A. KULASEKARAN, J.

This application has been filed under section 9(ii)(e) of the Arbitration and Conciliation Act, 1996, praying to pass an order of injunction, restraining the respondents 1 and 2 from proceeding with the proposed arbitration proceedings on 14.5.2001 or any other date subsequent thereto at Udipi, pending disposal of the application.

It is the case of the applicant herein that the respondents 1 and 2 herein have leased out some machineries under agreement dated 30.12.1995 to the applicant herein. In the said agreement, under clause 32, arbitration is provided. One Mr. B. I. Sharma, the 3rd respondent herein, was appointed as arbitrator who has sent notice to the parties including the applicant herein. According to the applicant, the respondents 1 and 2 had unilaterally chosen to appoint the arbitrator of their choice which is illegal and arbitrary and unsustainable in law. It is the case of the applicant that, as per the Arbitration and Conciliation Act, both the parties have option to choose their respective arbitrators, and in turn, those arbitrators have a choice to appoint an umpire to ultimately decide the issue in case, there is conflict between them. But according to the applicant herein in this case, the third respondent arbitrator has been appointed unilaterally. Explaining all these aspects, the applicant sent a letter dated 27.4.2001 to the respondent and forwarded a copy to the arbitrator stating that they propose to appoint Mr. R. S. Ramanathan, Advocate, Chennai, as their arbitrator. It is also their case that the cause of action in respect of the transaction arose only at Chennai, that the branch office of the respondents 1 and 2 is also situate at Chennai and not in Udipi or in any other place of Karnataka. According to the appellant, on reasonable apprehension, they have filed the application seeking for injunction since they felt the arbitrator may decide the matter ex parte in case, if they do not appear on the date fixed on 14.5.2001 by the arbitrator, the 3rd respondent herein, and this court has granted interim injunction on 8.5.2001 and the same was extended further.The respondents 1 and 2 filed a counter-affidavit as follows : The petitioner had availed a lease facility on 30.12.1995 and took on lease certain equipments required for their factory. In the lease agreement, there has been a provision for arbitration. Under the said lease agreement, a sum of Rs. 2, 47, 500 was payable per month for a period of 60 months. Subsequently, the petitioner expressed some difficulty to make payments as referred to above and requested the respondents to make reschedule of monthly payments in order to enable them to pay a lesser instalment. Accordingly, a rescheduled agreement (supplementary agreement) dated 30.6.1999 was entered into between the parties. It is the case of the respondents that except the reschedule of payment, the other conditions in earlier agreement dated 30.12.1995 are same. Even after the supplementary agreement, the applicant failed to pay the monthly instalments. Consequently, the agreement was terminated by the respondents 1 and 2. Thereafter, a notice dated 6.3.2001 was issued to the applicant calling upon them to pay the outstanding amount of Rs. 1, 93, 59, 687 within 15 days therefrom. In the said notice, they have also pointed out that in the case of non-compliance, the matter would be referred to arbitrator whose name is mentioned in the agreement dated 30.12.1995. The applicant having received the said notice, sent a reply with certain false allegations. No payment was received after the said notice. Therefore, the matter was referred to the arbitrator whose name is mentioned in the agreement dated 30.12.1995. The arbitrator also sent notice to the parties on 10.4.2001 by fixing the hearing on 14.5.2001. The said notice was served on the applicant herein. According to the respondents 1 and 2, the arbitrator and the venue of arbitration was also fixed by mutual c