The Supreme Court, in a leave to appeal arising from proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, held that there is no legal necessity to direct deposit of the entire decretal amount as a condition precedent for adjudicating a challenge to an arbitral award. Modifying the Bombay High Court’s interim order, the Bench of Chief Justice Surya Kant and Justice Joymalya Bagchi ruled that requiring such a full deposit or bank guarantee was unwarranted in the facts of the case.
The appeal was filed by Mumbai Metro Rail Corporation Limited against the High Court’s order directing it to deposit the entire disputed or decretal amount along with interest in the High Court registry within eight weeks while its Section 34 petition remained pending. The parties were heard through the Solicitor General, Mr. Tushar Mehta, appearing for the Appellant, and Mr. Abhishek Manu Singhvi and Mr. Mukul Rohatgi, representing the respondent joint venture.
Upon considering the nature of the controversy, the Court held that the High Court’s direction imposing a deposit of the full decretal amount as a precondition for deciding the Section 34 proceedings was legally unnecessary. The Supreme Court consequently modified the impugned order and partly allowed the appeal.
In place of the deposit requirement, the Court directed the Appellant to furnish an undertaking disclosing particulars of its immovable properties in Mumbai, expressly stating that in the event the arbitral award attains finality, the decretal amount shall be paid within eight weeks from such finality. The undertaking was also required to annex a chart describing the properties.
All pending applications were disposed of in light of the above directions.
Appearances:
For the Petitioner(s): Mr. Tushar Mehta, Solicitor General, Mr. Balbir Singh, Sr. Adv. Mr. Siddharth Dharmadhikari, Mr. Abhikalp Pratap Singh, Adv., Ms. Devanshi Singh, Adv., Mr. Bharat Bagla, Adv., Mr. Naman Tandon, Adv., Ms. Shivali Shah, Adv., Ms. Siya Singh, Adv., Ms. Rajeshwari Shankar, Adv., M/S. Apsak Consultants Llp, AOR.
For the Respondent(s): Dr. Abhishek Manu Singhvi, Sr. Adv., Mr. Mukul Rohatgi, Sr. Adv., Mr. Indranil Deshmukh, Adv. Mr. Raunak Dhillon, Adv., Ms. Madhavi Khanna, Adv., Ms. Saloni Kapadia, Adv., Mr. Anchit Jasuja, Adv., Mr. Karan Gandhi, Adv., M/S. Cyril Amarchand Mangaldas, AOR
