The Administration Of Andaman And Nicobar Islands v. M/S Hcl Infotech Limited

IN THE HIGH COURT AT CALCUTTA

CIVIL REVISIONAL JURISDICTION [CIRCUIT BENCH AT PORT BLAIR] PRESENT: THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA CO/64/2025 THE ADMINISTRATION OF ANDAMAN AND NICOBAR ISLANDS ... PETITIONER VS.

M/S HCL INFOTECH LIMITED ... OPPOSITE PARTY For the petitioner : Mr. Rakesh Kumar For the Opposite party : Mr. Arul Prasanth Mr. Amitesh Chandra Mishra Ms. Tishya Pandey Heard on : December 10, 2025 Judgment on : December 10, 2025 HIRANMAY BHATTACHARYYA, J.

1.

This application under Article 227 of the Constitution of India is at the instance of the Award Debtor and is directed against an order dated June 27, 2025 passed by the learned District Judge, Andaman and Nicobar Islands at Port Blair in Other Suit No.7 of 2024.

2.

By the order impugned, the application under section 36(2) of the Arbitration and Conciliation Act, 1996 (for short "1996 Act") stood rejected.

3.

The petitioner filed an application under section 34 of the 1996 Act challenging the arbitral award dated July 16, 2024 which was subsequently rectified by an award dated October 04, 2024 passed in an arbitration proceeding between the Administration of Andaman and Nicobar Islands vs. M/s HCL Infotech Limited. The said application under section 34 of the 1996 Act was registered as Other Suit No.7 of 2024.

4.

The petitioner filed an application under section 36(2) of the 1996 Act in Other Suit Nno.7 of 2024 praying for stay of operation of the aforesaid arbitral award.

5.

The learned District Judge rejected the application under section 36(2) of the 1996 Act on the ground that since no execution case is pending before that Court, the question of staying of execution of the award does not arise and such petition should be filed only in the execution case.

6.

Mr.Kumar, the learned advocate appearing for the petitioner submits that mere filing of an application under section 34 of the 1996 Act does not operate as a stay of operation of the arbitral award.

7.

In support of his contention that the application under section 36(2) of the 1996 Act can be filed before the District Court where the application under section 34 of the 1996 Act is pending, Mr. Kumar, places reliance upon a decision of the Hon'ble Supreme Court in the

case of International Seaport Dredging Pvt Ltd. vs. Kamarajar Port Limited reported at 2024 INSC 827.

8.

The learned advocate appearing for the opposite party submits that in the meantime, the award has already been put into execution given rise to OMP(Enf)(COMM) 60/2025 and the same is pending before the Delhi High Court. The learned advocate further submits that the arbitral award directed payment of money by the petitioner to the opposite party. By placing reliance upon the provision of subsection (3) of Section 36 of the 1996 Act, the learned advocate appearing for the opposite party submits that the provision laid down under Order XLI Rule 5 of the Code of Civil Procedure shall squarely apply for passing an order of stay of an arbitral award directing payment of money.

9.

Heard learned advocate appearing for the parties and perused the materials placed.

10.

It appears from the submissions made by the learned advocate for the opposite party that the award has already been put into execution and the execution case is pending.

11.

Sub-section (2) of Section 36 of the 1996 Act states that 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 the provision of sub-section (3) on a separate application made for that purpose.

12.

On a bare reading of the provision laid down under section 36(2) of the 1996 Act, this Court is of the considered view that a separate application for stay of operation of the arbitral award shall have to be filed.

13.

The expression "court" used in second limb of sub-section (2) of Section 36 would necessarily imply the court where an application under section 34 of the 1996 Act is pending.

14.

Thus, this Court holds that the Court where an application under section 34 of the 1996 Act for setting aside the arbitral award is pending has jurisdiction to entertain an application for stay of operation of the arbitral award.

15.

To the mind of this Court, the learned District Judge failed to interpret the provision of sub-section (2) of Section 36 of the 1996 Act correctly. For such reason, this Court is inclined to interfere with the order impugned.

16.

Sub-section (3) of Section 36 states that 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. Proviso thereto states that the Court shall, while considering the application for grant of stay in the case of arbitral award for payment of money, have due regard to the provisions for

grant of stay of a money decree under the provision of the Code of Civil Procedure, 1908.

