THE HON'BLE SRI JUSTICE A.GOPAL REDDY and THE HON'BLE SRI JUSTICE K.S. APPA RAO C.M.A No.688 of 2011 JUDGMENT: (Per Hon’ble Sri Justice A.Gopal Reddy) This appeal under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 is directed against the order and decree dated 22.06.2011 passed by the I Additional District Judge, Ananthapur, in O.P.No.604 of 2010 filed under Section 9 of the Arbitration and Conciliation Act, 1996 r/w Order XXXVIII Rule 5 r/w Section 151 C.P.C, whereby the learned Judge allowed the O.P directing the appellant herein to furnish security for a sum of Rs.2,23,32,146/-, and on failure of furnishing any third party security or bank guarantee, their movable properties were ordered to be attached. The relevant facts, which give rise to filing of this appeal, briefly stated, are as under: The first respondent – M/s.Vijaya Laxmi Enterprises, which is a structural contractor specialised in executing works relating to the laying of structures and bridges etc., entered into an agreement with the appellant-Continental Engineering Corporation (CEC) (hereinafter referred to as ‘the employer’) vide work order dated 19.03.2008 for execution of bridge works on National High Way No.7. As per the work order, if any disputes arise between the parties, the same shall be resolved through the arbitration. Alleging that even though the first respondent firm completed the works, the appellant has not cleared the bills and that the appellant is liable to pay a total outstanding amount of Rs.2,23,32,146/-, which includes Rs.28,92,508/- against the two bills for February and March, 2010, i.e., Rs.9,00,980/- together with the amounts of Rs.19,91,528/-, which were deducted from the bills of December 2009, January, 2010 and February, 2010 and others including the security deposit/retention money etc., totalling to Rs.1,94,39,638/- along with interest, the first respondent firm issued a legal notice to the appellant on 30.07.2010. In spite of service of notice, the appellant did not evoke any response. Hence, the first respondent firm nominated a retired Judge of this Court to take up arbitration proceedings to resolve the disputes between the contractor and the employer. On giving consent by the Arbitrator so appointed, the first respondent firm addressed another legal notice to the appellant for giving their consent for appointment of Arbitrator, and filed the present O.P seeking attachment before judgment of schedule movable assets belonging to the appellant. The appellant employer contested the O.P by filing a counter affidavit contending that the O.P was not maintainable since as per condition No.43 of the terms and conditions of the work order, all the disputes, claims and differences arising between CEC and sub- contractor in connection with the work order or with the breach thereof, in the first place, shall be solved by CEC’s decision, through mutual agreement and such decision should be notified in writing to the sub- contractor and in the event of dissatisfaction with such decision, the matter in dispute shall be referred to arbitration before International Chamber of Commerce. It is also contended that the first respondent firm is not entitled to receive amounts for pending bills for the month of February, 2010 and final bill of March, 2010 and recoveries from the bills of December, 2009, January, 2010 and February, 2010 and also the payment towards extra expenses incurred for helmet-sinking, and therefore, nominating an Arbitrator by the first respondent firm without exhausting said remedies is unilateral. It is further contended that the appellant completed the work at site No.C.13 as the first respondent firm failed to complete the same and that as the works are completed at site No.C.13, the equipments are being shifted to another project i.e., site No.C.12 in the same area of Anantapur District. Therefore, the allegation that the appellant is removing the equipment out of the jurisdiction of the Court is not correct. The learned Judge, after considering the respective pleas and also the clauses in the agreement, allowed the O.P as aforementioned. Aggrieved by the same, the appellant filed this appeal. We have heard the learned counsel for the appellant as well as the learned counsel for the respondents and perused the entire material available on record. During the course of hearing, the learned counsel for the appellant fairly conceded that the appellant is not removing the machinery out of the jurisdiction of the Court, where the contractor executed the work, but contended that the machinery was deployed in adjacent site where the work is in progress, which will take considerable time. He also contended that the Court below is not justified in attaching the movables on the pretext that the appellant is likely to remove the same out of the jurisdiction of the Court. He further contended that the appellant is agreed to give a Bank Guarantee for half of the amount claimed by the first respondent and also an undertaking that the machinery, which is now deployed at Site No.C12, where the work is going on, will not be removed out of the jurisdiction of the Court. Taking into consideration the above said submission, the impugned order is modified to the extent of the appellant furnishing Bank Guarantee for half of the amount claimed by the first respondent i.e., for Rs.1,11,66,073/-, within a period of one month from today, and also giving an undertaking to the satisfaction of the Court below that it will not remove the machinery till completion of the work at site No.C12, until further orders. Subject to the above modification, the Civil Miscellaneous Appeal is disposed of. There shall be no order as to costs. ________________ A. GOPAL REDDY, J ________________ K.S. APPA RAO, J Date: 10.08.2011 Note: Furnish CC in two days B/o va