JUDGMENT COMPILATION

SECTION 19 OF MSMED ACT, 2006

S.NO CASE NAME CITATION PARA PARAGRAPH
NO.
1. GE T&D India Limite 2017 SCC 42, 43 For the above reasons, the Court
d OnLine Del 6978 negates the plea of the Petitioner that
: (2017) 238 DLT the MSMED Act does not apply.
V.
79 Consequently, the question of the
Reliable Engineering Petitioner seeking a waiver of the
Projects and Marketin requirement of depositing 75% of
g the amount in terms of Section 19
of the MSMED Act does not arise.
As explained by the Supreme
Court
in Goodyear India Ltd. v. Norton
Intech Rubbers Pvt. Ltd. (supra),
there is no discretion in the Court
to reduce the amount of pre-
deposit.

The question that now arises is

whether, in terms of the provisions of
Section 19 of the MSMED Act, the
Court can set any reasonable terms
for the deposit to be made?
Considering the amount involved,
the Court directs that 75% of the
amount awarded by the FC in
favour of the Respondent should be
deposited by the Petitioner in this
Court, in four equal instalments
with each instalment being
deposited before the 10th of every
succeeding month hereafter. The
amount as and when deposited by the
Petitioner shall be kept by the
Registry in a fixed deposit initially
for a period of six months and kept
renewed during the pendency of the
petition. The hearing of the main
 petition will be subject to compliance
with the above direction.
2. GOODYEAR INDIA (2012) 6 Supreme 5, 12 The learned Single Judge having
LIMITED Court Cases 345 : considered the submissions made on
V. (2012) 3 Supreme the said provision came to the
NORTON INTECH Court Cases (Civ) conclusion that on a plain reading of
RUBBERS (P) LTD. 722 : 2012 SCC the section, the Court had no
OnLine SC 264 discretion to either waive or reduce
the amount of seventy-five per cent
of the award as a predeposit for filing
of the appeal and, accordingly,
dismissed the original petition, with
leave to the petitioner to deposit an
amount, amounting to seventy-five
per cent of the award, within an
extended period of six weeks. The
Division Bench before whom the
aforesaid appeal was preferred
concurred with the judgment of the
learned Single Judge and while
dismissing the appeal, extended the
period for deposit of the aforesaid
amount by a further period of six
weeks.

Having regard to the above, we are

not inclined to entertain the special
leave petitions filed by M/s Goodyear
India Ltd. and the same are,
accordingly, dismissed. However, in
keeping with the other decisions
rendered in these cases, we extend
the time for predeposit by the
petitioner, by a further period of
twelve weeks. If such deposit is
made, the appeal shall be treated to
be in order and, thereafter, the same
may be proceeded with.

3. Virgo Conductors Pvt. AIR 2008 AP 11, 20 When the Old Act was repealed
Ltd. Rep. By ... 123, 2008 (2) under Sub-section (1) of Section 32
V. ALT 248 of the New Act, it is stated in Sub-
A.P. Transmission
Corporation ... section (2) that notwithstanding such
repeal, anything contained or any
action taken under the Act so
repealed, shall be deemed to have
been done or taken under the
corresponding provisions of the New
Act. By virtue of the said validating
Clause contained in Sub-section (2)
of Section 32, filing of the original
petitions under Section 34 of the
Arbitration Act, which Act was made
applicable under Sub-section (2) of
Section 6 of the Old Act, must be
deemed to have been done or taken
under the corresponding provisions
of the New Act. Section 19 of the
New Act corresponds to Section 7 of
the Old Act only to a limited extent
in the sense that both of them
contained a bar against challenge to
the award in the absence of deposit of
75% of the awarded amount. Section
19 of the New Act, however,
contemplates an application for
setting aside the award, whereas
Section 7 of the Old Act
contemplates only an appeal. Filing
of an application for setting aside the
award is contemplated under the Old
Act only under the provisions
of Arbitration Act, which provisions
are made applicable under Sub-
section (2) of Section 6 wherein there
was no requirement for making
deposit of 75% of the awarded
amount. Thus, in a sense, filing of an
application for setting aside the
award and the bar against
maintainability of such application
without depositing 75% of the
awarded amount is a new feature
incorporated under Section 19 of the
New Act, which has no
corresponding provision under the
Old Act. Such new provision which
is incorporated for the first time
under the New Act can only have the
prospective operation w.e.f., 16-06-
2006, the date on which the said
provision has come into force,
inasmuch as the Act does not contain
any specific provision to the effect
that its operation is retrospective.
Sub-section (2) of Section 1 of the
Act states that the Act shall come
into force on such date the Central
Governmental may by notification
appoint. It is not disputed that the Act
came into force w.e.f., 16-06-2006.
Deposit of 75% of the awarded
amount cannot, therefore, be insisted
in respect of matters which are
already filed under the provisions of
the Old Act and pending by the date
of commencement of the New Act.

In the circumstances, the contention

of the petitioners that by virtue of
enactment of the New Act repealing
the Old Act during the pendency of
the original petitions, the first
respondent herein shall be required to
deposit 3/4th of the amount awarded
under Section 19 of the New Act, is
untenable.