M/S. Satyen Construction vs State Of West Bengal

The Court : The appeal arises out of an order passed in course of the enforcement of an arbitral award. The respondent herein has challenged the

award by way of a petition under Section 34 of the Arbitration and Conciliation Act, 1996. On the respondent’s application for stay of the

operation of the arbitral award, a conditional order was passed. The award-debtor was unable to comply with the condition for the stay to be

effective.

Execution was levied by the award-holder. In course of such execution, the award-debtor has been permitted to make good the default so that the

stay in terms of the order passed in the proceedings under Section 34 of the Act would become effective. It may also be noticed that the award-

debtor has also applied before the Arbitration Court for extension of time to comply with the condition that was initially imposed by such Court.

The appellant award-holder questions the very authority of the executing court to enlarge the time to comply with a condition set by the Arbitration

Court. There is substantial merit in the appeal. However, it is doubtful whether the appeal itself is maintainable since the matter pertains to a

commercial dispute within the meaning of the definition of such expression in the Commercial Courts Act, 2015.

It is recorded that the award-debtor has submitted that it would put in the balance amount on account of interest that it was required to deposit in

addition to the principal sum awarded which has already been deposited. The award-holder says that there is no valid deposit of the principal amount

awarded since such deposit was not made within the time permitted by the Arbitration Court. The award-debtor’s application for extension of time

to comply with the condition imposed by the Arbitration Court has been adjourned because of the pendency of the present appeal.

The award-debtor will be entitled to pursue the prayer before the Arbitration Court since it, prima facie, does not appear that the executing court may

have had any authority to extend the time. Once the condition was not complied with, it gave the award-holder the right to institute execution

proceedings. When the execution proceedings had already been instituted, the executing court ought to have enforced the decree, as that is the

business of such Court. However, no final opinion is expressed on such issue, particularly, since the appeal itself may not be maintainable.

The award-holder has said that if the award-debtor deposits the principal and interest, the award-holder should be permitted to receive the amount

upon furnishing a bank guarantee covering the total amount. It will be open to the award-holder to make such prayer before the Arbitration Court in

course of the award-debtor’s application for extension of time that is pending. It will also be open to the award-debtor to seek permission to put in

cash deposit instead of furnishing bank guarantee for the relevant amount.

The observations here have been recorded at the request of the parties. Since the matter may be resolved on the award-debtor’s application for

extension of time pending before the Arbitration Court, no useful purpose would be served in keeping this appeal pending for deciding on the question

of maintainability.

Accordingly, APO No. 20 of 2020 along with GA No. 301 of 2020 stand disposed of.

There will be no order as to costs.