17.

The issue whether an exceptional treatment should be given to the government while considering the application for stay under section 36 filed by the government in proceedings under section 34 of the Arbitration Act fell for consideration before the Hon'ble Supreme Court in Pam Developments Private Limited vs. State of West Bengal reported at (2019) 8 SCC 112.

18.

The Hon'ble Supreme Court in the said decision, after noting that section 36 of the 1996 Act uses the expression "having regard to" the provisions of Code of Civil Procedure and not "in accordance with" the provisions of Code of Civil Procedure and in the latter case it would have been mandatory but in the form as mentioned in Section 36(3) of the Arbitration Act, it would only be directory or a guiding factor.

19.

The Hon'ble Supreme Court observed that the Arbitration Act is a special Act which provides for quick resolution of disputes between the parties and section 18 of the Act makes it clear that the parties shall be treated with equality. Once the Acts mandates so, there cannot be any special treatment given to the government as a party. 20.

The Hon'ble Supreme Court observed that under the scheme of the Arbitration Act, no distinction is made nor any differential treatment is to be given to the government, while considering an

application for grant of stay of money decree in proceeding under Section 34 of the Arbitration Act.

21.

The aforesaid proposition of law laid down in Pam Developments Private Limited (supra) was reiterated by the Hon'ble Supreme Court in International Seaport Dredging Pvt.Ltd (Supra). The Hon'ble Supreme Court in International Seaport Dredging Pvt.Ltd (Supra), after noting that the Arbitration Act does not distinguish between the governmental and private entities held that decision of the Court on the condition for grant of stay would not depend upon the status and position of the party before the Court but on a subjective assessment is to be made as to whether the party is reliable or trustworthy.

It is further held that the form of security required to be furnished should not depend on whether a party is a statutory or other governmental body or a private entity and that government entities must be treated in a similar fashion to private parties insofar as proceedings under the Arbitration Act is concerned except where otherwise indicted by law as the parties have entered into commercial transaction with full awareness of the implications of compliance and non-compliance with the concerned contracts and the consequences which will visit them in law. 22.

The learned advocate appearing for the opposite parties would contend that the petitioner be directed to deposit the entire amount as indicated in the award as a condition for grant of stay of operation of the arbitral award.

23.

Since the learned District Judge rejected the application under section 36(2) of the 1996 Act not on merits but only on the ground that it lacks jurisdiction to entertain such application, this Court is not inclined to decide the application under section 36(2) of the 1996 Act on merits at this stage.

24.

For all the reasons as aforesaid, the order impugned stands set aside. The application under section 36(2) of the 1996 Act filed by the petitioner before the learned District Judge in Other Suit No.7 of 2024 stands restored to the file of the learned District Judge, A & N Islands at Port Blair with a direction upon the learned District Judge to take up the hearing of the said application on merits after giving an opportunity to the opposite party to file an objection thereto and to dispose of the same by passing a reasoned order as expeditiously as possible in accordance with law.

25.

At this stage, learned advocate appearing for the opposite party submits that 2nd January, 2026 is the date fixed before the learned District Judge for final hearing of the application under section 34 of the 1996 Act.

26.

The learned advocate for the opposite party submits that the learned District Judge be directed to dispose of the application under section 34 of the 1996 Act as expeditiously as possible without granting any unnecessary adjournments and the opposite party undertakes that it will not proceed with the execution case in the meantime.

27.

This Court is not inclined to pass any order to such effect but leaves the opposite party free to make such a prayer before the learned District Judge. If such a prayer is made, the learned District Judge shall consider such prayer in accordance with law. 28.

With the above observations and directions, CO/64/2025 stands disposed of by requesting the learned District Judge to dispose of the pending interlocutory applications as well as the application under section 34 of the 1996 Act as expeditiously as possible without granting any unnecessary adjournments to either of the parties.

29.

Urgent Photostat certified copy of this judgment, if applied for, shall be granted to the parties as expeditiously as possible, upon compliance of all formalities.

( HIRANMAY BHATTACHARYYA, J. )