Manish Pitale, J.

1. Heard learned counsel for the parties.

2. By this application, the applicant (original respondent) is seeking direction for release of the amount deposited by the petitioner in this Court pending hearing of the arbitration petition.

3. In the present case, the petitioner has filed arbitration petition under Section 34 of the Arbitration and Conciliation Act, 1996, being aggrieved by award dated 2/5/2018 passed by a sole arbitrator, whereby the petitioner was directed to pay specific amount with interest to the respondent.

4. The petition is still at admission stage although more than five years have lapsed from the date of the arbitral award. It is relevant to note that the petition was taken up for hearing and disposal at admission stage. It was extensively heard but on 11/12/2018, this Court had to adjourn the hearing of the petition as it was found that the hearing may not conclude, considering that it was a day before the Court was to close for vacation.

5. Thereafter, the petition remained on the admission board of this Court. On 16/9/2021, a notice of motion filed by the petitioner for granting unconditional stay was taken up for consideration. Upon hearing the counsel, this Court found that no case was made out for grant of unconditional stay, particularly because the award, at least prima facie, appeared to be passed purely on facts and the evidence led by the parties. This Court further observed that prima facie the arguments canvassed on behalf of the petitioner were unimpressive and no case was made out for grant of unconditional stay. The notice of motion was disposed of by directing the petitioner to deposit an amount of Rs.18 Crores in this Court. By the very same order dated 16/9/2021, this Court granted liberty to the respondent to withdraw the said amount upon furnishing bank guarantee to be renewed from year to year. It is an admitted position that since the respondent could not furnish the bank guarantee, the amount could not be withdrawn. The same is lying in this Court, invested as per standard practice.

6. The petition came up for further consideration on various dates, but it could not be taken up for hearing and final disposal. It was directed to be listed on 25/4/2023 for hearing / disposal, but it was adjourned to 27/4/2023. On the said date also, considering the number of matters seeking urgent ad-interim reliefs, listed before this Court, it was found that even if the hearing of the petition commences, it would be difficult to complete the hearing, in the light of the fact that the vacation was round the corner.

7. At this stage, learned Senior counsel appearing for the respondent submitted that although the petition has remained pending at admission stage for more than five years, the respondent is deprived of the fruits of the award. It was emphasized that the arbitration proceedings itself took about four years and that the respondent has been waiting to see the colour of money for almost 10 years. It was submitted that in these circumstances, this Court may consider allowing withdrawal of at least part of the amount on appropriate undertaking to be furnished on behalf of the respondent, in the interest of justice. The said prayer was vehemently opposed on behalf of the petitioner. In that light, the learned Senior counsel appearing for the respondent submitted that an application for withdrawal of the amount on undertaking can be filed before this Court. Accordingly, the matter was kept for hearing today with liberty to the respondent to file such application and opportunity to the petitioner to file reply affidavit to the same. The present application came to be filed in this backdrop. The reply affidavit on behalf of the petitioner was e-filed yesterday, but perhaps it could not be taken on record. The petitioner is granted liberty to ensure that the reply affidavit is placed on record within one week from today.

8. Mr. Jagtiani, learned Senior counsel appearing for the applicant submitted that considering the aforesaid circumstances highlighted on behalf of the applicant (original respondent), this Court may consider granting permission to withdraw the amount deposited in this Court or at least part of the amount on suitable undertaking to be filed on behalf of the respondent. It was submitted that the respondent is covered under the category of a Micro, Small and Medium Enterprises Unit. It was submitted that the nature of business of the respondent is such that it operates on low profit margins and depends on cash flow to sustain its operations. It was submitted that in such circumstances, while the hearing of the present petition may take long, this Court in the interest of justice, may consider granting relief as aforesaid to the respondent. It was further submitted that the respondent is constrained to file the present application, for the reason that it is unable to arrange for the bank guarantee as a pre-condition for withdrawal of the said amount. It is further submitted that the condition of furnishing bank guarantee in the facts and circumstances of the present case is an extremely onerous condition, which the respondent is unable to satisfy. On this basis, it is submitted that this Court may consider granting relief in the present application.

9. On the other hand, Mr. Setalvad, learned Senior counsel appearing for the petitioner vehemently opposed the prayer made in the application. It is submitted that upon application of Section 36(2) of the aforesaid Act and the position of law as clarified in various judgments, this Court does not have power to give the relief sought in the present application. It is submitted that in the absence of any application seeking review of the order dated 16/9/2021, passed by this Court disposing off the notice of motion, the present application, cannot be considered. It is further submitted that the purpose of direction to deposit the amount pending consideration of the petition is to ensure that the money is not available to either party and its disbursal is subject to the result of the challenge to the arbitral award in the form of the present petition. It was submitted that Courts have been issuing directions to ensure that if an award creditor desires to withdraw the amount, it is properly secured so as to ensure that if the challenge to the arbitral award succeeds, the amount is brought back to the Court. According to the learned Senior counsel appearing for the petitioner, instead of entertaining and passing any order in the present application, the petition itself can be heard finally at the earliest.

