P.B. Majmudar, J.

Government of Goa has preferred this appeal against the judgment and order passed by Principal District Judge, Panaji, dated 26.08.2008. By the impugned order, the Principal District Judge, Panaji, partly allowed the application submitted by the respondent herein. The respondent preferred an application under Section 9 of the Arbitration and Conciliation Act, 1996 for the purpose of interim measure. The dispute is in connection with removal of the vessel, namely, m.v. River Princess, grounded off at Sinquerim Beach, Candolim. So far as the ship is concerned, it is grounded on the said beach since 06.06.2000, i.e. more than eight years and in order to prevent environmental hazard, it was felt necessary on the part of State of Goa to see that the said ship is removed and taken out for the purpose of re-floating and towing it away wholly to the ship breaking yard. For the aforesaid purpose, an agreement was entered into between the present appellant and respondent dated 05.01.2007, by which, the respondent herein had agreed to remove the vessel, namely, m.v. River Princess along with its contents by re-floating and towing it away wholly to any authorized ship breaking yard and dispose it off. As per the agreement, the respondent was required to re-float the said ship and tow it away wholly from the site within a period of 180 days from the date of the letter of acceptance of the bid, i.e. from 23.10.2006. The respondent herein also gave bank guarantee for the performance of the contract for Rs. 5.50 crores (Rupees Five crores fifty lakhs only), in favour of present appellant. According to the appellant, since the respondent failed to carry out the said obligation within stipulated period, and that since time being the essence of the contract and since the respondent failed to carry out the contractual obligation, the appellant forfeited the security deposit by encashing the performance bank guarantee. The appellant also issued a show cause notice to the respondent as to why the contract should not be terminated on 03.06.2008. At that stage, the present respondent preferred the said application under Section 9 of the Arbitration and Conciliation Act, 1996, on various grounds as mentioned in the application. The said application was opposed by the appellant on various grounds.

The learned Principal District Judge, Panaji, passed following order:

"ORDER

(a) Application is partly allowed.

(b) The respondent is restrained from, in any manner whatsoever causing an interference with or impediment to the applicant's work under the said agreement dated 05.01.2007, and/or from terminating the same and from making any demand on the applicant or taking away by way of damages or otherwise and from taking any action in furtherance of show cause notice dated 05.06.2008, and from awarding the work which is the subject-matter of the said agreement, to any other person or entity, under the re-flotation of the vessel or until the final disposal of the arbitration proceedings for commencement of which the applicant shall take steps within one month from today, whichever is earlier, as the case may for the reliefs concerned."

It is the aforesaid order which is impugned at the instance of the appellant in this appeal and which is filed under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996. Learned counsel Mr. Dessai, appearing for the appellant, has vehemently submitted that the interim direction given by the learned judge could not be given in the facts and circumstances of the case. It is submitted that the time being the essence of the contract and when the respondent failed to carry out the contractual obligations, the contract came to an end as per the clause in the contract and, accordingly, the learned trial judge could not have given the direction which is given in the judgment. It is submitted that judgment of the learned trial judge is contrary to law and facts of the case. During the course of hearin