1

IN THE HIGH COURT AT CALCUTTA

COMMERCIAL APPELLATE DIVISION

ORIGINAL SIDE

Present:

The Hon’ble Justice Debangsu Basak

And

The Hon’ble Justice Aryak Dutt

AO-COM 13 of 2026

WITH

AP COM/382/2024

IA NO. GA-COM/1/2026

M/s. Mohindra Tubes Limited (Earlier known as Mohindra Tubes

Private Limited)

Vs.

Public Health Engineering Department, Gorkha Territorial

Administration, Darjeeling

AO-COM 20 of 2026

IA NO. GA-COM/1/2026

M/s. Mohindra Tubes Limited (Earlier Known as Mohindra Tubes

Private Limited)

Vs.

Public Health Engineering Department, Gorkha Territorial

Administration, Darjeeling

FMAT (ARBAWARD) 19 of 2025

M/s. Jaggi Brothers Overseas Private Limited

Vs.

M/s. BESCO Limited

For the Appellant :Mr. Avinash Kankani, Adv.

in AO-COM/13/2026 & Ms. Shyantee Datta, Adv.

AO-COM/20/2026

For the Respondent :Mr. Surojit Nath Mitra, Sr. Adv./Adv.-Gen.

in AO-COM/13/2026 & Mr. Swernendu Ghosh, Sr. Adv.

AO-COM/20/2026 Mr. Soumanjan Bhattacharya, Adv.

Mr. Debdut Mukherjee, Adv.

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Ms. Vidhi Birmecha, Adv.

For the Appellant :Ms. Ujjaini Chaterjee, Adv.

in FMAT/19/2025 Ms. Pallavi Pain, Adv.

For the Respondent :Mr. Siddhartha Banerjee, Adv.

in FMAT/19/2025 Mr. Rajib Mullick, Adv.

Mr. Divyan Agarwal, Adv.

Hearing Concluded on : August 28, 2026

Judgement on : September 28, 2026

DEBANGSU BASAK, J.: -

Contents Page

No.

Preface .................................................................................................................................................. 3

Nature of Appeals .............................................................................................................................. 3

Parties to Appeals ............................................................................................................................. 3

Contentions of MTL .......................................................................................................................... 4

Contentions of PHE .......................................................................................................................... 9

Contentions of JB ........................................................................................................................... 12

Contentions of BL ........................................................................................................................... 16

Events in AO COM 13 of 2026 and AO COM 20 of 2026 ................................................... 22

Events in FMAT (ARBAWARD) No. 19 of 2025 ...................................................................... 26

Issues .................................................................................................................................................. 28

Relevant provisions of the two statutes ................................................................................... 29

Scheme of Sections 15 to 19 and 24 ........................................................................................ 34

Mandatory nature of Section 19 of 2006 Act ......................................................................... 37

Interplay of Section 34 of 1996 Act and Section 19 of 2006 Act ..................................... 39

Primacy of 2006 Act over 1996 Act ........................................................................................... 40

Section 37 of 1996 Act, Section 19 of 2006 Act, and Section 13 of 2015 Act ............ 43

Intersectionality of 1996 Act, 2006 Act and 2015 Act on the right to appeal. ........... 52

Effect of Amendment of Section 36 of the 1996 Act on Section 19 of 2006 Act......... 54

Compliance of Section 19 of 2006 Act in AO COM 13 of 2026 and AO COM 20 of

2026 ..................................................................................................................................................... 60

Compliance of Section 19 of the 2006 Act in FMAT (ARBAWARD) No. 19 of 2025 ... 63

Answer to Issue No. (i) ................................................................................................................... 64

Answer to Issue No. (ii) .................................................................................................................. 64

3

Answer to Issue No. (iii)................................................................................................................. 65

Answer to Issue No. (iv) ................................................................................................................. 65

Answer to Issue No. (v) .................................................................................................................. 66

Directions........................................................................................................................................... 66

Preface

1. Three appeals have been heard analogously as they

involve similar issues.

Nature of Appeals

2. Appellant in AO COM 13 of 2026 has assailed the

order dated May 13, 2026 passed by the learned Single Judge

restoring an application under Section 34 of the Arbitration

and Conciliation Act, 1996. Same appellant has filed AO COM

20 of 2026 assailing the order dated March 31, 2026 by the

learned Single Judge. Appellant in FMAT (ARBAWARD) 19 of

2025 has assailed the judgment and order dated February 10,

2025 passed by the Learned Chief Judge, City Civil Court,

Calcutta, setting aside the award dated July 13, 2023 passed

by the Facilitation Council.

Parties to Appeals

3. For the purpose of identification of the parties in the

three appeals, appellant in AO COM 13 of 2026 and AO COM

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20 of 2026 is referred to as Mohindra Tubes Limited or MTL

while the respondent in those two appeals is referred to as

Public Health Engineering or PHE. Appellant in FMAT

(ARBAWARD) 19 of 2025 is referred to as Jaggi Brothers

Overseas Private Limited or JB while the respondent therein

as Besco Limited or BL.

Contentions of MTL

4. Learned Advocate appearing for the MTL has

contended that, PHE assailed the award dated January 17,

2023 passed by the West Bengal Micro, Small and Medium

Enterprises Development Facilitation Council hereinafter

referred to as the Facilitation Council by filing an application

under Section 34 of the Act of 1996 which was registered as

AP No. 763 of 2023.

5. Learned advocate appearing for MTL has contended

that, since the award was passed by the Facilitation Council

acting under the provisions Micro, Small A nd Medium

Enterprises Development Act, 2006, provisions of Section 19

of the Act of 2006 stood attracted and applicable to the

application under Section 34 of the Act of 1996. He has

contended that, pre-deposit under Section 19 of the Act of

5

2006 is mandatory. In support of such contention, he has

relied upon 2023 SCC OnLine Cal 220 0 ( Board of Major

Port Authority for the Shama Prasad Mookerjee Port vs.

Marine Craft Engineers (P) Ltd.), unreported decision of the

Madras high Court in (Numaligarh Refinery Ltd. vs. M/s

Solar Design Pvt. Ltd.) and 2022 (1) SCC 61 (Gujrat State

Disaster Management Authority vs. Aska Equipments

Ltd.).

6. Relying upon 1967 SCC OnLine SC 140 (Lakshmi

Ratan engineering Works Ltd. Vs. Assistant commissioner

(Judicial) I, Sales Tax Kanpur Range, Kanpur & Anr. )

learned advocate appearing for MTL has contended that, when

the application under Section 34 of the Act of 1996 is taken

up for consideration, adequate proof of compliance with

Section 19 of the Act of 2006 must be on record.

7. Learned advocate appearing for MTL has contended

that, the application under Section 34 of the Act of 1996 was

listed before the learned Single Judge on November 17, 2023

and December 15, 2023 when, the respondent did not comply

with the mandatory pre-deposit. He has referred to the order

dated December 18, 2023 by which, learned Single Judge had

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directed the respondent to deposit 75 per cent of the awarded

amount out of which 75 per cent was to be secured by bank

guarantee and 25 per cent by cash security before the

Registrar, Original Side.

8. Learned advocate appearing for MTL has contended

that, the application under Section 34 of the Act of 1996 was

taken up on two further dates on April 1, 2024 and April 16,

2024 when PHE had failed to appear. Therefore, learned Trial

Judge had dismissed the application for default on April 16,

2024.

9. Learned advocate appearing for MTL has relied upon

2024 SCC OnLine Del 1472 (Central University of

Jharkhand vs. King furnishing and Safe Co. ) for the

proposition that, filing and entertaining of the petition are two

different aspects.

10. Relying upon 2026 INSC 451 (Habban Shah vs.

Sheruddin) learned advocate appearing for MTL has

contended that, a conditional decree is self-operative and that

non-compliance of the condition therein coupled with the

failure to move any application for extension of time within the

period stipulated results in automatic dismissal/lapse of the

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underlying proceedings which ceased to exist in the eyes of

law and cannot thereafter be revised.

11. Learned advocate appearing for MTL has contended

that, MTL had put the award into execution. He has referred

to various orders passed in the execution proceedings and

particularly to the order dated November 28, 2025 where non-

compliance with Section 19 of the Act of 2006 was noted.

12. Learned advocate appearing for MTL has contended

that, by the order dated March 31, 2026, learned Single Judge

had condoned the delay in filing the application for restoration

without inviting any affidavits. He has pointed out that the

order dated March 31, 2026 is the subject matter of the

appeal being AO COM 20 of 2026.

13. Relying upon 2021 (4) SCC 602 (Chintels India

Limited vs. Bhayana Builders Private Limited ) learned

advocate appearing for the MTL has contended that, the two

appeals of MTL are maintainable inasmuch as, the impugned

orders have the effect of an order refusing to set aside the

award.

14. Relying upon 2012 SCC OnLine Cal 13229 (Smt.

Gitarani Rakshit vs. State of West Bengal & Ors. ) learned

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advocate appearing for MTL has contended that gross

negligence and lackadaisical conduct disentitles a party to a

discretionary remedy.

