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Judgment
Arali Nagaraj, J.—Misc. Civil No. 5362/2011 is filed under Order 38 Rule 5 of the CPC by the Appellants in the main appeal seeking an order attaching the properties at item Nos. 1 and 2 shown in the schedule annexed thereto, pending disposal of Arbitration Case No. 1/2010 on the file of the learned sole Arbitrator Sri. A. Mohan Ram, retired District Judge. Bangalore.
This application is resisted by the Respondent Sri. C. Mahesh Kumar by filing written objections today.
The present appeal is filed by the Appellants, who are claimants before the learned Sole Arbitrator. They have challenged in this appeal, the order passed by the learned Arbitrator in Arbitration case No. 1/2010 (C.M.P. No. 134/2007) dismissing the application of these Appellant-claimants filed u/s 17 of the Arbitration and Conciliation Act, 1996 read with Order 38 Rule 5 of Code of Civil Procedure.
On perusal of the order impugned in this appeal, it is seen that the said application seeking an order of attachment in respect of the properties at item Nos. 1 and 2 in the schedule annexed thereto came to be dismissed by the learned sole Arbitrator by his impugned order. Therefore, the main prayer sought for in the present appeal and also the prayer sought for in this Miscellaneous Civil Petition No. 5362/2011 are one and the same. Therefore we have heard the arguments of learned Counsel for both the sides on merits of the main Appeal as well as the misc. application.
On careful reading of the affidavit of Sri. Ashok Kumar, on behalf of himself and other Appellants, in support of the Miscellaneous application filed under 38 Rule 5 of CPC and the grounds of appeal, it cOrderan be seen that he has stated in clear words that the Respondent herein, with intent to defeat the execution of the award for recovery of money that may be passed in the said arbitration case, is making attempt to alienate item Nos. 1 and 2 of the properties shown in the schedule annexed with this application. It is further stated that if an order of attachment, attaching the said properties pending disposal of the said arbitration case is not made, the award that may be passed in the main proceedings before the learned sole Arbitrator would become infructuous inasmuch as nothing would remain with the Respondent for realizing the fruits of the award.
The Appellant Ashok Kumar has further stated in his affidavit, sworn to in support of his application, that there was an order dated 27.08.2007 passed by the learned Civil Judge in A.A. No. 41/2007 restraining the Respondent herein from alienating the said properties but despite the said order, he has created equitable mortgage thereon in gross violation of the said order and therefore, if the present application is not allowed and the property in question is not attached pending disposal of the arbitration proceedings, the Appellant would be put to hardship.
The Respondent Mahesh Kumar has filed his affidavit sworn to, opposing the present application. It is stated in the said affidavit that he will not alienate item Nos. 1 and 2 of the petition schedule properties during pendency of the arbitration proceedings before the learned Arbitrator.
In view of the statement made by the Respondent Mahesh Kumar in his affidavit dated 13.07.2011 filed in the present appeal, it is clear that he will not alienate the said properties pending disposal of the proceedings. Hence, we pass the following,
ORDER
(i) The present Miscellaneous Civil No. 5362/2011 filed by the Appellants 1 to 4 under Order 38 Rule 5 of CPC is hereby allowed.
(ii) The Respondent herein is directed to furnish Bank Guarantee or Security of any other property with an undertaking that it shall satisfy the award that may be passed in the arbitration proceedings that are pending before the learned Sole Arbitrator, in Arbitration Case No. 1/2010 within a period of four weeks from today.
(iii) In the event of his failure to furnish either the Bank Guarantee or the Security, both item Nos. 1 and 2 properties as described in the schedule Annexed to the said application stand attached pending disposal of the main proceedings before the learned Sole Arbitrator.
(iv) In view of disposal of this Miscellaneous Civil No. 5862/2011 on merits, the main appeal i.e., M.F.A. No. 2174/2011 stands disposed of accordingly.
(v.) There is no order as to costs.
(vi) The learned Sole Arbitrator shall conclude the said arbitration proceedings as expeditiously as possible, preferably within a period of three months from the date of receipt of a copy of judgment in this appeal.
(vii) The Appellants and the Respondent shall appear before the learned Sole Arbitrator on 8th August, 2011 without any further notice. Both the parties to the arbitration proceedings and their respective counsel shall co-operate with the learned Arbitrator in concluding the proceedings within the stipulated period.