on omission to furnish the bank guarantee. The amount was the security money. There was reason to appropriate the security. No opportunity was given to her client to place its case in the reference.

The appeal and the one tagged will be heard and dealt with on adjourned date or thereafter. By consent, list on 22nd August, 2022 along with ARBA no.8 of 2020.

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