15. Relying upon 2003 (4) SCC 739 (State of A.P vs.

Goverdhanlal Pitti ) learned advocate appearing for the MTL

has contended that, legal malice or malice in law means an

act done wrongfully or wilfully without reasonable or probable

cause and is deliberate act in disregard of the rights of others.

He has pointed out that, the Government of West Bengal,

Public Health Engineering Department has specifically allotted

funds to the PHE by the allotment letter dated February 19,

2026 for the purpose of satisfying the amount in the award.

He has contended that, PHE is presently trying to take a stand

which is not permissible.

16. Relying upon 2023 SCC OnLine SC 95 (Godrej Sara

Lee Ltd. vs. The Excise Taxation Officer-cum-Assessing

Authority and Ors.) learned advocate appearing for MTL has

contended that, maintainability and entertainability are

distinct concepts. In the facts and circumstances of the

present case, the petition under Section 34 of the Act of 1996

although could be filed, could not have been proceeded with or

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entertained without compliance with the mandatory

provisions of Section 19 of the Act of 2006.

Contentions of PHE

17. Learned Advocate General appearing for PHE has

referred to the sequence of events leading to the appeals. He

has contended that, the order dated April 16, 2024 makes it

abundantly clear that, the application under Section 34 of the

Act of 1996 was dismissed for non -appearance of the

respondent and not for any other reason. Any incorrect

recording in any subsequent order passed in the execution

proceeding does not change the nature of the reasoning of the

order dated April 16, 2024.

18. Learned Advocate General appearing for PHE has

contended that, the order dated May 13, 2026 merely restores

the application under Section 34 of the Act of 1996 and is not

an order passed under Section 34 thereof. He has contended

that the application under Section 34 of the Act of 1996 was

not heard on merits at all. The impugned order dated May 13,

2026 therefore, does not have the effect of setting aside or

refusing to set aside an arbitral award under Section 34 as

contemplated under Section 37(1)(c) of the Act of 1996.

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Consequently, he has contended that, neither of the appeals

are not maintainable.

19. In support of the contention that the two appeals are

not maintainable, learned Advocate General appearing for

PHE has relied upon 2020 (4) SCC 234 (BGS SGS Soma JV

vs. NHPC Limited) , 2016 SCC OnLine Del 5383

(Harmanprit Singh Sandhu Vs. Arcadia Shares & Stock

Brokes (P) Ltd.) , 2021 (4) SCC 602 (Chintels India Limited

vs. Bhayana Builders Private Limited ), 2000 (6) SCC 94

(Essar constructions vs. N.P. Rama Krishna Reddy) and

2017 (14) SCC 225 (Union of India vs. Simplex

Infrastructures Ltd.).

20. Learned Advocate General appearing for PHE has

contended that, the document dated February 19, 2026 is an

internal document of the respondent for allotment of funds

and cannot be considered in the manner as sought to be

contended on behalf of the appellant.

21. Referring to Section 19 of the Act of 2006 learned

Advocate General appearing for PHE has contended that, time

to deposit can be extended. In support of such contention, he

has relied upon 2012 (6) SCC 345 (Goodyear India Pvt. Ltd.

11

vs. Norton Intech Rubbers (P) Ltd. ), 2012 (2) CTC 819

(Goodyear India Pvt. Ltd. vs. Norton Intech Rubbers (P)

Ltd.), 2022 (7) SCC 429 ( Tirupati Steels vs. Shubh

Industrial Component & Anr.).

22. Learned Advocate General appearing for PHE has

contended that, the order dated December 18, 2023 was

passed in an application under Section 36(2) of the Act of

1996. He has contended that, non-compliance of such order

merely allows MTL to proceed with the execution case. Failure

to deposit does not render the application under Section 34 of

the Act of 1996 as infructuous or still born. Moreover,

according to him, Section 19 of the Act of 2006 , has not

prescribed any time limit for the deposit to be made.

According to him, only embargo is that the Court would not

entertain the application under Section 34 of the Act of 1996

unless the prescribed deposit is made.

23. Learned Advocate General appearing for PHE has

contended that, there is no bar in restoring the application

under Section 34 of the Act of 1996 since, the same does not

tantamount to entertaining such an application. According to

12

him, restoration of an application under Section 34 of the Act

of 1996 does not violate Section 19 of the Act of 2006.

Contentions of JB

24. Learned Advocate appearing for JB has contended

that, the appeal under Section 37 of the Act of 1996 is

directed against the judgment and order dated February 10,

2025 passed by the learned Chief Judge , City Civil Court

setting aside an arbitral award dated July 13, 2023 passed by

the Facilitation Council.

25. Learned Advocate appearing for the JB has referred to

the sequence of events leading up to the impugned judgement

and order. She has submitted that, in the arbitration

proceedings, BL did not give any effective response as to why

the bills of the appellant were not paid.

26. Learned Advocate appearing for the JB has contended

that inadequate stamping of arbitral award is not a ground for

setting aside the same. She has relied upon 2003 (8) SCC

565 (M. Anasuya Devi & Anr Vs. Manik Reddy & Ors.) in

support of her contention that, objection in respect of the

inadequately stamped arbitral award can at best be taken at

the time of execution of the award.

13

27. Learned Advocate appearing for the JB has contended

that a deposit of 75 per cent as required under Section 19 of

the Act of 2006 is mandatory. She has relied upon 2022 (7)

SCC 429 (Tirupati Steels vs. Shubh Industrial Component

& Anr.) and 2023 SCC Online Cal 2200 (Board of Major

Port Authority for the Shama Prasad Mookerjee Port vs.

Marine Craft Engineers (P) Ltd.), in support of such

contention.

28. Learned advocate appearing for JB has contended

that, Section 19 of the Act of 2006 does not contain any

exception as appearing in Section 36 of the Act of 1996.

According to her, Section 19 of the Act of 2006 and Section 36

of the Act of 1996 operate in separate fields. She has relied

upon 2021 (18) SCC 790 (S ilpi Industries and Ors. vs.

Kerala State Road Transport Corporation & Anr.) and

2023 (6) SCC 401 ( Gujarat State Civil Supplies

Corporation Ltd. vs. Mahakali Foods Private limited (Unit

2) & Anr.) in support of the contention that, the provisions of

the Act of 2006 override the provisions of the Act of 1996.

29. Relying upon 1978 (4) SCC 16 (U.P. State Electricity

Board and Anr. vs. Hari Shankar Jain & Ors. ) learned

14

advocate appearing for JB has contended that, the provisions

of the Act of 1996 are applicable to a proceeding under the Act

of 2006 to a limited extent. She has contended relying upon

2014 (8) SCC 319 (Commercial Tax Officer, Rajasthan vs.

Binani Cements Ltd. & Anr. ) a purposive interpretation

which advances the object of the Act of 2006 should be

adopted.

30. Relying upon AIR 1952 Cal 124 ( Satyanarayan

Prasad vs. Diana Engineering) learned advocate appearing

for JB has contended that, an appeal is a continuation of the

proceedings before the learned Trial Judge. Therefore, any

issue which was res judicata before the Trial Court will

become sub judice in an appeal between the parties.

31. Referring to the merits of the matter, learned advocate

appearing for JB has contended that, JB is a supplier as

contemplated under the Act of 2006 . In support of such

contention, she has relied upon Section 2(n) and (8) of the Act

of 2006 and the registration certificate of JB.

32. Relying upon 2025 (3) SCC 440 ( NBCC (India)

Limited vs. State of West Bengal ) learned advocate

appearing for BL has contended that, the question of whether

15

a supplier or a unit which may not have a registration prior to

the date of supply is pending before the Larger Bench of the

Hon’ble Supreme Court.

33. Referring to the registration certificate of JB, learned

advocate appearing for JB has contended that, JB is involved

in the activity of manufacturing and processing of Metal Steel

Scraps. The investment of JB is less than the prescribed limit

and therefore, JB is a small enterprise within the meaning of

the Act of 2006. She has submitted that, the ratio of 2023

SCC OnLine Cal 956 (Anupam Industries Limited & Anr.

vs. West Bengal Micro Small Enterprise Facilitation

Council and Anr.) applies to the facts and circumstances of

the present case.

34. Learned advocate appearing for JB has contended

that, an application under Section 34 of the Act of 1996

assailing an award passed by the Facilitation Council under

the Act of 2006 cannot be entertained by passing the

provision of Section 19 of the Act of 2006. She has relied upon

2023 SCC OnLine SC 1852 (India Glycols Limited & Anr.

vs. Micro and Small Enterprises Facilitation Council

Medchal Malkajgiri & Ors.) in support of such contention.

16

Contentions of BL

35. Learned advocate appearing for BL has contended

that, JB was not entitled to approach the Facilitation Council

under the Act of 2006. JB cannot be considered to be a

supplier within the meaning of the Act of 2006. He has

referred to Section 2(n) and (8) of the Act of 2006 to contend

that, JB does not fall in any of the categories under the Act of

2006. Invocation and assumption of jurisdiction by the

Facilitation Council was bad in law.

36. Learned advocate appearing for BL has contended

that, JB approached the Facilitation Council as a micro

enterprise and not as a small enterprise as will appear from

the Udyog Aadhaar Registration. According to him, JB

therefore cannot claim any benefit under Section 8 of the Act

of 2006 which deals only with small enterprise.

