Case Note & Summary
The respondent, Snehadeep Structures Pvt. Ltd., filed Chamber Summons No. 553 of 2010 seeking dismissal of Arbitration Petition No. 499 of 2003 filed by the petitioner, The Maharashtra Small Scale Industries Development Corporation Limited, under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award dated 30.6.2003. The petition had a chequered history: initially dismissed on 23.8.2005 for non-compliance with Section 7 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, restored by a Division Bench on 17.11.2005, again dismissed on 25.1.2006 on the same ground, and again restored by a Division Bench on 5.2.2008. The respondent appealed to the Supreme Court, which in (2010) 3 SCC 34 held that the term 'appeal' in Section 7 of the 1993 Act includes an application under Section 34 of the 1996 Act, and directed the petitioner to deposit 75% of the award amount within three months, after which the court shall decide the Section 34 application. The petitioner made the deposit, and the petition is now pending for hearing on merits. The respondent's Chamber Summons sought dismissal for non-compliance, but the court noted that the deposit had been made and the petition is pending, and dismissed the summons as the petition is to be heard on merits.
Headnote
A) Arbitration - Pre-deposit Condition - Section 7 of Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 - Section 34 of Arbitration and Conciliation Act, 1996 - The Supreme Court held that the term 'appeal' in Section 7 of the 1993 Act includes an application under Section 34 of the 1996 Act, and directed the petitioner to deposit 75% of the award amount before the petition can be heard. The High Court dismissed the Chamber Summons seeking dismissal of the petition for non-compliance, as the deposit was made and the petition is now pending for hearing on merits. (Paras 1-5)
Issue of Consideration
Whether the term 'appeal' in Section 7 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 includes an application under Section 34 of the Arbitration and Conciliation Act, 1996, and whether the petitioner must deposit 75% of the award amount before the petition can be heard.
Final Decision
The Chamber Summons is dismissed. The arbitration petition is to be heard on merits.
Law Points
- Section 7 of Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act
- 1993 includes application under Section 34 of Arbitration and Conciliation Act
- 1996 within the term 'appeal'
- Pre-deposit of 75% of award amount is mandatory before hearing Section 34 petition
Case Details
2010 LawText (BOM) (10) 78
Chamber Summons No. 553 of 2010 in Arbitration Petition No. 499 of 2003
Dr. Virendra Tulzapurkar, Senior Counsel i/b Mr. Chandana Salgaoncar-Radia for the Applicant in support of the Chamber Summons for the Respondent; Mr. M.P. Rao, Senior Counsel i/b Mr. A.C. Mahimkar for the Petitioner
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Nature of Litigation
Chamber Summons by respondent seeking dismissal of arbitration petition under Section 34 of Arbitration and Conciliation Act, 1996 for non-compliance with pre-deposit condition under Section 7 of Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.
Remedy Sought
Respondent sought dismissal of Arbitration Petition No. 499 of 2003.
Filing Reason
Respondent contended that the petitioner failed to comply with the pre-deposit condition under Section 7 of the 1993 Act as interpreted by the Supreme Court.
Previous Decisions
The arbitration petition was initially dismissed on 23.8.2005 for non-compliance with Section 7 of the 1993 Act, restored by Division Bench on 17.11.2005, again dismissed on 25.1.2006, restored by Division Bench on 5.2.2008, and the Supreme Court in (2010) 3 SCC 34 held that Section 7 includes Section 34 applications and directed deposit of 75% of award amount.
Issues
Whether the term 'appeal' in Section 7 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 includes an application under Section 34 of the Arbitration and Conciliation Act, 1996.
Whether the petitioner's failure to deposit 75% of the award amount warrants dismissal of the arbitration petition.
Submissions/Arguments
Respondent argued that the petition should be dismissed as the petitioner had not complied with the pre-deposit condition under Section 7 of the 1993 Act.
Petitioner contended that the deposit had been made as directed by the Supreme Court and the petition is pending for hearing on merits.
Ratio Decidendi
The Supreme Court in (2010) 3 SCC 34 held that the term 'appeal' in Section 7 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 includes an application under Section 34 of the Arbitration and Conciliation Act, 1996, and directed the petitioner to deposit 75% of the award amount. Since the deposit has been made, the petition is to be heard on merits, and the Chamber Summons for dismissal is not maintainable.
Judgment Excerpts
This is the respondent’s Chamber Summons for a dismissal of the above petition under section 34 of the Arbitration and Conciliation Act, 1996.
The Supreme Court allowed the respondents’ appeal. The judgment is reported in (2010) 3 SCC 34.
Paragraph 65 thereof reads as under :- ... the term 'appeal' appearing in Section 7 of the Interest Act should include an application under Section 34 as well.
Procedural History
Arbitration Petition No. 499 of 2003 filed on 29.9.2003 to set aside award dated 30.6.2003. Dismissed on 23.8.2005 for non-compliance with Section 7 of 1993 Act. Restored by Division Bench on 17.11.2005. Again dismissed on 25.1.2006. Restored by Division Bench on 5.2.2008. Respondent appealed to Supreme Court in SLP (C) No. 7076 of 2008, which allowed appeal on 5.2.2008? (date not clear) and directed deposit of 75% of award amount. Petitioner made deposit. Respondent filed Chamber Summons No. 553 of 2010 seeking dismissal. Present order dated 22.10.2010 dismisses Chamber Summons.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
- Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993: Section 7
