NATIONAL COLLATERAL MANAGEMENT SERVICES LTD. Vs. HARYANA COOPERATIVE SUPPLY AND MARKETING FEDERATION LTD.

JUDGEMENT

(1.) The petitioner has assailed the order dtd. 6/8/2021 passed by the Additional District Judge, Chandigarh, whereby the Court has allowed the application for staying the operation of the award dtd. 12/11/2018 corrected vide order dtd. 14/1/2019 during pendency of the objection petition under Sec. 34 of the Act.

(2.) Perusal of the impugned order would show that the stay application has been entertained, thereby unconditionally staying the operation of the award dtd. 12/11/2018 and corrected vide order dtd. 14/1/2019 in violation of Sec. 36 of the Arbitration and Conciliation Act, 1996 as amended from time to time.

(3.) Learned Senior Counsel for the petitioner submitted that the impugned order has been passed in utter disregard to the provisions of Sec. 36(2)(3) of the Act. The filing of objection petition under Sec. 34 of the Act shall not by itself render that award unenforceable, unless the Court grants an order of the operation of the stay of the arbitral award in accordance with the provisions of sub Sec. 3 on a separate application made for that purpose. In the event of filing such an application under sub Sec. 2 of the Act for stay of operation of the arbitral award, the Court may subject to such conditions as it may deem feet, grant stay for operation of such award for the reasons to be recorded in writing. For grant of stay in the case of an arbitral award for payment of money, the Court is to have due regard to the provisions for grant of stay in a money decree under the provisions of the CPC. The power under sub Sec. 36(3) of the Act to grant stay of an award is coupled with the duty to impose conditions which could include the condition of securing the award by deposit in Court, of the amount of the award. However, the Court may not impose condition for stay, if it deems appropriate not to do so. The power of Court to grant unconditional stay of an award is not unfettered, however, the same is subject to the condition in the second proviso i.e. the Court is satisfied that a prima facie case is made out that- (i) the arbitration agreement or contract which is the basis of the award; or (ii) the making of the award, was induced or effected by fraud or corruption.