37. Learned advocate appearing for BL has contended

that, the appellant is involved in an industry engaged in

manufacturing goods falling under the First Schedule to the

Industries (Development and Regulation) Act, 1951. JB has

supplied metal, steel, heavy metal melting scrap to BL. Such

materials fell under Serial No. 1.A of the First Schedule to the

17

Act of 1951. He has relied upon 2023 SCC OnLine Cal 956

(Anupam Industries Limited & Anr. vs. West Bengal Micro

Small Enterprise Facilitation Council and Anr.) in support

of his contention.

38. Referring to 2025 (3) SCC 440 (NBCC (India) Limited

vs. State of West Bengal) learned advocate appearing for BL

has contended that, the ratio laid down therein has no

manner of application to the facts and circumstances of the

present case.

39. Relying upon 2014 (16) SCC 623 (Sundeep Kumar

Bafna vs. State of Maharashtra & Anr. ) learned advocate

appearing for BL has contended that in case of conflict, the

previous decision of the Co-ordinate Bench would prevail.

40. Referring to Sections 15 to 18 of the Act of 2006,

learned advocate appearing for BL has contended that, only a

dispute between a buyer and the supplier as defined under

the Act of 2006 can be referred to or brought before

Facilitation Council. According to him, JB was not a supplier

at the material point of time, therefore, could not have

approached the Facilitation Council for redressal of the

grievances.

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41. Learned advocate appearing for BL has contended

that, JB was registered as a supplier under the Act of 2006

only on January 20, 2019. The work order had been issued on

June 1, 2018 and the bills were raised between the period

June to July 2018 which is much prior to JB being registered

as a supplier under the Act of 2006.

42. Relying upon 2021 (18) SCC 790 (Silpi Industries &

Ors. Vs. Kerala State Road Transport Corporation & Anr. )

learned advocate appearing for BL has contended that, since

the bills were raised on a date when JB did not have

registration, JB was not entitled to be treated as a supplier.

He has relied upon 2022 SCC OnLine SC 355 (Vaishno

Enterprises vs. Hamilton Medical A.G. and Another ) and

2022 SCC OnLiine SC 1198 ( Nitesh Estates Limited vs.

Micro and Small Enterprises Facilitation Council of

Haryana & Others) in support of such contention.

43. Relying upon 2023 (6) SCC 401 (Gujarat State Civil

Supplies Corporation Ltd. Vs. Mahakali Foods Private

Limited (Unit 2) & Anr.) learned advocate appearing for BL

has contended that, since, JB was not a supplier within the

meaning of Section 2(n) read with Section 8 of the Act of 2006,

19

the Facilitation Council did not have jurisdiction to pass the

award.

44. Learned advocate appearing for BL has conten ded

that, pre-deposit under Section 19 of the Act of 2006 was not

mandatory. He has referred to the amendments introduced to

Section 36 of the Act of 1996. He has contended that, such

amendments were introduced in 2016 much after the

enactment of the Act of 2006. He has referred to the second

proviso to Section 36(3) of the Act of 1996 which provides that

an award obtained by fraud or corruption may be stayed

unconditionally pending challenge under the Act of 1996. He

has contended that, Section 36 (3) of the Act of 1996 did not

curve out any exception for an arbitration conducted by the

Facilitation Council under the Act of 2006.

45. Relying upon 1984 (3) SCC 127 ( Ajoy Kumar

Banerjee vs. Union of India) learned advocate appearing for

BL has contended that, even if it is assumed that the Act of

1996 is a piece of general legislation and that the Act of 2006

is a special legislation then also the amendment in the general

legislation took place while the special legislation was in force.

20

Therefore, the amended provisions of the general legislation

would prevail over previous special legislation.

46. Relying upon 1999 (5) SCC 624 (S. Prakash & Anr.

vs. K. M. Kurian & Ors.) learned advocate appearing for BL

has contended that, the proviso to Section 36 (3) of the Act of

1996 would prevail over Section 19 of the Act of 2006. Relying

upon 2021 (19) SCC 206 (Jharkhand Urja Vikas Nigam

Limited vs. State of Rajasthan & Others) learned advocate

appearing for BL has contended that, the exceptions curved

out under Section 36 of the Act of 1996 for pre-deposit would

apply to a challenge made to an award passed by the

Facilitation Council.

47. Learned advocate appearing for BL has contended

that, JB perpetuated fraud in law and on Facilitation Council

by projecting itself as a supplier within the meaning of the Act

of 2006 whereas it is not so. Such fraud perpetuated has

rendered the award a nullity and void ab initio. Question of

pre-deposit under Section 19 of the Act of 2006 therefore does

not arise.

48. Without prejudice to the earlier contentions, learned

advocate appearing for BL has contended that, in the event,

21

BL is asked to make a deposit of 75 per cent then, BL should

be allowed to do so by instalments. He has relied upon 2022

(7) SCC 429 (Tirupati Steels vs. Shubh Industrial

component & Anr.).

49. Learned advocate appearing for BL has contended

that, the issue as to whether, the Facilitation Council can act

as an arbitrator after having acted as a conciliator is pending

before a Larger Bench.

50. Learned advocate appearing for BL has contended

that, JB cannot be considered as a supplier within the

meaning of the Act of 2006. In support of such contention, he

has referred to the certificate of registration of JB and 2019

SCC OnLine Bom 4542 ( Biopharma Pvt. Ltd. vs. Jagtap

Horticulateur Private Limited) and 2019 SCC OnLine Guj

2474 (Easun Reyrolle Limited vs. Nik San Engineering Co.

Limited).

51. Learned advocate appearing for BL has contended

that, the award is liable to be set aside. He has contended

that, the Facilitation Council carried an impression from the

conciliation proceeding and did not independently apply its

mind in the arbitration. He has contended that the award is

22

passed on the sub missions made by BL during the

conciliation proceedings which violates the provisions of the

Act of 1996. Moreover, according to him, BL was not provided

with adequate opportunity to put up, statement of defence. BL

was not supplied with a copy of the statement of claim and

after a belated supply was denied an adequate opportunity to

file statement of defence. He has contended that, the award

stands vitiated under Section 34(2)(a)(iii)(iv) and Section

34(2)(d)(ii) of the Act of 1996.

Events in AO COM 13 of 2026 and AO COM 20 of 2026

52. AO COM 13 of 2026 and AO COM 20 of 2026 have

arisen out of the orders passed in AP NO. 763 of 2023. MTL

had approached the Facilitation Council for non-payment of

its bills by PHE. Facilitation Council had passed the award

dated January 17, 2023 in favour of the MTL. PHE had

challenged the award dated January 17, 2023 passed by the

Facilitation Council under Section 34 of the Act of 1996 being

AP No. 763 of 2023 on September 26, 2023.

53. On October 17, 2023 PHE had filed an application

under Section 36(2) of the Act of 1996 for stay of the award

dated January 17, 2023 being AP NO. 776 of 2023.

23

54. By an order dated December 18, 2023, the learned

Single Judge had disposed of the application under Section

36(2) of the Act of 1996 being AP No. 776 of 2023 by directing

PHE to secure the entire awarded amount within five weeks

from the date of the order, failing which the MTL was granted

liberty to enforce the award. None of the parties had preferred

any appeal therefrom.

55. Time to furnish security in terms of the order dated

December 18, 2023 having expired, MTL had put the award

into execution being EC (Com) No. 130 of 2024.

56. The petition of PHE under Section 34 of the Act of

1996 being AP No. 763 of 2023 was dismissed for default on

April 16, 2024 on the failure of PHE to appear.

57. On May 24, 2024 PHE had applied for restoration of

the petition under Section 34 of the Act of 1996 after

condoning the delay in filing such restoration application.

58. By order dated July 22, 2025, learned Executing

Court, had recorded that the application under Section 34 of

the Act of 1996 was dismissed due to non -deposit of the

amount mandated by Section 19 of 2006. PHE has contended

that, such recording in the order dated July 22, 2025 is

24

incorrect and in any event does not change the material

position that no attempt under Section 19 of 2006 was made

by PHE prior thereto.

59. There is substance in the contention of PHE that, the

petition under Section 34 of the Act of 1996 was dismissed for

default and not on the ground of non-compliance of the order

of deposit made on December 18, 2023.

60. In the execution proceeding, being EC (Com) No. 130 of

2024, learned Executing Court had passed di verse orders

enforcing the award dated January 17, 2023 passed by the

Facilitation Council.

61. Executing Court had passed the order dated August 2,

2025 extending the order of attachment of bank account till

November 30, 2025.

62. By an order dated November 26, 2025, the Executing

Court has noted that the awarded amount had escalated.

Executing Court had directed the Executive Director of PHE to

be present in Court to indicate the steps taken for payment of

the award.

