C. Y. SOMAYAJULU, J.

( 1 ) SINCE parties to the C. M. A. and the c. R. P. are the same, they would herein after be referred to as they are arrayed in the c. M. A. 1st Respondent filed the suit against the appellant and respondents 2 and 3, seeking a decree of perpetual injunction restraining appellant and 3rd respondent from taking any action under the agreement dated 30-6-1999 (hereinafter referred to as suit agreement) for sale and purchase of maltol and Ethyl Maltol business of the appellant including arbitration proceedings before the 3rd respondent on the ground that the suit agreement is vitiated by fraud and is opposed to public policy and so is bad in law, and filed I. A. No. 1352 of 2000 in the suit, seeking an injunction restraining appellant and 3rd respondent from proceeding with the arbitration invoked by appellant before the 3rd respondent. Learned trial Judge granted an ex parte injunction and ordered notices. After the receipt of notice, appellant filed I. A. No. 1640 of 2000 seeking stay of all further proceedings in the suit, pending the resolution of the disputes/claims by the 3rd respondent.

( 2 ) BY the order under appeal in the C. M. A. , the learned District Judge allowed i. A. No. 1352 of 2000 filed by the 1st respondent, and by the order under revision in the C. R. P. the learned District Judge dismissed I. A. No. 1640 of 2000 filed by the appellant. Hence the appeal and the revision.

( 3 ) THE undisputed facts in this case are, appellant and 1st respondent were parties to a Memorandum of understanding and intent signed in 1998 and a limited agreement to reimburse costs dated 10-7-1998 under which 2nd respondent was to construct a factory at Digwal village, Kohri Mandal, medak District, for production of Maltol and ethyl Maltol, which are to be sold by the appellant under the trade mark Weltol and weltol Plus and culminated in the appellant, 1st and 2nd respondents executing the suit agreement on 30-6-1999. When the construction of the factory was in progress and when differences cropped up between them, appellant, by its letter dated 19-6-2000, by invoking Clause-24 of the suit agreement relating to arbitration, requested the 3rd respondent to arbitrate the dispute. After receiving notice from the 3rd respondent on the dispute raised by the appellant, 1st respondent filed the suit seeking an injunction against the appellant and 3rd respondent from proceeding with the arbitration on the ground that the suit agreement is vitiated by fraud and is opposed to public policy, and also on the ground that there is no arbitrable dispute between it, which is a surety to the 2nd respondent, and the appellant. Contending that the suit is not maintainable in view of the clause relating to arbitration in the suit agreement, appellant opposed the application for interim injunction and also filed a petition for return of the plaint. Holding that the controversy between the parties can be resolved only after the appellant filed its written statement in the suit, and till then the question as to whether the contract between the parties is uncertain, or is null and void cannot be decided, the trial Court confirmed the ex pane injunction granted in favour of the 1st respondent and dismissed the petition for stay of all proceedings in the suit.

( 4 ) THE main contention of the learned counsel for appellant is that the suit as framed is not maintainable in view of sections 27, 38 and clause (h) of Sec. 41 of the Specific Relief Act, 1963, because an injunction can be granted only to enforce a positive right or to enforce a negative covenant, and injunction to proceed with arbitration cannot be granted because the award, if passed by the arbitrator, can be questioned in a Court and the Court would decide its validity. He relied on Ram Kissen joydayal v. Pooran Mull and others and sunil Kumar v. Ram Prakash in support of his said contention. He contended that since specific acts of misrepresentation and fraud with dates and d

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