Bombay High Court
The State Of Maharashtra Water ... vs Patel Engineering Ltd. And Ors on 16 November, 2021
Bench: R. I. Chagla
1-IA-696-19-297-2019+.doc
Sharayu Khot.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
INTERIM APPLICATION NO.696 OF 2019
IN
ARBITRATION APPEAL NO.9 OF 2020
The State of Maharashtra Water ...Applicant/
Resources Department Appellant
thru the Executive Engineer
Versus
Patel Engineering Ltd. & Ors. ...Respondents
WITH
INTERIM APPLICATION NO.297 OF 2019
IN
ARBITRATION APPEAL NO.12 OF 2020
The State of Maharashtra Water ...Applicant/
Resources Department Appellant
thru the Executive Engineer
Versus
Patel Engineering Ltd. & Ors. ...Respondents
SHARAYU
WITH
INTERIM APPLICATION NO.697 OF 2019
PANDURANG
KHOT
Digitally
signed by
IN
SHARAYU
PANDURANG
KHOT
Date:
2021.11.18
ARBITRATION APPEAL NO.11 OF 2020
18:54:07
+0530
The State of Maharashtra Water ...Applicant/
Resources Department Appellant
thru the Executive Engineer
1/12
1-IA-696-19-297-2019+.doc
Versus
Patel Engineering Ltd. & Ors. ...Respondents
WITH
INTERIM APPLICATION NO.699 OF 2019
IN
ARBITRATION APPEAL NO.8 OF 2020
The State of Maharashtra Water ...Applicant/
Resources Department Appellant
thru the Executive Engineer
Versus
Patel Engineering Ltd. & Ors. ...Respondents
WITH
INTERIM APPLICATION NO.701 OF 2019
IN
ARBITRATION APPEAL NO.10 OF 2020
The State of Maharashtra Water ...Applicant/
Resources Department Appellant
thru the Executive Engineer
Versus
Patel Engineering Ltd. & Ors. ...Respondents
----------
Mr. S.A. Ahmed, Special Counsel for State with Smt. Tanaya
Goswami, AGP for State.
Mr. Mustafa Doctor, Senior Advocate with Nishi Bhankharia
and Ms. Ritika Ajitsaria i/by Trilegal for Respondents.
----------
2/12
1-IA-696-19-297-2019+.doc
CORAM : R.I. CHAGLA J.
DATE : 16 NOVEMBER 2021
ORDER :
1. Heard learned Counsel for the parties.
2. The all Arbitration Appeals have been fled under
Section 37 of the Arbitration and Conciliation Act, 1996 ("the
Act"). The Interim Applications have been taken out in these
Arbitration Appeals for stay of the execution/implementation
of the Awards/Judgments passed by the Arbitral Panel till the
hearing and fnal disposal of the Arbitration Appeals.
3. The Arbitration Appeal No. 9 of 2020 challenges the
judgment dated 21st January 2019 passed in Civil
(Arbitration) M.A. No. 216 of 2009 by the Court of District
Judge-1, Satara at Satara by which the Court had dismissed the
Application fled under Section 34 of the Act and upheld the
three Awards dated 29th February 2008.
4. By these three Awards, the Arbitral Tribunal had
awarded a total sum of Rs. 1,68,44,16,084/- which comprised of
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the principal Award amount plus pre-reference plus pendente
lite interest.
5. From the judgment dated 21st January 2019
passed by the District Judge-1, Satara, the Arbitration Appeal
No. 9 of 2020 has been fled under Section 37 of the Act.
6. The other Arbitration Appeal No. 8 of 2020;
Arbitration Appeal No. 10 of 2020; Arbitration Appeal No. 11 of
2020 and Arbitration Appeal No. 12 of 2020 have challenged
the judgments dated 21st January 2019 which have been
passed in the respective Civil (Arbitration) Miscellaneous
Applications being Civil (Arbitration) M.A. No. 168 of 2013;
Civil (Arbitration) M.A. No. 181 of 2012; Civil (Arbitration)
M.A. No. 262 of 2009 and Civil (Arbitration) M.A. No. 1 of 2011.
The said Civil (Arbitration) Miscellaneous Applications were
dismissed and the Awards dated 14th April 2013, 22nd April
2012, 4th September 2009 and 10th January 2011 were
upheld in favour of the Respondents herein.
7. The total amount that had been awarded in respect
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of these four Awards being Award Nos. 4, 5, 6 and 7 is a sum of
Rs. 1,22,09,37,689/- which comprises of the principal Award
amount plus pre-reference plus pendente lite interest.
8. The learned Counsel appearing for the Appellant in
the above Arbitration Petitions fled under Section 37 of the Act
has submitted that the judgment dated 21st January 2019
passed by the District Judge-1, Satara is the same judgment
passed in all the Civil (Arbitration) Miscellaneous Applications
which had been referred before the Court. He has submitted
that in view of there being one judgment, the amount of Rs.
100/- Crore deposited by the Appellant on 27th January 2009
in only Civil (Arbitration) M.A. No. 216 of 2009 fled under
Section 34 of the Act challenging the Award Nos. 1, 2 and 3
dated 29th February 2008. He has submitted that in respect of
the other four Civil (Arbitration) Miscellaneous Applications
challenging the four Awards being Award Nos. 4, 5, 6 and 7
there were no amounts deposited and/or directed to be
deposited. He has submitted that in view of the judgment dated
21st January 2019 being the same in each of the Civil
(Arbitration) Miscellaneous Applications passed by the District
Judge-1, Satara, further amount should not be directed to be
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deposited in respect of the Appeals fled by the Appellant.