63. By an order dated November 28, 2025, Executing

Court had noted the sequence of events heading up to the

25

order dated November 26, 2025. Executing Court had

recorded its strong dissatisfaction with the conduct of the

PHE. Executing Court had, in view of the persistence non -

compliance, suppression on material facts, failure to adhere to

the statutory mandate or the order of the Court and lack of

bonafide, issued various directions on PHE. Executing Court

had also noted that, despite directions requiring the Executive

Director of PHE to appear on November 28, 2025 it failed to do

so.

64. By an order dated January 9, 2026 Executing Court

had noted compliance of the earlier orders of filing of affidavits

and presence of the Executive Director, PHE.

65. By an order dated January 22, 2026, Executing Court

had extended the interim order.

66. By an order dated April 1, 2026 Executing Court had

refused to extend the interim order in view of no application

for extension having been filed.

67. PHE had filed supplement ary affidavit in the

restoration proceeding affirmed on February 27, 2026 by

which, PHE had invited the Court to extend the time to

comply with the order dated December 18, 2023.

26

68. By the order dated March 31, 2026, learned Single

Judge has condoned the delay of seven days in filing the

application for restoration. MTL has assailed this order in AO

COM No. 20 of 2026. By an order dated May 13, 2026, learned

Single Judge has recalled the order of dismissal for default

dated April 16, 2024 and restored the petition under Section

34 of the Act of 1996 being AP NO. 763 of 2023. MTL has

assailed the order dated May 13, 2026 in AO COM 13 of 2026.

Events in FMAT (ARBAWARD ) No. 19 of 2025

69. In FMAT (ARBAWARD) No. 19 of 2025 JB had

approached the Facilitation Council claiming various amounts

against BL. Facilitation Council had passed the award dated

July 13, 2023 in favour of the JB and as against BL.

70. BL being aggrieved by the award dated July 13, 2023

had filed an application under Section 33 of the Act of 1996

read with Rule 18 of the West Bengal Medium Small and

Micro Enterprises Facilitation Council Rules , 2026 for

correction of such award on the ground that the Facilitation

Council had no jurisdiction to entertain the claim as JB was

not a supplier within the meaning of the Act of 2006 and

27

therefore, proceedings before the Facilitation Council were not

maintainable.

71. By an order dated April 15, 2024, the Facilitation

Council had ruled that on the basis of the permanent

registration held that JB from January 13, 1981 issued by the

Directorate of Cottage and Small Industries, Government of

West Bengal. JB was a supplier within the meaning of the Act

of 2006.

72. BL had assailed the award dated July 13, 2023 of the

Facilitation Council before the learned City Civil Court at

Calcutta. Records made available before us do not establish

that BL had applied under Section 19 of the Act of 2006 ever

prior to the impugned judgment and order dated February 10,

2025. By the impugned judgment and order dated February

10, 2025, learned Chief Judge, City Civil Court at Calcutta

had set aside the award dated July 13, 2023 passed by the

Facilitation Council. JB has thereafter preferred the appeal

against such judgment and order.

73. By the impugned judgment and order dated February

10, 2025, learned Trial Judge has set aside the Arbitral Award

on the ground it being inadequately stamped and therefore

28

not a valid award in the eye of law and that, pre-deposit of 75

per cent of the awarded amount is not necessary and a

question of fraud is involved. Moreover, learned Trial Judge

has held that JB was not a supplier within the meaning of the

Act of 2006 and that, Facilitation Council acted in violation of

the principles of natural justice by playing a role of councilor

and an arbitrator in contravention of the provisions of the Act

of 1996.

Issues

74. The following issues have fallen for consideration in

the three appeals:-

(i) Is an appeal against the order of restoration of a petition

under Section 34 of the Act of 1996 assailing an award of

the Facilitation Council which cannot be entertained

under Section 19 of the Act of 2006, maintainable under

Section 37 of the Act of 1996?

(ii) Can a petition under Section 34 of the Act of 1996

assailing an award of the Facilitation Council, dismissed

for default before compliance of Section 19 of the Act of

2006, be restored?

29

(iii) Are the provisions for deposit in terms of Section 19 of

the Act of 2006 for entertaining petition under Section 34

of the Act of 1996 mandatory?

(iv) What is the effect of the amended provisions of Section 36

of the Act of 1996 on Section 19 of the Act of 2006?

(v) Is registration under Section 8 of the Act of 2006

mandatory to invoke the jurisdiction of the Facilitation

Council established under the Act of 2006?

Relevant provisions of the two statutes

75. With regard to the first four issues the provisions of

the Act of 1996 and the Act of 2006 which have assumed

significance are as follows:-

Section 36 and 37 of the Arbitration and Conciliation Act,

1996.

“36. Enforcement. (1)Where the time for making an

application to set aside the arbitral award under section 34

has expired, then, subject to the provisions of sub-section (2),

such award shall be enforced in accordance with the

provisions of the Code of Civil Procedure, 1908, in the same

manner as if it were a decree of the court.

(2)Where an application to set aside the arbitral award

has been filed in the Court under section 34, the filing of

such an application shall not by itself render that award

unenforceable, unless the Court grants an order of stay of

the operation of the said arbitral award in accordance with

30

the provisions of sub-section (3), on a separate application

made for that purpose.

(3)Upon filing of an application under sub-section (2) for

stay of the operation of the arbitral award, the Court may,

subject to such conditions as it may deem fit, grant stay of

the operation of such award for reasons to be recorded in

writing:

Provided that the Court shall, while considering the

application for grant of stay in the case of an arbitral award

for payment of money, have due regard to the provisions for

grant of stay of a money decree under the provisions of the

Code of Civil Procedure, 1908.

Provided further that where the Court is satisfied that a

prima facie case is made out that,—

(a) the arbitration agreement or contract which is the basis

of the award; or

(b) the making of the award,

was induced or effected by fraud or corruption, it shall

stay the award unconditionally pending disposal of the

challenge under Section 34 to the award.

Explanation.—For the removal of doubts, it is hereby

clarified that the above proviso shall apply to all court cases

arising out of or in relation to arbitral proceedings,

irrespective of whether the arbitral or court proceedings were

commenced prior to or after the commencement of the

Arbitration and Conciliation (Amendment) Act, 2015.]

37. Appealable orders. - (1) Notwithstanding anything

contained in any other law for the time being in force, an

appeal] shall lie from the following orders (and from no

31

others) to the Court authorised by law to hear appeals from

original decrees of the Court passing the order, namely:

(a) refusing to refer the parties to arbitration under section

8;

(b) granting or refusing to grant any measure under

section 9;

(c) setting aside or refusing to set aside an arbitral award

under section 34.

(2) An appeal shall also lie to a Court from an order of the

arbitral tribunal

(a) accepting the plea referred to in sub-section (2) or sub-

section (3) of section 16; or

(b) granting or refusing to grant an interim measure under

section 17.

(3) No second appeal shall lie from an order passed in

appeal under this section, but nothing in this section shall

affect or take away any right to appeal to the Supreme

Court.”

Section 15 to 19 and 24 of the Act of 2006.

“15. Liability of buyer to make payment.- Where any

supplier supplies any goods or renders any services to any

buyer, the buyer shall make payment therefor on or before

the date agreed upon between him and the supplier in

writing or, where there is no agreement in this behalf, before

the appointed day:

Provided that in no case the period agreed upon between

the supplier and the buyer in writing shall exceed forty-five

32

days from the day of acceptance or the day of deemed

acceptance.

16. Date from which and rate to which interest is payable.

- Where any buyer fails to make payment of the amount to

the supplier, as required under section 15, the buyer shall,

notwithstanding anything contained in any agreement

between the buyer and the supplier or in any law for the

time being in force, be liable to pay compound interest with

monthly rests to the supplier on that amount from the

appointed day or, as the case may be from the date

immediately following the date agreed upon, at three times

of the bank rate notified by the Reserve Bank.

17. Recovery of amount due.- For any goods supplied or

services rendered by the supplier, the buyer shall be liable to

pay the amount with interest thereon as provided under

section 16.

18.Reference to Micro and Small Enterprises Facilitation

Council.- (1) Notwithstanding anything contained in any

other law for the time being in force, any party to a dispute

may, with regard to any amount due under section 17, make

a reference to the Micro and Small Enterprises Facilitation

Council.

(2) On receipt of a reference under sub-section (1), the

Council shall either itself conduct mediation itself or refer the

matter to any mediation service provider under the Mediation

Act, 2023.

(3) The conduct of mediation initiated under this section

shall be as per the provisions of the Mediation Act, 2023.

(4) Where the mediation initiated under sub-section (2) is

not successful and stands terminated without any

33

settlement between the parties, the Council shall either itself

take up the dispute for arbitration or refer it to any institution

or centre providing alternate dispute resolution services for

such arbitration and the provisions of the Arbitration and

Conciliation Act, 1996 shall then apply to the dispute as if

the arbitration was in pursuance of an arbitration agreement

referred to in sub-section (1) of section 7 of that Act.

(5) Notwithstanding anything contained in any other law

for the time being in force, the Micro and Small Enterprises

Facilitation Council or the centre providing alternate dispute

resolution services shall have jurisdiction to act as an

Arbitrator or mediator under this section in a dispute

between the supplier located within its jurisdiction and a

buyer located anywhere in India.]

