P&H: Article 227 Cannot Be Used To Bypass MSME Act Pre-Deposit.

punjab-haryana
⚖️ Order Date: 15 May 2026
Headnotes

Arbitration and Conciliation Act, 1996, S.34, Micro, Small and Medium Enterprises Development Act, 2006  Act, 2006, S.19  - Arbitral award - Execution - Withdrawal of objections u/s 34 of A & C Act without complying with mandatory 75% pre-deposit u/s 19 of MSMED Act - Recourse to Art.227 to...

Arbitration and Conciliation Act, 1996, Ss.34, 36 — Arbitral award - Execution — Executing Court cannot go beyond arbitral award on merits - Objections attacking award’s merits are impermissible in execution and award remains executable. (Para 18)

Micro, Small and Medium Enterprises Development Act, 2006, S.19, Arbitration and Conciliation Act, 1996, S.34 — Pre-deposit requirement — Non-deposit of 75% of award while pursuing S.34 of A & C Act cannot be cured by withdrawal and by invoking Art.227 of Constitution - Statutory embargo...

 


Facts of the Case

P&H: Article 227 Cannot Be Used To Bypass MSME Act Pre-Deposit.

High Court has dismissed a civil revision filed under Article 227 challenging an executing court’s order that rejected objections to the execution of an MSME-related arbitral award. Court  held that after withdrawing a Section 34 petition without depositing the mandatory 75% under Section 19 of the MSMED Act, a party cannot invoke the High Court’s supervisory jurisdiction to assail the award or the execution.

The dispute arose from a award by a sole arbitrator appointed after conciliation failed before MSME Facilitation Council under Section 18 of the MSMED Act. Award creditor sought execution. The award debtor had initially filed objections under Section 34...

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