(1) No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any court unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such court:
Provided that pending disposal of the application to set aside the decree, award or order, the court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case, subject to such conditions as it deems necessary to impose.
Legal Commentary & Landmark Judgments: Section 19
Section 19 of the MSMED Act establishes a strict condition precedent for entertaining any application to set aside a decree, award, or order: the appellant/buyer must mandatorily deposit seventy-five percent of the awarded amount with the court.
Furthermore, the court is empowered to disburse a reasonable portion of this deposited amount to the supplier pending final disposal of the application, subject to such conditions as the court deems fit.
Section 19 serves as an insurmountable barrier against frivolous appeals by large corporations. An application under Section 34 of the Arbitration Act cannot even be listed for hearing on merits until proof of deposit of 75% of the total award (including accrued compound interest) is submitted to the court.