19. Application for setting side decree, award or order.- No

application for setting aside any decree, award or other

order made either by the Council itself or by any institution

or centre providing alternate dispute resolution services to

which a reference is made by the Council, shall be

entertained by any court unless the appellant (not being a

supplier) has deposited with it seventy-five per cent. of the

amount in terms of the decree, award or, as the case may

be, the other order in the manner directed by such court:

Provided that pending disposal of the application to set

aside the decree, award or order, the court shall order that

such percentage of the amount deposited shall be paid to the

supplier, as it considers reasonable under the circumstances

of the case, subject to such conditions as it deems necessary

to impose.

24. Overriding effect.- The provisions of sections 15 to 23

shall have effect notwithstanding anything inconsistent

34

therewith contained in any other law for the time being in

force.”

Scheme of Sections 15 to 19 and 24

76. The Act of 2006 is later in point of time than the Act of

1996 and has come into effect on October 2, 2006. Act of 2006

has come into being to facilitate and promote the development

and enhance the competitiveness of micro, small and medium

enterprises. The Act of 2006 has prescribed a mechanism for

adjudication of claims of micro, small and medium

enterprises. Chapter V of the Act of 2006 has dealt with issue

of delayed payments to micro and small enterprises. In order

to ensure timely payment of dues of micro and small

enterprises, Chapter V has laid down the mechanism for

conciliation and time line for payment, adjudication of

disputes, and recovery of claims, amongst other. Section 15 to

19 and 24 falls within Chapter V. Section 15 of the Act of

2006 has fixed the outer time limit for a debtor to pay within

45 days of acceptance or deemed acceptance. Section 16 has

imposed interest liability on the debtor failing to pay within

stipulated time under Section 15. Section 17 has prescribed

that, a buyer shall be liable to pay the amount with interest

35

thereon as provide under Section 16, for any goods supply or

services rendered by the supplier.

77. Section 18 of the Act of 2006 has prescribed that, any

party to a dispute, with regard to any amount due under

Section 17, can make a reference to the Facilitation Council.

78. The mechanism under Section 18 of the Act of 2006 is

that, a reference of a dispute with regard to any amount due

under Section 17 has to be made to the Facilitation Council.

Under Sub-Section (2) on receipt of such reference, the

Facilitation Council has to either conduct mediation itself or

refer the matter to any mediation service provider under the

Mediation Act, 2023. Sub-Section (3) has prescribed that the

conduct of the mediation will be in terms of the provisions of

the Act of 2023. Sub-section (4) has provided that where the

mediation is not successful and stands terminated without

out any settlement, the Facilitation Council has to then either

undertake arbitration in respect of the dispute or refer it to

any institution for arbitration. In the eventuality of the

Facilitation Council or the designated institution taking up the

dispute for arbitration, then the provisions of the Act of 1996

will apply to the resolution of the dispute as if the arbitration

36

was in pursuance to an arbitration agreement referred to

under Section 7 of the Act of 1996. Under Sub-section (5) of

Section 18 of the Act of 2006 the Facilitation Council or the

designated institution has been vested with the jurisdiction to

act as an arbitrator or a mediator with regard to a dispute

between the supplier located within its jurisdiction and a

buyer located anywhere in India.

79. When Section 18 of the Act of 2006 has prescribed

that, a dispute referred to arbitration to the Facilitation

Council or to any designated institution would be governed by

the Act of 1996, then, the challenge to such an award would

necessarily be governed by the Act of 1996. The time period

prescribed by challenge to an award under the Act of 1996 as

has been prescribed therein, would necessarily apply. To

appertain the same analogy, on the issue of applicability of the

provisions of Section 36 of the Act of 1996 when, the award

passed by the Facilitation Council has been put into

execution, would do violence to the provisions of Sections 19

and 24 of the Act of 2006.

80. The architecture of challenge to an award passed by

the Facilitation Council or the designated institution of the

37

Facilitation Council, in our understanding is that, a petition

under Section 34 of the Act of 1996 would have to necessarily

comply with the time limit prescribed for filing of such

petition. Having complied with such time-limit, the petitioner

has to comply with Section 19 of the Act of 1996 for the Court

in seisin of such petition to entertain it.

81. In a given case, the petition under Section 34 of the

Act of 1996 may have been filed within the statutory time-

limit prescribed. However, the petitioner therein may not have

complied with the mandatory provisions of Section 19 of the

Act of 2006. In such an eventuality, the Court in seisin of

such petition under Section 34 of the Act of 1996 would have

to dismiss the same as not entertainable in view of the

mandatory provisions of Section 19 of the Act of 2006.

Mandatory nature of Section 19 of 2006 Act

82. Tirupati Steels (supra) has considered the question

whether pre-deposit of 75 per cent of the awarded amount as

per Section 19 of the Act of 2006 in a challenge to the award

under Section 34 of the Act of 1996 is mandatory or not. It

has noticed the earlier decision of the Supreme Court in

Gujarat State Disaster Management Authority (supra) and

38

Goodyear India Private Limited (supra). It has held that,

pre-deposit of 75 per cent of the awarded amount under

Section 19 of the Act of 2006 is a mandatory requirement.

83. Goodyear India Private Limited (supra) has held

that, compliance with Section 19 of the Act of 2006 is

mandatory. However, the Court may allow the pre-deposit to

be made in installments, if it has felt necessary.

84. India Glycols Limited and Anr (supra) has

considered the maintainability of a petition under Article

226/227 of the Constitution of India assailing an award

passed by the Facilitation Council under the Act of 2006. It

has observed that, entertaining a petition under Article

226/227 of the Constitution of India would result in obviating

the compliance with the requirement of pr e-deposit under

Section 19 of the Act of 2006 and that the same would defeat

the object and purpose of the Act of 2006. Essentially, it has

held that, Section 19 of the Act of 2006 is mandatory in

nature.

85. Lakshmi Ratan Engineering Works Ltd. (supra) has

held that, adequate proof of pre-deposit must be available on

39

record to entertain the appeal under Section 9 of the Uttar

Pradesh Sales Tax Act, 1948.

86. The High Courts in Goodyear India Private Limited

(supra), Bharat Heavy Electricals Limited Electric

Division (supra) and the Board of Major Port Authority for

the Shyama Prasad Mookerjee Port (supra) have held that,

provisions of Section 19 of the Act of 2006 are mandatory.

87. The authoritative pronouncements of the Supreme

Court noted above have held that, provisions of Section 19 of

the Act of 2006 are mandatory. Section 19 of the Act of 2006

being mandatory, the same has to be complied with in a

petition under Section 34 of the Act of 1996 in addition to the

time limit prescribed for filing of the same, for such petition to

become entertainable.

Interplay of Section 34 of 1996 Act and Section 19 of

2006 Act

88. Section 34 has prescribed a time limit for challenge of

an award. By virtue of Section 18(4) of the Act of 2006, the

same time limit for the purpose of challenge to an award

passed by the Facilitation Council would apply.

40

89. In addition to the rigours of Section 34 of the Act of

1996 governing challenge to an award, of the Facilitation

Council, Section 19 of the Act of 2006 has imposed an

additional embargo. Section 19 of the Act of 200 6 has

prescribed that, no application for setting aside the award of

the Facilitation Council or award passed by any designated

institution acting under the Act of 2006 shall be entertained

unless the appellant has deposited with the Court 75 per cent

of the amount in terms of the award.

90. Section 19 of the Act of 2006 therefore has prescribed

a pre-deposit of 75 per cent of the award amount for a

challenge to the award to be entertained. The only person

challenging the award of the Facilitation Council or the

designated institution who has been exempted from making

such pre-deposit, is a supplier within the meaning of the Act

of 2006. A supplier within the meaning of the Act of 2006 has

not been required to make a pre-deposit under Section 19 of

the Act of 2006.

Primacy of 2006 Act over 1996 Act

91. Gujarat State Civil Supplies Corporation Ltd.

(supra) has held that, the Act of 1996 governs law of

41

Arbitration and Conciliation whereas the Act of 2006 governs

specific nature or disputes arising between specific categories

of persons to be resolved by following specific process through

specified forum. It has held that, the Act of 2006 being a

special law and the Act of 1996 being a general law, provisions

of the Act of 2006 would have precedence over or prevail over

the Act of 1996. It has observed that, even if the Act of 1996 is

treated as a special law then also, since, the Act of 2006

having been enacted subsequent in point of time would

override the provisions of the Act of 1996 particularly in view

of Section 24 of the Act of 2006.

92. In U.P. State Electricity Board and Anr. (supra)

Supreme Court in the context of Electric Supply Act, 1940

and the Regulations made thereunder, held that, general

provisions should yield to a specific provision. It has observed

that, when general Act is subsequently passed it is logical to

presume that the Parliament has not repealed or modified the

former Special Act unless it appears that the Special Act again

received consideration from the Parliament.

93. In Binani Cements Ltd. (supra) Supreme Court has

explained the maxim generalia specialibus non derogant. It

42

has observed that, such a maxim is not a technical rule and

that, it represents simple common sense and ordinary usage.

