Calcutta High Court Conditionally Stays Shapoorji Pallonji Award Against West Bengal Housing Board

The Calcutta High Court on 31 August conditionally stayed an arbitral award dated 13 September 2025 in favour of Shapoorji Pallonji and Company Private Limited against the West Bengal Housing Board, and directed the Board to secure the entire awarded amount within eight weeks.

Justice Gaurang Kanth also directed the Housing Board to deposit 50% of the awarded amount, along with up-to-date interest, in cash and secure the remaining 50% through a bank guarantee. Holding that this arrangement would balance the financial interests of both parties, the Bench observed:

“Considering the submissions made by both sides and keeping in mind the balance of convenience and equity between the parties, this Court is of the view that the awarded amount ought to be secured by way of 50% cash deposit and 50% bank guarantee.”

The dispute arose from a construction agreement dated 29 April 2016, between the West Bengal Housing Board and Shapoorji Pallonji and Company Private Limited for the Sunray Housing Project. An arbitral tribunal subsequently passed an award in favour of the construction company on 13 September 2025.

The Housing Board approached the High Court under Section 36(2) of the Arbitration and Conciliation Act, 1996, seeking a stay on the operation of the award. It submitted that it was ready to secure the entire awarded amount through a bank guarantee.

Opposing this proposal, Shapoorji Pallonji argued that the purpose of Section 36(2) was to protect and secure the awarded amount. It contended that a bank guarantee alone would prevent the company from accessing the financial benefits of the award for its business operations. The company therefore sought a cash deposit to enable it to apply for withdrawal of the amount for business purposes.

The Bench directed the Housing Board to furnish the cash deposit and bank guarantee before the Registrar, Original Side, within eight weeks, subject to the Registrar's satisfaction. It further directed the Registrar to maintain the cash deposit in an interest-bearing fixed deposit with a nationalised bank with an automatic renewal facility. It said:

“In case the said amount is deposited within the stipulated time period, there shall be a stay of the operation of the award dated 13.09.2025"

It clarified that the award would not stand stayed if the Housing Board failed to furnish the prescribed securities within eight weeks.

Accordingly, the High Court disposed of the Housing Board's petition, granting a conditional stay of the arbitral award subject to compliance with the security requirements.

Appearances for petitioner (West Bengal Housing Board): Senior Advocate Jishnu Saha; Advocates Sweta Gandhi, Suhaan Mukherji, Adarsh Kumar, Ayan Chakraborty, Aditya Pandey and Subojit Saha.

Appearances for respondent (Shapoorji Pallonji and Company Private Limited): Senior Advocates Sudipto Sarkar and Sabyasachi Chaudhury; Advocates Bodhisatta Biswas, Mohit Rohatgi, Ashwini Kumar Tak, Samriddhi Shukla, Sahadat Ali and Mainak Das.