JUDGMENT :

N.V.ANJARIA,J.

Heard learned advocate Mr.Mehul Shah with learned advocate Mr.Jenil Shah for the appellant and learned advocate Mr.Punit Juneja for the respondent.

2. The present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is directed against judgment and order dated 24th September, 2021 passed by learned 12th Additional District Judge, Surat in Commercial Miscellaneous Application No.125 of 2021. The said application was under Section 9 of the Arbitration Act, 1996, which came to be rejected by the court below. It was further directed that the amount of bank guarantees lying before the said court shall be paid to respondent No.2 after due verification.

3. The appellant which is engaged in the business of water proofing work and related services, was provided with work orders by respondent No.2. They were different work orders dated 25th July, 2017, 09th September, 2017, 21st August, 2020 as well as the amended work orders. The aggregate sum of the work orders was Rs.02,67,00,000/-. The appellant had given bank guarantees towards the said work orders to the extent of 10% retention amount.

3.1 It appears that disputes arose between the parties in relation to the execution of work contract. Respondent No.2 threatened to invoke the bank guarantees. At that time, application under Section 9 came to be filed by the appellant seeking the prayer to prohibit respondent No.2 from invoking the bank guarantees. In the said proceedings, parties reached to an amicable settlement. In view of the settlement, the parties executed irrevocable performance bond dated 19th February, 2021 and the proceedings under Section 9 came to be withdrawn. It further appears that in light of the agreement executed between the parties at that time, the appellant executed two unconditional bank guarantees of respondent No.1 Bank in favour of respondent No.2. The appellant stated that despite having employed specialised manpower to execute the work and though the appellant had incurred additional cost towards the same, respondent No.2 proceeded to fraudulently invoke the bank guarantee with an intention not to pay the outstanding dues of the appellant and usurp the payment illegally. With such premise of facts, application under Section 9 came to be filed by the appellant.

3.2 Prayers made by the appellant in the application under Section 9 of the Act were as under.

“(a) restraining the Respondent No.1 Bank in acting furtherance to its emails dated 27th July, 2021 at 7:54 pm sent by the Respondent No.1 Bank and or acting on letter dated 26th July, 2021 issued by the Respondent No.2 to Respondent No.1 being Exhibit – I & J.

(b) to restrain Respondent No.1 Bank in acting in furtherance to its emails dated 27th July, 2021 at 7:54 pm sent by the Respondent No.1 Bank and or acting on letter dated 26th July, 2021 issued by the Respondent No.2 to Respondent No.1.

(c) to restrain the Respondent No.2 in taking any steps in invoking the bank guarantees at Exhibit I & J.”

3.3 The aforesaid application under Section 9 of the Act for interim measures was replied to by respondent No.2 by filing reply at Exh.11. It was contended that as per the agreement, the appellant was required to complete the work at both the sites before 22nd March, 2021. The work was not effectively carried out, it was stated, and that as per the joint inspection report of June, 2021, the work was not upto the standard as the leakages were noticed which were admitted by the appellant.

3.4 It was further stated that on account of default of the appellant in carrying out the work as stipulated in the agreement, new contractor was required to be engaged. The work was completed and the amount payable to the appellant was deducted from the amount payable to such new contractor. At that time, pending dues of the appellant was Rs.15,45,128/- minus the amount paid. It was, theref