94. Ajoy Kumar Banerjee (supra) has laid down that, if

there is a conflict between two statutes when one of them is

special and the other general, then, the test to determine as to

which one would prevail are (i) The Legislature has the right to

alter a law already promulgated through subsequent

legislation (ii) A special law may be altered, abrogated or

repealed by a later general law by an express provision. (iii) A

later general law will override a prior special law if the two are

so repugnant that they cannot co-exists even though no

express provision in that behalf is found in the general law.

(iv) It is only in the absence of a provision to the contrary and

of a clear inconsistency that a special law will remain wholly

unaffected by a later general law.

95. In S. Prakash & Anr. (supra) Supreme Court has

considered the maxim generalia specialibus non derogant

(general things do not derogate from other things). It has

noted that, if any of general provisions is clear and unqualified

it will prevail over special provisions and that, special

provisions must give way to general provisions if the

43

legislature’s intent was to establish the rule of universal

application.

96. Section 36 of the Act of 1996 has prescribed in Sub-

Section (1) that where, the time for making the application to

set aside the Arbitral Award under Section 34 has expired

then, the award shall be enforced in accordance with the Code

of Civil Procedure, 1908.

97. By virtue of Section 24 of the Act of 2006, provisions of

Section 15 to 23 which obviously includes Section 19 would

have primacy over any other law for the time being in force.

98. Consequently, a Court before whom a petition under

Section 34 of the Act of 1996 has been filed, assailing an order

passed by the Facilitation Council or the design ated

institution of the Facilitation Council, would necessarily have

to undertake an exercise under Section 19 of the Act of 2006

so as to determine its entertainability.

Section 37 of 1996 Act, Section 19 of 2006 Act, and

Section 13 of 2015 Act

99. Since Section 18(4) has made the provisions of the Act

of 1996 applicable in respect of award passed by Facilitation

Council or the designated institution, provisions of Section 37

44

of the Act of 1996 stands attracted also. Section 37 of the Act

of 1996 has presc ribed that, notwithstanding anything

contained in any other law for the time being in force, an

appeal would lie from such orders as are prescribed and from

no others. One of the categories from which, appeal has been

allowed under Section 37 of the Act of 1996 is Section 37(1)(c)

which is setting aside or refusing to set aside an arbitral

award under Section 34.

100. Section 19 of the Act of 2006 has prescribed an

embargo of entertaining a petition under Section 34 of the Act

of 1996 unless the prescribed pre-deposit is made, a Court in

seisin of a petition under Section 34 of the Act of 1996

involving an award passed by the Facilitation Council or the

designated institution would necessarily have to undertake an

exercise under Section 19 of the Act of 200 6 when, the

petitioner before is not a supplier within the meaning of the

Act of 2006.

101. Therefore, on a petition under Section 34 of the Act of

1996 being filed assailing an award passed by the Facilitation

Council or the designated institution under the Act of 2006,

the Court has to undertake an exercise under Section 19 prior

45

to deciding to entertain such petition. Section 19 has

therefore, raised an obligation on the Court, akin to that of

Section 3 of the Limitation Act, 1963 which raises an

obligation on the Court to decide on the issue of Limitation

notwithstanding the same not being raised as a defence, to

decide on the entertainibility of the petition under Section 34

of the Act of 1996.

102. A decision in terms of Section 19 of the Act of 1996 by

a Court exercising powers under Section 34 of the Act of 1996

would be a final decision impacting on the entertainability of

the petition under Section 34 of the Act of 1996. A final

decision under Section 19 of the Act of 2006 would have the

effect of either refusing to set aside an arbitral award due to

non-compliance with Section 19 or holding the petition under

Section 34 to be entertainable for the alleged compliance.

103. Chintels India Limited (supra) has noted that the

expression “setting aside or refusing to set aside an arbitral

award” in Section 37(1)(c) of the Act of 1996 does not stand by

itself. The expression has to be read in conjunction with

“under Section 34”. Therefore, an order referring to condone

delay in filing the challenge petition under Section 34 of the

46

Act of 1996 has been held to be appealable under Section 37

of the Act of 1996 . It has considered both Simplex

Infrastructures Ltd. (supra) as well as Essar Constructions

(supra).

104. Chintels India Limited (supra) has held in paragraph

25 that, “effect doctrine” is part and parcel of the statutory

provisions for appeal under Section 37 of the Act of 1996. It

has held that, if the effect of the order under appeal under

Section 37 of the Act of 1996 is either setting aside of an

award or refusal to set aside an award then, such an order is

appealable. In the facts of that case, an appeal against an

order refusing to condone the delay in filing application under

Section 34 of the Act of 1996 has been held to be

maintainable under Section 37(1)(c) of the Act of 1996 as such

an order amounts to order refusing to set aside the award.

105. An award passed by the Facilitation Council or its

designated institution has its origin in Section 18 of the Act of

2006. Whereas under Section 7 of the Act of 1996, there must

be a written agreement between the parties to refer the

disputes to arbitration, Section 18 of the Act of 2006 has

made an exception thereto. Under Section 18 of the Act of

47

2006, should the criteria specified therein be satisfied, then,

the claims have to be referred to the Facilitation Council. Once

such a reference has been made, the provisions of the Act of

1996 govern the procedure for deciding the reference.

Substantive rights created by the Act of 2006 continues to

remain with the party to the arbitration as has been vested by

the Act of 2006. For example right to receive interest at the

rate as has been prescribed under Section 16 of the Act of

2006 continues to remain vested with the party entitled

thereto notwithstanding anything contrary in the Act of 1996.

106. The distinctiveness of the award of the Facilitation

Council continues to remain when it is sought to be

challenged in the Civil Court. Distinctiveness has been

enshrined in Section 19 of the Act of 2006 which requires a

mandatory pre-deposit for the petition under Section 34 of the

Act of 1996 being entertained by the Court concerned. Its

distinctive feature is unique to an award of the Facilitation

Council or its designated institution acting in terms of the Act

of 2006.

107. Section 19 of the Act of 2006 has created a substantive

right in favour of the award holder. In other words, in the

48

event, a Court in seisin of a petition under Section 34 of the

Act of 1996 mis-construes and mis-applies the provisions of

Section 19 of the Act of 2006 and proceeds to deal with the

challenge petition, the order refusing to adhere to Section 19

of the Act of 2006 would be appealable under Section 37(1)(c)

of the Act of 1996 as it impacts a substantive right of one of

the parties with the Court not refusing to set aside the award.

Non-compliance with Section 19 of the Act of 2006 mandates

the Court exercising, jurisdiction under Section 34 of the Act

of 1996 to refuse to set aside the award as the challenge to the

award is not entertainable.

108. Section 19 of the Act of 2006 which has imposed the

embargo on entertainability of the challenge under Section 34

of the Act of 1996, is an additional exercise under Section 34

of the Act of 1996. It is a requirement independent of the

provisions of the Act of 1996 and has its place in the Act of

2006. Validity, legality and sufficiency of the challenge under

Section 34 of the Act of 1996 would only arise when the

challenge petition has complied with the requirements of

Section 19 of the Act of 2006.

49

109. In the scenario of a Court exercising powers under

Section 34 of the Act of 1996 in which a challenge petition

assailing the award of the Facilitation Council or its

designated institution, has been filed, such Court in order to

entertain such a petition has to arrive at a jurisdictional fact

under Section 19 of the Act of 2006. Such jurisdictional fact

being that, the petitioner filing the challenge under Section 34

of the Act of 1996 has deposited 75 per cent of the awarded

amount with the Court to make the petition entertainable.

110. The absence of the jurisdictional fact of deposit of 75

per cent of the awarded amount in terms of Section 19 of the

Act of 2006, renders such a petition not entertainable.

111. In Chintels India Limited (supra) Section 5 of the Act

of 1996 has been read and construed to mean that a Court

should interpret the provisions of the Act of 1996 no narrower

than warranted by the language of the provisions of the Act of

1996. It has interpreted the scope of the appeal under Section

37 of the Act of 1996. It has held that, it is not the provincial

duty of the Court in light of Section 5 of the Act of 1996 to

further limit the already limited right of appeal under Section

50

37 by excluding appeals which are in fact provided for, given

the language of Section 37 of the Act of 1996.

112. Chintels India Limited (supra) has applied the “effect

doctrine” to construe the scope and ambit of an appeal under

Section 37 of the Act of 1996. Since, compliance of Section 19

of the Act of 2006 is a mandatory requirement impacting the

entertainability of a petition under Section 34 of the Act of

1996, a decision rendered by the Court with regard to the

Section 19 of the Act of 1996 impacts the applicability of

Section 19 of the Act of 1996 to a petition under Section 34 of

the Act of 1996, and would therefore be appealable as, the

same falls within the scope and ambit of an appeal under

Section 37 of the Act of 1996. A decision on the

entertainability of a petition under Section 34 of the Act of

1996 on the anvil of Section 19 of the Act of 2006 would be a

decision to set aside or refusing to set aside the Arbitral Award

within the meaning of Section 37 of the Act of 1996.