9. The learned Counsel for the Appellant has relied
upon the decision of the Supreme Court in Malwa Strips Private
Limited Vs. Jyoti Limited1, in particularly paragraph 14
thereof in support of his submission that the undue hardship
will be caused to the Appellant in depositing the entire sums
awarded which Awards are nothing but a money decree.
Particularly, considering that the Appellant is the Government
depositing the amount which should be taken into
consideration by this Court.
10. The learned Senior Counsel appearing for the
Respondents has submitted that Section 37 Appeal stands on a
higher footing than the Petition under Section 34 of the Act
whilst considering the deposit of the amounts awarded,
particularly, considering that the Awards have been upheld by
the Satara Court in the Section 34 Petitions. He has relied upon
the decision of the Supreme Court in Manish Vs. Godawari
Marathwada Irrigation Development Corporation2, wherein the
1 (2009)2 SCC 426
2 SLP 11760-11761/2018 Order dated 26.09.2018
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Supreme Court has set aside the impugned order passed by this
Court which had ordered 60% deposit, pending the Section 37
appeal. The Supreme Court had relied upon its own orders
which clearly held that since these are money decrees, there
should be 100% deposit, with the Respondent being entitled to
withdraw the amount deposited and furnish solvent security to
the satisfaction of the High Court. Accordingly, the Supreme
Court had mandated a 100% deposit be made.
11. Learned Senior Counsel appearing for the
Respondent has thereafter, relied upon the decision of the
Supreme Court in Pam Developments Private Limited Vs. State
of West Bengal3 which has held that Section 36 of the Act does
not provide for any special treatment to the Government while
dealing with grant of stay in an application under proceedings
of Section 34 of the Act. Further, Section 18 of the Act provides
for equal treatment of parties. Thus, it is clear that there is no
exceptional treatment to be given to the Government while
considering the Application for stay under Section 36 of the Act
fled by the Government in proceeding under Section 34 of the
Act.
3 (2019)8 SCC 112
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12. Learned Senior Counsel for the Respondents
submits that the above fnding in Pam Developments Private
Limited (supra) would apply to an Appeal preferred by the
Government under Section 37 of the Act. The Government
cannot be afforded any special treatment whilst dealing with
grant of stay of the judgments passed under Section 34 of the
Act. The Government should be treated equally as other non-
Government entities.
13. The learned Senior Counsel for the
Respondents has dealt with the decision of the Supreme Court
which had been relied upon by the learned Counsel for the
Appellant viz. Malwa Strips Private Limited (supra) to contend
that the Supreme Court in that case was considering the
hardship to the Respondent in connection with direct payment
of the decreetal amount or a part of it and/or directly through
the judgment debtor to secure the payment of the decreetal
amount. In that context, the Supreme Court has held that a
strong case should be made out for passing an order of stay of
execution of the decree in its entirety.
14. Having considered these submissions, it is
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well settled by the Supreme Court as held in Manish (supra)
that in case where the Awards are nothing but money decrees
there should be 100% deposit, with the Respondent being
entitled to withdraw the amount deposited by furnishing
solvent security to the satisfaction of the Court.
15. In the present case, the Awards which have
been passed are nothing, but the money decrees whereby the
Respondent has been awarded their claim for monies due and
payable to them under the respective contracts with the
Appellant.
16. It is further clear from the decision of the
Supreme Court in Pam Developments Private Limited (supra)
that the Government cannot be given any special treatment
while dealing with the grant of stay in an Application under
Section 34 of the Act. There shall be equal treatment given to
the parties and no exceptional treatment can be given to the
Government while considering the Application for stay under
Section 36 fled by the Government under Section 34 of the Act.
This would equally apply to an Application for stay of
judgments under Section 34 of the Act in an Appeal fled under
1-IA-696-19-297-2019+.doc
Section 37 of the Act.
17. In view of the Arbitration Appeal having been
fled in respect of the judgments in the fve Civil (Arbitration)
Miscellaneous Applications which have been referred to above,
the judgments dated 21st January 2019 cannot be considered
as a single judgment and would necessarily have to be
considered as judgments in each of the Civil (Arbitration)
Miscellaneous Applications. The District Judge-1, Satara had
also thereafter modifed the said judgments to refer to the
Volumes in each of the Applications under Section 34 of the
Act. Further, there are fve Appeals fled by the Appellant
treating the judgments bearing the same date i.e. 21st January
2019 as separate judgments disposing of the Applications
under Section 34 of the Act.
18. It is to be noted that the total amount which
has been awarded comprises of the principal Award amount
under the respective Awards along with the pre-reference
interest and pendente lite interest comes to an Award of Rs.
2,90,53,53,773/-. Considering the fact that the amount of Rs.
100/- Crores has been deposited by the Appellant on 27th
1-IA-696-19-297-2019+.doc
January 2009, the balance amount of Rs. 1,90,53,53,773/- will
be required to be deposited pending the Arbitration Appeals
under Section 37 of the Act. Hence, the following order :-
(i) The Appellant shall deposit the sum of Rs.
1,90,53,53,773/- with the Registrar Judicial -I of
this Court within a period of six weeks from the
date of this order.
(ii) Upon deposit having been made by the Appellant
of the sum of Rs. 1,90,53,53,773/-, the
Respondents shall be at liberty to withdraw the
said amount deposited upon furnishing solvent
security to the satisfaction of the Registrar
Judicial -I of this Court.
(iii) The execution/implementation of the Awards/
Judgments by the Arbitral Tribunal is stayed
pending the hearing of the Arbitration Appeals
subject to the direction of deposit of the said sum
with the Registrar Judicial -I of this Court having
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been complied with by the Appellants.
(iv) The Interim Applications are disposed of in the
above terms.
[R.I. CHAGLA J.]
