The court has the power to grant interim injunctions or secure the amount in difference in appropriate cases during the pendency of arbitration proceedings before the arbitrator.

( 1 ) ON the receipt of a tender from M/s. International Chemicals Corporation (India) (the respondents herein), an Acceptance of Tender No. CDP-2/103/52/049/28-7-73 (7)/paod/ 1152 dated August 13, 1974 for the supply of 3,700 numbers Piperazine Adipate Container of 500 grams @ Rs. 34 per unit amounting to Rs. 1,25,800 by November 30, 1974 was issued by the Union of India (the petitioner herein ). The said Acceptance of Tender was subject to the conditions of the contract contained in Form No. DGSandd-68 (Revised) including Clause 24 contained therein which is the arbitration agreement between the parties. Certain disputes and differences arose between the parties to the said contract. An application under Section 20 of the Arbitration Act, 1940 (hereinafter REFERRED TO to as the Act) was filed by the respondents herein praying that the said arbitration agreement be filed in this Court and disputes/differences between the parties to the contract be REFERRED TO to arbitration in accordance with the said arbitration clause. This was registered as suit No. 240-A of 1975.

( 2 ) THE respondent herein also filed an application, being IA 1063 of 1975 in suit No. 240-A of 1975 alleging therein that they had received communications dated November 27, 1974 and March 6, 1975 from the Union of India to the effect that M/s. International Chemicals Corporation (India) have failed to perform their part of the contract to the satisfaction of the Union of India and thus the Union of India is entitled to claim Rs. 43,144. 04 towards extra expenditure incurred on account of risk purchase in terms of clause 14 of the General Conditions of the Contract between the parties. On April 28, 1975 this Court issued notice on that Interlocutory Application and an interim order was granted that Union of India will not recover the sum of Rs. 43,144. 04. The interim order granted on April 28, 1975 was made absolute on May 23, 1975 and IA 1063 of 1975 was disposed of. It was, however, observed that as and when the Union of India wants any variation in the order, it is at liberty to move an appropriate application.

( 3 ) ON July 23, 1975 counsel for the parties in the said suit made statements that the said arbitration agreement be filed in the Court and the disputes be REFERRED TO to the sole arbitration of an officer in the Ministry of Law who will be appointed by the Director General of Supplies and Disposals. The Court directed that the arbitration agreement be filed and that the Director General of Supplies and Disposals in the Ministry of Supply may appoint an officer in the Ministry of Law to act as an arbitrator in order to decide all the disputes that have arisen between the parties. Accordingly, an arbitrator was duly appointed. The appointed arbitrator has entered upon the reference and took upon himself the task of settling the disputes between the parties but the proceedings are still pending.

( 4 ) UNION of India (the petitioner herein) has now moved the present O. M. P. on the apprehension that the respondents with a view to defeat the claims of the petitioner that may be allowed by the arbitrator, are likely to withdraw the amounts payable to the respondents which amounts may be pending payments by the Pay and Accounts Officer. It is pleaded that the interest of the petitioner will be seriously prejudiced and it will be difficult for the petitioner to recover the amount from the respondents in spite of an award to be made by the arbitrator in its favour. A prayer is made for modification of the order dated May 23, 1975 passed by the Court and for restraining the respondents from realising the amounts in dispute from the Pay and Accounts Officer till the award to be made by the arbitrator is made a rule of the Court.

( 5 ) IN the reply it is averred that the petitioner was yet to establish before the arbitrator that it were the respondent who committed the breach of the contract and because of breach the petitioner suffered a loss of