113. Habban Shah (supra) has answered the issue as to

whether the decree for specific performance passed by the

Court of the first instance directing execution of a sale deed

on the deposit of the balance sale consideration within the

51

stipulated time would be inexecutable by reason of the

balance consideration not being deposited within the time

stipulated. It has answered such issue by holding that such a

decree became inexecutable on account of non-compliance of

the condition to deposit the balance sale consideration within

the time stipulated under the decree.

114. In respect of commercial disputes within the meaning

of Section 2(1)(c) of the Commercial Courts Act, 2015, appeals

are governed by Section 13 thereof. Section 13 has made

Section 37 of the Act of 1996 applicable so far as arbitration

proceedings are concerned.

115. We have however held that exercise of powers under

Section 19 of the Act of 2006 is an additional requirement for

entertaining the petition under Section 34 of the Act of 1996

as unless mandatory pre-deposit under Section 19 is made,

the petition under Section 34 of the Act of 1996 is not

entertainable.

116. Given the architecture of challenge to an award passed

by the Facilitation Council or its designated institution, the

irresistible conclusion is that, compliance with Section 19 of

the Act of 2006 has to be mandatorily made in addition to the

52

prescribed time limit for challenge being complied with. An

order entertaining a petition under Section 34 of the Act of

1996 without compliance with Section 19 of the Act of 2006

would amount to the Court not refusing to set aside the award

and would therefore be appealable under Section 37(1)(c) of

the Act of 1996.

Intersectionality of 1996 Act, 2006 Act and 2015 Act on

the right to appeal.

117. Compliance with Section 19 of the Act of 2006 is

mandatory for a petition under Section 34 of the Act of 1996

to become entertainable. By virtue of Section 19 of the Act of

2006 requirement of pre-deposit is a jurisdictional fact which

must mandatorily exist for the Court to entertain a petition

under Section 34 of the Act of 1996. Existence of this

jurisdictional fact is in addition to the requirement of

compliance of the time limit prescribed for filing a petition

under Section 34 of the Act of 1996. Compliance with Section

19 of 2006 is an obligation post filing of the petition under

Section 34 of the Act of 1996 and is in addition to the

mandate of time limit prescribed under Section 34 of the Act

of 1996.

53

118. Requirement to comply with the mandate under

Section 19 of the Act of 2006 is a prescription under the Act of

2006. Court while assessing the existence of the jurisdictional

fact as to whether requisite compliance of pre-deposit exists or

not is called upon to exercise and does exercise a power under

Section 19 of 2006 to arrive at a finding as to whether or not

to entertain the petition under Section 34 of the Act of 2006.

119. Act of 2006 has primacy over the Act of 1996. Act of

2006 does not prescribe an appeal directed against its

exercise. Given the fact that the Act of 2006 has primacy and

does not prohibit an appeal against an order under Section

19, and given the effect of the order Section 19 of the Act of

2006 reading a prohibition of an appeal in respect of such an

order would militate against the intersectionality of the two

provisions of the two statutes.

120. Inasmuch as Section 13 of the Act of 2015 prescribe

an appeal under Section 34 of the Act of 1996 in respect of

commercial disputes, on the parity of the reasoning of an

appeal being maintainable against an order under Section 19

of the Act of 2006, Section 13 of the Act of 2015 should be

read as not to prohibit the appeal.

54

121. An exercise under Section 19 of the Act of 2006

attaches finality on the issue of entertainability of the petition

under Section 34 of the Act of 1996. Such an order is

therefore an order deciding to entertain or not to entertain a

petition to set aside an award. Such an order would resonate

on the right to appeal under Section 37 of the Act of 1996 for

refusing to set aside an award.

122. Interpreting Section 37 of the Act of 1996 and Section

13 of the Act of 2015 to deny a right of appeal would militate

against the objectives of the Act of 2006 which provides for an

architecture of expeditious recovery of money owed to an

entity governed by such Act of 2006.

Effect of Amendment of Section 36 of the 1996 Act on

Section 19 of 2006 Act

123. Amendment of Section 36 of the Act of 1996

subsequent to Section 19 of the Act of 2006 coming into force

has not altered the mandatory nature of compliance with

Section 19 of the Act of 1996 in respect of a challenge petition

under Section 34 of the Act of 1996 directed against an award

passed by the Facilitation Council or the designated

institution of the Facilitation Council. Section 36 of the Act of

55

1996 has been amended with retrospective effect from October

23, 2015. Relevant provisions of the amended Section 36 of

the Act of 1996 which has been pressed into service before us

is the proviso and explanation appended to Section 36 (3) of

the Act of 1996. By such proviso, the Court while considering

a request for enforcement of the arbitral award, may grant

unconditional stay of enforcement thereof, in the event, it is of

the prima facie view that, the award was tainted by fraud or

corruption. The explanation has made the proviso applicable

to all Court cases arising out or in relation to arbitral

proceedings, irrespective of whether the arbitral or Court

proceedings were commenced prior to or after the amendment.

124. Section 36 of the Act of 1996 is involved in a petition

under Section 34 of the Act of 1996 directed against an award

of the Facilitation Council or its designated institution then

such, a Court has to necessarily entertain a petition under

Section 34 of the Act of 1996 first in order to assess whether

or not the award impugned before it stood vitiated by fraud or

corruption in order to arrive at a prima facie finding so as to

stay its enforcement. An exercise under Section 36 of the Act

of 1996 cannot be undertaken by a Court in seisin of a

56

petition under Section 34 of the Act of 1996 in the event, such

Section 34 petition has not overcome the rigours of Section 19

of the Act of 2006 when, the challenge in such petition is an

award passed by the Facilitation Council or its designated

institution. A petition under Section 34 of the Act of 1996

must necessarily have to be made entertainable within th e

meaning of Section 19 of the Act of 2006 for such Court to

exercise powers under Section 36 of the Act of 1996 if

requested to do so.

125. Section 36 of the Act of 1996 has been amended in

order to obviate the argument of automatic stay of an arbitral

award. It has been amended in order to provide the

circumstances under which, stay of enforcement of an award

may be granted. One of the grounds that has been recognised

for grant of stay of enforcement of the arbitral award is if the

Court is of the view that, the arbitral award suffers from the

vice of it being obtained by fraud or corruption.

126. In our view, there is no inconsistency between the

amended Section 36 of the Act of 1996 and Section 19 of the

Act of 2006. Section 36 of the Act of 1996 comes into

operation only when, there is a valid petition under Section 34

57

of the Act of 1996 pending which can be entertained. Section

36 of the Act of 1996 has no manner of application to an

invalid petition under Section 34 of the Act of 1996. For

example, if the Section 34 petition is beyond the time limit

prescribed for its institution. Section 36 of the Act of 1996

cannot be pressed into service for stay of enforcement of the

award. Any other constitution will imitate against the adage of

minimal curative instruction by Court in respect of arbitration

and award.

127. Section 36 of the Act of 1996 has been introduced later

than Section 19 of the Act of 2006. While Section 36 of the Act

of 1996 has been amended and introduced in the Act of 1996,

no provision has been made in Section 36 of the Act of 1996

dealing with the scenario prescribed under Section 19 of the

Act of 2006 nor has the Act of 2006 been amended so as to

provide that Section 36 of the Act of 1996 would prevail.

128. Applying the ratio of Ajoy Kumar Banerjee (supra) to

the interplay of Section 19 of the Act of 2006 and the

amended provisions of Section 36 of the Act of 1996, it cannot

be said that, Section 36 of the Act of 1996 has primacy over of

the Act of 2006 or that, compliance with of the Act of 2006 is

58

not required should, the petitioner under Section 34 of the Act

of 1996 is able to demonstrate prima facie fraud or corruption

in obtaining the award. Such issues of corruption and fraud

can only be raised in a challenge petition to an award

governed under the Act of 2006 if such challenge petition has

satisfied the requirement of Section 19 of the Act of 2006.

129. A petitioner challenging an award passed by the

Facilitation Council or the designated institution failing to

comply with Section 19 of the Act of 2006 ma y not be

remediless when, the issue of enforcement of such award

arises. Such a petitioner may nonetheless have recourse to

Section 47 of the Code of Civil Procedure 1908 to the extent

permissible by it, as has been recognised in Electrosteel

Steel Ltd (supra) Cholamandalam Investment and

Finance Company Ltd (supra) and Gowra Petrochem

Private Limited (supra).

130. Godrej Sara Lee Ltd (supra) has explained the

difference between a petition which is maintainable and

entertainable. It has held that, a petition may be found to be

maintainable but nonetheless may also be held not to be

entertainable. In the scenario of Section 19 of the Act of 2006,

59

a petition under Section 34 of the Act of 1996 may be filed but

would remain not entertainable without compliance with

Section 19 of the Act of 2006.

131. A petition challenging an award of the Facilitation

Council or its designated institution, if dismissed for default

prior to compliance with the provisions of Section 19 of the

Act of 2006, remains not entertainable when, it is dismissed

for default and when, an application is made for its

restoration. While adjudicating on an application for

restoration, the Court necessarily has to take into

consideration the factum of compliance or non-compliance

with Section 19 of the Act of 2006 as the case may be. It is

more so in view of the object of the Act of 2006 which has

postulated promotion, development and enhancement of the

competitiveness of the enterprises governed under the Act of

2006.

