G H PAM DEVELOPMENTS PRIVATE LTD. versus STATE OF WEST BENGAL

Citation: [2019] 9 S.C.R. 252 · Decided: 12-07-2019 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
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PAM DEVELOPMENTS PRIVATE LTD.
  v.
STATE OF WEST BENGAL
(Civil Appeal No.5432 of 2019)
JULY 12, 2019
[R. F. NARIMAN AND VINEET SARAN, JJ.]
Arbitration and Conciliation Act, 1996 – Code of Civil
Procedure, 1908 – Effect of s. 36 of the Arbitration Act, vis-a-vis
the provisions of Or. XXVII, r. 8A of CPC – Respondent-State invited
tender relating to the work of ‘Special Repair Programme 2000-
2001 for different stretches of National Highway-II’ – The bid of
appellant was accepted and an agreement was registered – The
work under the agreement was completed – The appellant raised its
claims and dues before the State – The claims of the appellant were
not paid – Appellant filed an application u/s. 11(6) of the Act, 1996
– Arbitrator allowed claims of the appellant – Aggrieved, the
Respondent-State filed application u/s.34 of the Act, 1996 before
the High Court – Thereafter, appellant filed an execution application
before the High Court – Executing Court by order dated 3.10.2018
attached the sum of Rs. 2.75 crores and clarified that in the event
there was no stay of operation of the award, it was open to the
appellant to pray for release of the said amount – In the meantime,
the respondent filed stay application u/s. 36(2) of the Act, 1996
and order of the unconditional stay was passed relying on the
provisions of Or. XXVII, r. 8A of CPC – Relying on the order of the
unconditional stay, the Executing Court dismissed the execution
petition – On appeal, held: The Arbitration Act is a special Act
which provides for quick resolution of disputes between the parties
and s.18 of the Act makes it clear that the parties shall be treated
with equality – Once the Act mandates so, there cannot be any special
treatment given to the Government as a party – As such, under the
scheme of the Arbitration Act, no distinction is made nor any
differential treatment is to be given to the Government, while
considering an application for grant of stay of a money decree in
proceedings u/s. 34 of the Arbitration Act – The reference to CPC
[2019]  9 S.C.R. 252
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in s.36 of the Arbitration Act is only to guide the Court as to what
conditions can be imposed, and the same have to be consistent with
the provisions of the Arbitration Act – Insofar Or. XXVII, r.8A of
CPC is concerned, r.8A only provides exemption from furnishing
security, which would not restrict the Court from directing deposit
of the awarded amount and part thereof – Thus, order of the High
Court granting unconditional stay of the arbitration award not
sustainable in the eyes of the law – Accordingly, order dated
03.10.2018 of the Executing Court restored and as already directed,
it is open for the appellant-award holder to pray for release of the
attached amount.
Code of Civil Procedure, 1908 – Or.XXVII, r.8A – Application
of – Held: The archaic r. 8A of Order XXVII, CPC has no application
or reference in the present times, even if it is assumed that the
provisions of Or.XXVII, r.8A of CPC are to be applied, the same
would only exempt the Government from furnishing security, whereas
u/Or. XLI, r. 5 of CPC, the Court has the power to direct for full or
part deposit and/or to furnish security of the decretal amount –
r.8A only provides exemption from furnishing security, which would
not restrict the Court from directing deposit of the awarded amount
and part thereof.
Allowing the appeals, the Court
HELD: 1. Sub-Section (3) of Section 36 of the Arbitration
Act mandates that while considering an application for stay filed
along with or after filing of objection under Section 34 of the
Arbitration Act, if stay is to be granted then it shall be subject to
such conditions as may be deemed fit. The said sub-section clearly
mandates that the grant of stay of the operation of the award is to
be for reasons to be recorded in writing “subject to such conditions
as it may deem fit”. The proviso makes it clear that the Court has
to “have due regard to the provisions for grant of stay of a money
decree under the provisions of  the Code of Civil Procedure”. The
phrase “have due regard to” would only mean that the provisions
of CPC are to be taken into consideration, and not that they are
mandatory.  While considering the phrase “having regard to”,
this Court in the case of Shri Sitaram Sugar Company Limited. v.
PAM DEVELOPMENTS PRIVATE LTD. v. STATE OF
WEST BENGAL
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