A strong prima facie case for an unliquidated amount in damages is essential for an order of attachment before judgment.

1. THIS is an application under section 9 of the Arbitration and Conciliation Act, 1996 in support of a claim in damages made in the reference. The petitioner seeks orders in the nature of attachment before judgment and says that the claim is such and the conduct of the respondent demands that the respondent be restrained from dealing with or disposing of its only known immovable property in Hyderabad.

2. THE agreement between the parties required a fuel handling system for a captive power plant to be set up by the respondent at the factory premises of the petitioner within a period of six months from the date of issuance of the work order or the execution of the agreement on or about May 12, 2006. It is the admitted position that even though there was no formal letter extending the time to complete the work, minutes of meetings held between the parties would reveal that the respondent was permitted to continue the work beyond November 12, 2006.

The agreement recorded that time was to be of the essence of the contract and clause 2.11 provided for payment of liquidated damages for delay in delivery. The petitioner was, under such clause, entitled to deduct from the contract price a sum equivalent to 0.5% of the total contract price for each week of delay until actual performance upto a maximum deduction of 5% of the total contract price. The right to deduct such amount by way of liquidated damages was without prejudice to the other remedies to which the petitioner was entitled.

3. THE petitioner says that in or about April, 2007, the respondent contractor abandoned the work. THE petitioner thereafter had to engage another agency to undertake the work. At paragraph 17 of the petition, the particulars of the claim have been furnished. THEse include procurement of extra steel, payment on account of purchase of material to replace the defective material supplied by the respondent and similar heads. THE total claim of Rs. 39,03,72,000/- includes a claim of Rs. 29.41 lakh by way of liquidated damages.

4. THE petitioner says that the only valuable asset of the respondent is its office building in Hyderabad. According to the petitioner, the statements contained in paragraph 20 of the petition have not been adequately dealt with in the respondent's affidavit. THE petitioner says that since it is evident from the respondent's affidavit that the respondent is likely to sell off its office, it is necessary that an order be made attaching the office or restraining the respondent from selling its only immovable property.

In the respondent's affidavit, the basis of the claim has been questioned. The respondent has said that it was forced to accept the repudiation of the contract by reason of the conduct of the petitioner, particularly, in the petitioner making delayed payments or refusing to make payment of the amounts that had fallen due to the respondent.

5. THE claim in damages has to be ascertained. Apart from the amount indicated by way of liquidated damages, which may have been a genuine pre-estimate that was recorded by the parties, the rest of the claim has to be assessed. Even the amount claimed by way of liquidated damages, which is less than one per cent of the total claim, may overlap with the other claims, particularly as this is not a case where the work has been completed after a delay but where the work has been abandoned altogether if the petitioner's version is believed; or the contract has been repudiated if the respondent's version is believed.

6. FOR a claim which is essentially for an unliquidated amount in damages no order in the nature of attachment before judgment is ordinarily passed. It is not necessary to consider the petitioner's contention that the respondent has not dealt with the statements contained in paragraph 20 of the petition. A strong prima facie case in support of the claim has first to be made out before the respondent's conduct can be gone into or any allegation as to the respondent's impecun