132. Section 19 of the Act of 2006 is a measure to secure

the claim enterprise governed under the Act of 2006 so that,

such an enterprise may have the benefit of the award

immediately on failure of the challenge thrown there to. The

provisions are such that, it discourages a routine challenge in

60

order to delay the enforcement of the award, if possible.

Keeping in view such salutary provisions, a Court considering

a petition for restoration of a Section 34 challenge without

compliance with Section 19 of the Act of 2006 must not

restore the Section 34 petition as, the same would remain not

entertainable. Otherwise in effect, the Court would be

restoring a petition under Section 34 of the Act of 1996 which

it cannot entertain. An enterprise governed by the Act of 2006

would then be precluded from enjoying the usufructs of an

award which it would have otherwise been entitled to but for a

restoration of a petition which is not entertainable. Such a

course of action would not advance the course of justice and

in our view would militate against the avowed objectives of the

Act of 2006.

Compliance of Section 19 of 2006 Act in AO COM 13 of

2026 and AO COM 20 of 202 6

133. Supplementary affidavit affirmed on February 27, 2026

in support of the IA GA No. 1 of 2024 and IA GA No. 2 of 2024

in AP COM 382 of 2024 has been pressed into service by PHE

to contend that, Section 19 of the Act of 1996 had been

invoked on behalf of PHE for the first time.

61

134. We are unable to agree with the contention of the PHE

that, PHE had invoked Section 19 of the Act of 2006 in its

challenge petition under Section 34 of the Act of 1996.

Supplementary affidavit affirmed on February 27, 2026 which

has now been contended to be an application under Section

19 of the Act of 2006 does not contain any pleadings with

regard to Section 19 of the Act of 2006 nor does it refer to

Section 19 of the Act of 2006 at all. In fact, what it does, is

seek permission of the Court to secure the amount in terms of

the order dated December 18, 2023.

135. Order dated December 18, 2023 was not an exercise

under Section 19 of the Act of 2006 and the same has not

been contended to be so by PHE. Therefore, in the appeal,

PHE cannot be heard to contend that, it had applied under

Section 19 of the Act of 2006 for the purpose of securing the

award, and that, such an exercise was undertaken by the

order dated December 18, 2023. PHE cannot be allowed to

approbate or re-probate on the issue of invocation of Section

19 of the Act of 2006.

136. Learned Single Judge had passed the order d ated

December 18, 2023 when invited to do so under Section 36(4)

62

of the Act of 1996. With the deepest of respect, Section 36(4)

could have been invoked only when there is a petition under

Section 34 of the Act of 1996 which is entertainable. On

December 18, 2023 the learned Single Judge did not have a

petition under Section 34 of the Act of 1996 which was

entertainable for invoking Section 36(4) of the Act of 1996.

137. In such circumstances, PHE not having invoked

Section 19 of the Act of 2006 at all, question of, the petition

under Section 34 of the Act of 1996 of PHE being

entertainable does not arise. Since such petition is not

entertainable, question of restoring such a petition also does

not arise. PHE could not have invited the Court to restore the

Section 34 petition without undertaking an exercise under

Section 19 of the Act of 2006 simultaneously as such an

exercise was never done.

138. Not having invoked Section 19 of the Act of 2006 at all,

PHE had allowed its petition under Section 34 of the Act of

1996 to remain not entertainable on the date of its dismissal

for default as also on the date when it applied for its

restoration including the dates on which, the two impugned

orders were passed. Impugned orders dated March 31, 2026

63

and May 13, 2026 could not have been passed in a proceeding

which was not entertainable.

139. PHE therefore cannot obtain a relief on the award

passed by the Facilitation Council impugned in the petition

under Section 34 of the Act of 1996 filed by it after not having

taken any steps to make such petition entertainable.

Compliance of Section 19 of the 2006 Act in FMAT

(ARBAWARD) No. 19 of 2025

140. Our understanding of the materials that have been

placed before us in FMAT (ARBAWARD) 19 of 2025 is that,

compliance with Section 19 of the Act of 2006 has never been

done at the behest of the parties therein. Learned Trial Judge

has considered the petition under Section 34 of the Act of

1996 without having the petitioner filing such petition to

comply with Section 19 of the Act of 2006. Learned Trial

Judge therefore could not have entertained such a restoration

petition without compliance of Section 19 of the Act of 2006.

Learned Trial Judge has erred in entertaining the petition

under Section 34 of the Act of 1996 which it could not have

done. Learned Trial Judge has erred in passing the impugned

64

judgment and order setting aside the award in a petition

which was not entertainable.

Answer to Issue No. (i)

141. In view of the discussions above, issue no (i ) is

answered by holding that, an appeal against the order of

restoration of a petition under Section 34 of the Act of 1996

assailing an award of the Facilitation Council or its designated

institution which cannot be entertained under Section 19 of

the Act of 2006 is maintainable under Section 37(1)(c) of the

Act of 1996.

Answer to Issue No. (ii)

142. Issue No. (ii) is answered by holding that, a petition

under Section 34 of the Act of 1996 assailing an award of the

Facilitation Council or its designated institution, dismissed for

default before compliance with Section 19 of the Act of 2006

cannot be restored without a simultaneous compliance with of

the Act of 2006. In other words, compliance with Section 19 of

the Act of 2006 is a mandatory requirement for considering

the application for restoration, assuming good grounds for

restoration have been made out. We hasten to add that, we

are not suggesting that, simplicitor by compliance with

65

Section 19 of the Act of 2006 would lead to restoration even in

the event of failure of adequate grounds being shown for

restoration. In other words, the restoration application must

have adequate grounds for restoration and also comply with

Section 19 of the Act of 2006 with compliance with Section 19

being a pre-requisite.

Answer to Issue No. (iii)

143. Issue No. (iii) is no longer res integra in view of the

authoritative pronouncements of Tirupati Steels (supra),

Gujarat State Disaster Management Authority (supra) and

Goodyear India Private Limited (supra) . Compliance with

Section 19 of the Act of 2006 is mandatory.

Answer to Issue No. (iv)

144. Issue No. (iv) is answered by holding that, the

amended provisions of Section 36 of the Act of 1996 does not

impeach upon the mandatory nature of Section 19 of the Act

of 2006 in any manner or form.

66

Answer to Issue No. (v)

145. In the facts and circumstances of the three appeals

before us, in view of our decision in the first 4 issues, issue

No. (v) has lost relevance and therefore not decided by us.

Directions

146. Learned Single Judge, in AO COM 20 of 2026 has

condoned the delay in filing the restoration petition by the

order dated March 31, 2026 and has restored the petition

under Section 34 of the Act of 1996 by the order dated May

13, 2026 which is being assailed in AO CO M 13 of 2026.

Learned Single Judge could not have done either of them in

view of the non-compliance by the petitioner with the

provisions of Section 19 of the Act of 1996.

147. In the facts and circumstances of the two appeals

being AO COM 13 of 2026 and AO COM 20 of 2026, learned

single Judge had passed an order requiring pre -deposit of

75% of the award amount which, PHE had failed to comply

with. According to PHE it had never undertaken in exercise

under Section 19 of the Act of 2006 save and except, filing a

supplementary affidavit in the restoration application inviting

the Court to undertake the exercise under Section 19 of the

67

Act of 2006. A supplementary affidavit cannot be a substitute

of a substantive petition with appropriate relief sought for. In

the proceedings under Section 34 of the Act of 1996 leading to

the two appeals being AO COM 13 of 2026 and AO COM 20 of

2026, PHE had never filed any petition under Section 19 of

the Act of 2006.

148. Conduct of PHE subsequent to its filing of the petition

under Section 34 of the Act of 1996 does not inspire much

confidence. Despite the order dated December 18, 2023 of the

learned Single Judge requiring PHE to deposit 75% of the

awarded amount, within the stipulated time, and granting

liberty to MTL to execute the award on failure of PHE to

deposit 75% within the stipulated time, PHE not only failed to

deposit such amount but also suffered orders in the execution

proceedings and made part payments of the awarded amount.

149. AO COM 13 of 2026 and AO COM 20 of 2026 are

allowed. Impugned orders dated March 31, 2026 and May 13,

2026 are set aside. AP No. 763 of 2023 is dismissed as not

entertainable in terms of Section 19 of the Act of 2006.

150. FMAT (ARBAWARD) 19 of 2025 is allowed. Impugned

judgement and order dated February 10, 2025 is set aside.

68

Petition under Section 34 of the Act of 1996 leading to the

impugned judgement and order dated February 10, 2025 is

dismissed as not entertainable for not having complied with

Section 19 of the Act of 2006.

[DEBANGSU BASAK, J.]

151. I agree.

[ARYAK DUTT, J.]

Later:-

Learned Advocate appearing for the PHE seeks stay of

operation of the judgment and order.

Prayer for stay is opposed on behalf of MTL.

Considering the fact that, the restoration application was

allowed two years after the date of dismissal for default and in

view of our reasoning as contained in the judgment and order, we

are not minded to grant any stay, as prayed for.

[DEBANGSU BASAK, J.]

I agree.

[ARYAK DUTT, J.]