The Calcutta High Court held that there is no bar in the Code of Civil Procedure or under the Arbitration Act, 1996 for accepting immovable property as security for stay of decree.
A Single Bench of Justice Moushumi Bhattacharya held that cash security is not sine qua non under the statutes, emphasizing that the intention behind seeking security is simply to furnish an effective cushion for the decree-holder in case the challenge to the decree fails.
The Bench noted that Section 36(3) of the Arbitration Act, which contemplates procedure for stay of an Award, does not mention the word "security" and only indicates that the Court may impose suitable terms for stay of the award.
The provision states that on filing of an application for stay of award, the Court may, "subject to such conditions as it may deem fit," grant stay of operation of such award for reasons to be recorded in writing.