B. SUBHASHAN REDDY, J.

( 1 ) THIS Civil Revision Petition filed under art. 227 of the Constitution of India arises out of an order passed by the learned vi-Additional District Judge, Visakhapatnam dt. 5-8-2003, whereunder the learned Judge allowed I. A. No. 445 of 2003 in O. P. No. 52 of 2003 filed by the respondent herein purporting it to be under Sec. 9 (b) and (e) of the Arbitration and Conciliation Act, 1996 (for short the Act) r/w Order 38 Rule 5 of the code of Civil Procedure seeking an order of attachment before Judgment of the petition schedule property.

( 2 ) THE petitioner herein is a Company incorporated under the provisions of the companies Act with its Registered Office at new Delhi and Corporate Office at Calcutta, engaged in the business of Software education. The respondent herein is a partnership firm also engaged in the field of computer education. Both of them have entered into an agreement on 16-10-2000 for setting up "techno Campus The software Finishing School" in visakhapatnam. It is not necessary to refer in detail as to the nature of the business and the contents of the agreement entered by and between the parties except to notice that certain disputes or differences had arisen between them leading to filing of the application under Sec. 9 of the Arbitration and Conciliation Act, 1996.

( 3 ) THE respondent herein who invoked the jurisdiction of the court at visakhapatnam alleged that it had invested approximately Rs. 52 lakhs in the business. In terms of the said agreement, the fee collected from the students enrolled in the techno Campus was deposited into the account of the petitioner herein with the hongkong and Shanghai Bank Corporation at Visakhapatnam. The petitioner without any justification whatsoever had transferred all the said amounts to Calcutta. The amounts that are liable to be paid to the respondent herein in terms of the agreement was thus, not paid and was in fact, secreted. The thrust of the contention of the respondent herein was that the petitioner had sliced down its staff at Hyderabad, Delhi and Calcutta. The respondent has sensed that the petitioner was intending to wind up their operations at the Techno Campus at visakhapatnam while at the same time appropriating the association fee collected from the respondent as a business partner. It is alleged that the petitioner herein failed to discharge its contractual obligation towards the respondent who is admittedly a business partner at Visakhapatnam.

( 4 ) IT is the case of the respondent that steps have already been initiated in that regard by the respondent by nominating an arbitrator. But the petitioner herein has declined to co-operate and started stonewalling by adopting various dilatory tactics and in the process started transferring the funds and properties. Apprehending that the action on the part of the petitioner herein was likely to result in serious prejudice the respondent invoked the jurisdiction of the district Court at Visakhaptnam under Sec. 9 of the Act.

( 5 ) THE petitioner herein resisted the application filed by the respondent herein in the District Court, inter alia, contending that the disputes and differences arose between the petitioner and the respondent during the year 2001-2002. The disputes and differences were required to be resolved by arbitration. According to clause 24 of the said agreement, which reads as follows. The seat of arbitrator was at New Delhi and an arbitration proceeding shall have to be conducted at New Delhi only. "am disputes or the differences whatsoever arising between the parties hereto out of or relating to the construction, meaning and operation or effect of this Agreement or the breach thereof which cannot be settled by mutual discussion the same shall be referred to the decision of an arbitrator to be appointed in writing by the parties to the Agreement or if they cannot agree upon a single arbitrator, to the decision of three arbitrators, one each to be appointed by the Parti

Click Here to Read the rest of this document