In Brief
A small-scale enterprise sought recovery of Rs. 2.72 crores from a supplier through arbitration under the MSME Act. Following an award in its favour, the supplier filed to set aside the award without first depositing 75% of the award amount as required by law. The High Court allowed this to proceed without the deposit, treating it as merely directory rather than mandatory. The Supreme Court held that the 75% pre-deposit requirement is mandatory before challenging an award, though courts may permit payment in instalments if undue hardship is shown. The High Court's order was quashed, and proceedings were remitted requiring the supplier to deposit the prescribed amount first.
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