Primemover Mobility Technologies Pvt. Ltd. Secures Reinstatement of Section 34 Application after Successful Appeal
In a significant decision, the Delhi High Court has set aside the dismissal of an application filed under Section 34 of the Arbitration and Conciliation Act, 1996, by Primemover Mobility Technologies Pvt. Ltd. The appeal, heard by a division bench comprising Mr. Navin Chawla and Mr. Rajneesh Kumar Gupta, was against a previous order by the District Judge of the Patiala House Courts Complex, which had dismissed Primemover's application due to non-compliance with a mandatory pre-deposit condition under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006.
The dispute arose from procedural issues faced by Primemover in depositing 75% of the awarded amount. Despite the bank initiating the Fixed Deposit Receipt (FDR) within the granted timeframe, additional formalities delayed the deposit. The High Court found that the failure to deposit was not deliberate or malafide, thus warranting an extension for compliance.
The appeal was challenged by Sanmarg Infra Tech Private Limited, the respondent, on grounds of maintainability. However, the High Court clarified that the dismissal of an application under Section 34, even on procedural grounds, is appealable under Section 37(1)(c) of the Arbitration and Conciliation Act. The court dismissed the respondent's objections regarding the authorization of the appellant's appeal filing and alleged misuse of court processes, reinforcing the validity of the board resolution authorizing the appeal.
The bench ordered the restoration of Primemover's application, conditional on depositing the requisite 75% of the awarded sum with interest within one week. Failure to meet this condition will result in an automatic dismissal of the application.
This judgment underscores the judiciary's inclination to facilitate fair arbitration processes while ensuring compliance with legal obligations. Parties have been directed to appear before the learned District Judge on January 27, 2026, for further proceedings.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Section 37 - Appeal against dismissal of application under section 34 for non-compliance with mandatory pre-deposit under section 19 of the MSME Act - Dismissal of section 34 application falls within the ambit of section 37(1)(c) and is appealable - Appellate Court sets aside the dismissal and restores the application, allowing further time for compliance.
Statutory provision(s): Arbitration and Conciliation Act, 1996 - Sections 34, 37; Micro, Small and Medium Enterprises Development Act, 2006 - Section 19
