The court has discretion to modify security arrangements under the Arbitration Act based on changed circumstances, balancing equities between parties while allowing withdrawal of funds.

JUDGMENT :

Ravi Krishan Kapur J.

1. GA/5/2023 is an application filed by the award-holder/petitioner seeking directions on the award debtor/respondent to furnish cash security for a sum of Rs.19,70,98,273/- and also permit withdrawal of the entire deposited amount (including any additional amount) on such terms and conditions as this Court thinks fit and proper.

2. Briefly, the disputes between the parties arise out of a works contract for construction of a multi-storied bus terminus and commercial complex at Serampore, West Bengal. Disputes and differences having arisen between the parties, the award holder was compelled to initiate arbitration proceedings for recovery of their dues. Ultimately, by an award dated 29th June, 2020, a sum of Rs.14.68 crores together with interest thereon was awarded in favour of the petitioner.

3. Being aggrieved by the award, the respondent had filed an application under section 34 of the Arbitration and Conciliation Act, 1996. Subsequently, the respondent had also filed an application for stay of the award. By an order dated 16th September, 2021, stay of the award was granted upon the respondent furnishing security for an amount of Rs. 10 crores (half in cash and half by way of bank guarantee) with the Registrar, Original Side. Being dissatisfied with the order dated 16th September, 2021, the respondent preferred a Special Leave Petition which was dismissed by an order dated 5 June, 2022, granting liberty to the petitioner to pray for withdrawal of the amount deposited subject to terms and conditions as this Court may direct.

4. In the above background, the petitioner had filed an application being GA/2/2022 seeking permission to withdraw Rs.5 crores lying deposited with the Registrar, Original Side of this Court. The said application is still pending. In view of the common questions of law and fact raised in both these applications the same were heard analogously.

5. On behalf of the petitioner, it is submitted that the prayer for additional cash security of Rs.19,70,98,273/- over and above the amount of Rs.10 crores deposited in terms of the order dated 16th September, 2021 ought to be granted. The arbitral award as on 29th June, 2020 was for Rs.22,40,35,152/- and has now escalated to Rs.29,93,40,754/- due to the interest component in terms of the award. It is also contended that the petitioner is in dire needs of funds to carry on business. The subsequent event of an amount of approximately Rs.7.5 crores having accrued on account of interest and the requirement of the petitioner to seek withdrawal of the amount furnished as security warrants reconsideration of the security furnished in terms of section 36(2) of the Act. In support of such contentions, the petitioner relies on Manish v. Godawari Marathawada Irrigation Development Corporation 2018 SCC OnLine SC 3863, State of West Bengal v. BBM Enterprises (A.P. No. 808 of 2022), Damodar Valley Corporation v. Reliance Infrastructure Limited 2022 SCC OnLine Cal 553 and Dilip Kumar Chatterjee v. State of West Bengal (E.C. No. 467 of 2019).

6. On behalf of the respondent, it is contended that there is no provision under the Act which provides for withdrawal of the amount furnished as security under section 36 of the Act. The Act is a consolidating Act and a complete Code by itself. The provisions of the Code of Civil Procedure, 1908 are merely applicable as guidance. In the absence of any specific provision, the High Court exercising jurisdiction under the Act does not have any power to pass orders on equitable considerations. Section 36(2) of the Act only contemplates securing an award. There is no scope for exercising any equitable jurisdiction in permitting the prayer for withdrawal of the awarded amount or any portion thereof. Any such prayer is in the nature of restitution and is impermissible under the Act. In any event, once the enforceability of the award has been stayed, any review of such order would tantamount to enforcement of the award. In