1. Petitioner No.1 is a Company registered under the Companies Act. Petitioner No.2 is its Assistant Vice-President. In the present petition, the petitioners have challenged an order dated 21.10.10, passed by learned Additional District Judge, Ahmedabad Rural below Application Ex.10 in Civil Misc. Application No.31/10 by which the learned Judge directed the petitioners to deposit 75% of Rs.48,64,782/- awarded by the Arbitrator in favour of the respondents within one month from the date of the order further providing that failure to comply with the said direction will result into automatic dismissal of the application of the petitioners under section 34 of the Arbitration and Conciliation Act, 1996.

2. Petition arises in following factual background:

2.1 Petitioner No.1 is a company engaged in the business of construction and civil engineering works. Petitioner No.1 Company was awarded rehabilitation and construction work of road project by the Madhya Pradesh Road Development Corporation for which the petitioners required crushing plant with a capacity of 200 tonnes per hour. Order for setting up such a plant called Skid Mounted 200 TPH Crushing Machine was placed by the petitioners with respondent No.1 company by purchase order dated 21.2.2006.

2.2 With respect to execution of the said contract, disputes arose between the parties. It is the case of the petitioners that respondent No.1 did not perform its duties under the contract and never set up the plant as per the specifications with satisfactory performance. Respondents however deny such contentions. To resolve the issues through arbitration as contained in the arbitration clause in the agreement between the parties, the petitioners issued notice dated 11th January 2008 conveying the respondents that the petitioners are invoking arbitration clause and calling upon the respondents to resort to arbitration to settle the disputes in terms of the purchase order. Petitioners' notice dated 11.1.2008 was replied to by the respondents vide communication dated 28.4.2008 denying the allegations and asserting that in fact, the petitioners are liable to pay certain amounts to the respondents.

2.3 In the meantime, the petitioners proceeded further and appointed one Shri A.B.Desai as Sole Arbitrator to adjudicate the disputes and conveyed the said decision to the respondents under letter dated 17th March 2008.

2.4 Arbitrator Shri A.B.Desai rendered his award dated 15.12.2009 and held that petitioner No.1 company is liable to pay Rs.48,64,782/- to respondent No.1 Company along with interest at the rate of 10% per annum. Though subsequently, the Arbitrator under its communication dated 29th December 2009, ordered certain corrections to be made in his previously declared award, the effective direction for payment of Rs.48,64,782/- with interest remain unchanged.

2.5 The petitioners aggrieved by the said award approached the learned Additional District Judge, Ahmedabad Rural for setting aside the same under section 34 of the Arbitration and Conciliation Act by filing Civil Misc. Application No.31/2010.

2.6 The respondents in the said Civil Misc. Application No.31/2010, filed application Ex.10 and contended that the petitioners herein are required to deposit the awarded amount as per the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter to be referred to as 'the Act of 2006') and since such amount is not deposited, the application challenging the award under section 34 of the Arbitration and Conciliation Act, 1996 is not maintainable. They, therefore, prayed that the said Civil Misc. Application be rejected.

2.7 Petitioner No.1 filed its reply to such application Ex.10 contending that there is no obligation to make pre-deposit under the Act of 2006 since the proceedings are instituted for setting aside the arbitration award under section 34 of the Arbitration and Conciliation Act. It was further contended that section 19 of the Act of 2006 requiring the deposit of 75% of