Summary
The State was not entitled to an unconditional stay of a money award merely by invoking the government exemption from furnishing security under the Code of Civil Procedure. Section 36 of the Arbitration and Conciliation Act, as amended in 2015, required a separate stay application and permitted appropriate conditions, with equal treatment of government and private parties. Even assuming the CPC exemption applied, it did not prevent a direction to deposit the awarded amount.
Issues
- Whether the State could obtain an unconditional stay of an arbitral money award by relying on Order XXVII Rule 8A CPC.
- How the CPC provisions concerning stay of money decrees guide the exercise of power under amended Section 36.
Provisions considered
- Sections 18 and 36, Arbitration and Conciliation Act, 1996Equal treatment and the amended requirement of a separate, conditional stay application excluded any automatic governmental entitlement to stay; due regard to CPC provisions supplies guidance consistent with the Arbitration Act. (¶¶ 13–18, 24–27)
- Order XXVII Rule 8A and Order XLI Rule 5, Code of Civil Procedure, 1908Even assuming the governmental security exemption applied, it did not prohibit requiring full or partial deposit of the decretal amount as a condition of stay. (¶¶ 13, 19–21, 27)
Held
- The reference to CPC in Section 36 requires due regard, rather than mandatory incorporation of provisions inconsistent with the self-contained Arbitration Act. An unconditional governmental stay would undermine the amended enforcement scheme. (¶¶ 16–18, 24–26)
- The Court agreed that exemption from furnishing security does not remove the court’s discretion to require a deposit while balancing the award holder’s interests. Government is not entitled to exceptional treatment under Sections 18 and 36. (¶¶ 19–20, 24–27)
Result
Appeals allowed; the High Court’s unconditional stay dated 13 December 2018 was quashed and the executing court’s order dated 3 October 2018 restored. The award holder could seek release of the attached amount under that order. No costs.