Arbitration proceeding to be disposed by the dist. Judge on its own merits and cannot be interfered by the parties: High Court of Bombay at Goa

8 WP 7619.doc IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.769 OF 2019 M S Jordan Dental Care Products Pvt Ltd now known as M S SCHIFFERAND MENEZES INDIA PRIVATE LIMITED a company incorporated under the Indian Companies Act 1956 And having its registered office at C.M.M Building Rue De Orem Through its Authorised Signatory Shri Ganpat Kapdi son of Ratnakar Kapdi Aged 42 years Indian National Resident of 179 1 Behind St. Ann s Blooming Buds Schools Sirsaim Bardez Goa M. R. CHENDILNATHAN SOLE PROPRIETOR OF M S RAJA AGENCY Plot No.253 Main Road Nehru Nagar Industrial Complex Old Mahabalipuram Road Kottivakkam Chennai Now having office at Vijay Raja Apex Plot No. 22 2nd Street Kamaraj Nagar Chemencherray Chennai 600 119 Mr. S. M. Singbal Advocate for the Petitioner Ms. Mehandi Desai Advocate holding for Mr. Hrudaynath Shirodkar Advocate for the Respondent 12th August 2021 8 WP 7619.doc Coram: M.S. SONAK J Date: 12th August 2021 1. Heard Mr. Singbal for the Petitioner and Ms. Mehandi Desai holding for Mr. Hrudaynath Shirodkar for the Respondent Rule. The rule is made returnable forthwith at the request and with the consent of learned Counsel for the parties The challenge in this petition is to the order dated 28.06.2019 made by the Principal District Judge granting a stay to the execution of award dated 26.10.2008 pending the disposal of Arbitration Petition 4. Mr. Singbal the learned Counsel for the Petitioner submits that though in terms of section 36(3) the Principal District Judge had the powers to stay the execution of the award such powers have to be exercised for reasons to be recorded in writing. He submits that the proviso to section 36(3) also provides that while considering an application for grant of stay of an arbitration award for payment of money the Court must have due regard to the provisions for grant of stay of a money decree under the provisions of Civil Procedure Code. Mr Singbal submits that there are no reasons in the impugned order dated 28.06.2019 and the stay has been granted subject only to a deposit of 25 percent of the awarded amount. He therefore submits that the impugned order warrants interference 12th August 2021 8 WP 7619.doc 5. Ms. Mehendi Dessai defends the impugned order based on the reasons contended therein. She submits that the impugned order was made on 28.06.2019 and therefore may not be interfered with at this stage particularly because by now the arbitration application under section 34 can itself be disposed of finally 6. On perusal of the impugned order there is some justification in the grievance made by Mr. Singbal. The Principal District Judge has merely quoted the provisions of sections 34 and 36 and thereafter disposed of the application for stay by observing the following: “10. The applicant herein is called upon to deposit 25% of the amount awarded by the arbitrator within a period of 30 days failing which the applicant shall not be permitted to contest the objections filed under Section 34 of the Arbitration and Conciliation Act 1996 I therefore pass the following order Application for Stay is allowed Execution of Award dated 26.10.2008 in Arbitration Case No.11.2008 is hereby stayed There are no reasons recorded. Therefore a case has been made out to set aside the impugned order dated 28.06.2019 and remand the matter as proposed by Mr. Singbal. However as submitted by Ms. Dessai at this stage the interest of justice will be better met if directions are issued to the Principal District Judge to dispose of Arbitration Petition No.6 2018 expeditiously. In the peculiar facts of the present case this is a better 12th August 2021 8 WP 7619.doc option to follow as otherwise the matter will have to be remanded to the District Court to reconsider the application for stay and much time will be spent in deciding this application for stay itself. There is bound to be overlapping of arguments. The time spent on deciding the application for stay can as well be spent on disposing of the Arbitration Petition Therefore in the peculiar facts of the present case and even though there is merit in the submission of Mr. Singbal the impugned order is not interfered with. Instead the learned Principal District Judge is directed to dispose of Arbitration and Conciliation Petition No.6 2018 on its own merits and in accord with law as expeditiously as possible and in any case within four months from today. The learned Counsel for the parties assure this Court that they will cooperate with the learned Principal District Judge in disposing of the Arbitration and Conciliation Petition No.6 2018. In particular Ms. Dessai submits that the Respondent herein will not seek any unnecessary adjournment and will cooperate in the disposal of the application under section 34(2) of the Arbitration and Conciliation Act 1996 In case the learned Principal District Judge dismisses the Respondent s application under section 34 of the said Act then the Principal District Judge to consider requiring the Respondent herein to deposit the balance of the awarded amount within a specified period 12th August 2021 8 WP 7619.doc 10. It is made clear that this Court has not examined the rival contentions of the parties on merits and therefore all contentions of all parties on merits are left open to be decided by the learned Principal 11. The parties are to now appear before the learned Principal District Judge taking up Arbitration and Conciliation Petition No.6 2018 on 23.08.2021 and file an authenticated copy of this order 12. The rule in this petition is disposed of in the aforesaid terms. All concerned to act on an authenticated copy of this order M.S. SONAK J. 12th August 2021

Summary: A challenge petition is preferred by the petitioner against the order passed by the Dist.  judge granting the stay to the execution of award. It was submitted by the Petitioner that as per the terms of Sec 36(3) the Principal Dist. Judge had powers to stay the execution of awards provided, such stay is awarded with reasonable reasons in writing. A single-judge bench comprising of Justice M.S. Sonak adjudicating the matter of M/S SCHIFFERAND MENEZES INDIA PRIVATE LIMITED v. M. R. CHENDILNATHAN SOLE PROPRIETOR OF M/S RAJA AGENCY (WRIT PETITION NO.769 OF 2019) dealt with the issue of whether to allow the present writ petition or not.  It was also submitted that the proviso to section 36(3) also provides that while considering an application for grant of stay of an arbitration award for payment of money, the Court must have due regard to the provisions for grant of stay of a money decree under the provisions of Civil Procedure Code. It is also stated that there are no reasons in the impugned order that the stay has been granted subject only to a deposit of 25 percent of the awarded amount. Therefore, it is submitted that the impugned order warrants interference. The Respondents stated that the order may not be interfered with at this stage, particularly because by now the arbitration application under section 34 can itself be disposed of finally. According to the Petitioners, the District Judge has merely quoted the provisions of sections 34 and 36 and thereafter disposed of the application for stay by observing the following: – “The applicant herein is called upon to deposit 25% of the amount awarded by the arbitrator within a period of 30 days failing which the applicant shall not be permitted to contest the objections filed under Section 34 of the Arbitration and Conciliation Act, 1996. I, therefore, pass the following order: Application for Stay is allowed. Execution of Award dated 26.10.2008 in Arbitration Case No.11.2008 is hereby stayed. “Therefore, no reasons for staying in the impugned order. As per the Respondents, the interest of justice will be better met if directions are issued to the Principal District Judge to dispose of Arbitration Petition expeditiously. It is also submitted that this is a better option to follow as otherwise, the matter will have to be remanded to the District Court to reconsider the application for stay and much time will be spent in deciding this application for stay itself. There is bound to be overlapping of arguments. The time spent on deciding the application for stay can as well be spent on disposing of the Arbitration Petition.