Order Passed By Court Under Section 36 Of A&C Act Is An Interim Order, Can Be Modified On Grounds Of Financial Hardship: Calcutta High Court

[09 May 2022] The Calcutta High Court has ruled that financial hardship and financial indebtedness are sufficient grounds for modifying an order passed under Section 36 of the Arbitration and Conciliation Act, 1996 (A&C Act) to direct the award debtor to deposit the awarded amount by way of cash security. The Single Bench of Justice Ravi Krishan Kapur held that the security directed to be deposited by a Court under Section 36 of the A&C Act should be real and realisable, and it ought not to be illusory. The Court added that once a Court exercises its jurisdiction under Section 36 of the A&C Act and directs furnishing of security in a particular mode and manner, it always retains jurisdiction in respect of such security. The Court ruled that an order passed by the Court under Section 36 is an interim order and is subject to alteration and modification.