1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. ARBITRATION PETITION NO.105 OF 2007 M.D.Enterprises Petitioners vs. Kum Kum Kavita Co-op.Housing Socy.Ltd. Respondents Mr.Rajiv Narula i/b.M/s.Jhangiani, Narula & Associates for the petitioners. Mr.R.S.Ghadge i/b. Mr.A.S.Desai for respondent no.1. CORAM : ANOOP V. MOHTA,J. DATED : 21st April, 2007 P.C. The petitioner has invoked Section 9 of the Arbitration & Conciliation Act, 1996 (for short, Arbitration Act") and prayed to direct the respondents to deposit a sum of Rs.30,00,000/- representing the amounts of bank guarantees realized by the respondents. Admittedly Petition under Section 11 of the Arbitration Act is pending. The apprehensions have been expressed in paragraphs 5 & 6 of the petition which read thus: "5. The petitioners say that the respondents are co-operative society consisting of the flat purchasers as its members. The funds belongings to the society are used for day to day management of the affairs of the said society. The petitioners say and submit that the respondents do not have sufficient funds for managing the day to day affairs and it is apprehended by the petitioners that the respondents shall utilize the amounts that have been received by them by illegally and unlawfully invoking the Bank Guarantees. The 2 petitioners say and submit that if the respondents are not called upon to deposit the amounts invoked under the Bank guarantees as also loss/damage suffered by the petitioner under the Development Agreement, then there will be no funds available for recovery by the petitioners and the award that may be passed by the Arbitrator in the arbitration proceedings shall be a paper decree and the petitioners would have no means for recovering the decretal amount that may be passed by the learned Arbitrator. The petitioners therefore say and submit that it is in the interest of justice, equity and good conscience that the respondents be directed by this Hon’ble Court to deposit a sum of Rs.30,00,000/- in this Hon’ble Court till the disputes and differences between the parties is finally adjudicated. (6) The petitioners say and submit that the financial position of the respondents is not strong enough and therefore the petitioners apprehend that there is every possibility and likelihood and in all probabilities that the respondents shall utilize the amounts that have been received by unlawful and illegal invocation of the Bank guarantees in managing day to day affairs and for meeting other incidental costs and expenditures of the respondents." 2. The respondents have replied to these in para 42 as under: "42. With reference to para 6, I deny that the financial position of respondent is not strong enough and therefore, the petitioners apprehend that there is every possibilities and likelihood and in all probabilities that the respondents shall utilize the amounts that have been received by unlawful and illegal invocation of the Bank Guarantee in managing day to day affairs and for meeting other incidental cost and expenditure." 3. Considering this reply, as respondents are not utilising this money and as their financial position is 3 strong and able to manage day to day affairs and incidental costs and expenditure, pending the constitution of the Arbitral Tribunal, this statement is sufficient to secure the said amount of the Bank guarantee. 4. The statement to continue till the constitution of the Arbitral Tribunal and four weeks thereafter. The petitioners will be at liberty to move application before the constituted Tribunal under Section 17 of the Arbitration Act, if case is made out. 5. In view of this, the present petition is disposed of accordingly. [ANOOP [ANOOP [ANOOP V. MOHTA,J.] V. MOHTA,J.] V. MOHTA,J.]