10. Reliance was placed on judgment of the Calcutta High Court in Damodar Valley Corporation Vs. Reliance Infrastructure Limited 2022 SCC Online Cal 553 and judgment of the Supreme Court in the case of P.S.L. Ramanathan Chettiar and Ors. Vs. O.R.M.P.R.M. Ramanathan Chettiar AIR 1968 SC 1047 [LQ/SC/1968/63] .

11. Having heard the learned counsel for the rival parties, this Court has considered the material on record, the chronology of events and the position of law brought to the notice of this Court. There can be no serious dispute about the fact that after disputes arose between the parties, the respondent invoked arbitration. It took about four years of the arbitral proceedings to ultimately result in an award in favour of the respondent. The award was passed on 2/5/2018. The petition under Section 34 of the said Act was filed in the year 2018 and it is still pending at admission stage for more than five years.

12. As noted hereinabove, a learned Single Judge of this Court heard the petition extensively in December 2018, perhaps with the intention of disposing of the same at the admission stage. But, the hearing could not be completed and thereafter, the petition has remained pending at admission stage for all these years. In the interregnum, the order dated 16/9/2021, was passed on the notice of motion. This Court rejected the prayer made on behalf of the petitioner for granting unconditional stay to the arbitral award. It was observed, prima facie that this Court was unimpressed with the arguments canvassed on behalf of the petitioner and that the award appeared to be passed purely on facts and the evidence led by the parties. It is also now a recognized position of law that post amendment of the aforesaid Act in the year 2015 and the law clarified in that regard by the Supreme Court in the case of SSangyong Engineering and Construction Co. Ltd. Vs. National Highways Authority of India (NHAI) 2019:INSC:647 : (2019) 15 SCC 131 [LQ/SC/2019/858 ;] and this Court in Union of India Vs. Recon Mumbai 2020(6) Mh.L.J. 509, the scope for interference in arbitral awards is narrowed down.

13. Directions were issued for listing of the petition for final disposal on 25/4/2023 at 2.30 p.m. but the hearing was adjourned to 27/4/2023. On 27/4/2023, a request was made on behalf of the respondent that this Court may consider allowing withdrawal of at least part of the amount on appropriate undertaking to be given by the respondent.

14. In the present application, the applicant (original respondent) has sought to explain as to the circumstances in which it is constrained to move the present application. It is clearly stated that the respondent is unable to arrange for the bank guarantee on the ground that the business of the respondent is operated on low profit margins and depends on cash flow to sustain its operations. It is stated on behalf of the respondent that appropriate undertaking can be placed before this Court for withdrawal of at least part of the awarded amount, which will give some relief to the applicant (original respondent), in whose favour the arbitral award was passed as far back as on 2/5/2018.

15. Despite the vehement opposition on the part of the petitioner, this Court is of the opinion that in the facts and circumstances of the present case, particularly when the final hearing and disposal of the petition is not taking place due to circumstances beyond control of the parties, sufficient ground is made out for entertaining the present application.

16. This Court is unable to accept the contention raised on behalf of the petitioner that in the light of the order dated 16/9/2021, passed by this Court in notice of motion and considering the scope of Section 36(2) of the said Act, this Court is powerless to grant relief in the present application. The order dated 16/9/2021 was an interim order and it can be varied, specifically in the interest of justice and in the light of subsequent events. On the same ground, this Court is inclined to reject the contention raised on behalf of the petitioner that in the absence of an application for review of the order dated 16/9/2021, this Court cannot consider the prayer made in the present application.

17. As noted hereinabove, the respondent is constrained to file the present application, in the light of events that have occurred after 16/9/2021. This Court can certainly entertain such an application, considering the facts and circumstances of the case and in the interest of justice.

18. In so far as reliance placed on judgment of the Calcutta High Court and aforementioned judgment of the Supreme Court is concerned, suffice it to say that the facts and circumstances of the individual case would have to be appreciated to take appropriate view in the matter, in the interest of justice.

19. This Court is of the opinion that the anxiety of the petitioner can be addressed by issuing appropriate directions to the respondent in the present case, as regards the manner in which the amount directed to be withdrawn, can be brought back with appropriate interest. This Court is of the opinion that pending hearing of the petition, the respondent can be permitted to withdraw at least part of the amount on an undertaking that if the petition is allowed, the amount so withdrawn shall be brought back by the respondent with interest as may be directed by this Court at the relevant time. This Court is convinced that in such circumstances, where the petition challenging an arbitral award remains pending before the Court for years together and the award creditor is deprived of the fruits of such award, directions can be issued for withdrawal of at least part of the amount, in the interest of justice.

20. In view of the above, the application is partly allowed. The respondent is permitted to withdraw an amount of Rs.10 Crores, subject to furnishing an undertaking that in the event the petition is allowed, the respondent shall bring back the amount so withdrawn alongwith interest that this Court may direct at the time when the petition is finally disposed of.

21. At this stage, the learned Senior counsel appearing for the petitioner sought stay of the order passed today. But, this Court is of the opinion that in view of the facts and circumstances noted hereinabove and the backdrop in which the present application is partly allowed, no ground is made for stay of the order passed today. Hence, request for stay is rejected.