JUDGMENT : Mr. Anant Ramanath Hegde, J. - This appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act, 1996' for short) has been filed by the respondents in the proceeding under Section 9 of the Act. In terms of the order dated.29.10.2022 the application is allowed and the respondents are directed to furnish cash security of Rs.50.00 crores along with interest @ 18% per annum from the date of payment. The respondents have also been restrained from alienating or creating any third-party interest over petition properties (hereinafter referred to as 'schedule properties') till the disposal of arbitration proceedings. 2. The parties to the proceeding are referred to as appellants and respondents, as per their designation before this Court. 3. Brief facts necessary for adjudication of the case can be summarised as under: - the appellants and respondent No.1 entered into a Memorandum of Understanding (MOU) on 06.10.2018 to develop scheduled properties. Thereafter, on 04.12.2018 a supplementary agreement was executed modifying certain terms and conditions of the MOU. 4. On 10.10.2018 the respondents paid Rs.25.00 crores to the appellants as security deposit. Later, on 3.12.2018, respondents paid Rs.25.00 crores to the appellants. In all Rs.50.00 crores is paid towards security deposit. The payment of Rs.50.00 crores is not in dispute. The appellants acknowledge the receipt of Rs.50.00 crores. 5. Alleging violation of the terms and conditions of the MOU as well as supplementary agreement, the respondents filed petition under Section 9 of the Act, 1996 praying some interim measures before the commencement of the arbitral proceedings. The appellants opposed the Section 9 petition and urged that there is no arbitration clause and prayed for dismissal of the petition on merits. 6. It is relevant to note that in a petition filed under Section 11 of the Act, 1996, this Court has kept open the question of the existence of an arbitration clause to be decided by the arbitrator. 7. After hearing the parties, the District Court allowed the application and directed the appellants to furnish cash security of Rs.50.00 crores along with interest @ 18% per annum from the date of payment. 8. Aggrieved by the said order, the appellants are in appeal. 9. Heard Sri D.R. Ravishankar, learned Senior Counsel for the appellants and Sri G. L. Vishwanath, learned Senior Counsel for the respondents. 10. 8. Aggrieved by the said order, the appellants are in appeal. 9. Heard Sri D.R. Ravishankar, learned Senior Counsel for the appellants and Sri G. L. Vishwanath, learned Senior Counsel for the respondents. 10. Learned Senior Counsel appearing for the appellants submitted that the question relating to the maintainability of the proceeding before the arbitrator is kept open, and that being the position, the impugned order could not have been passed. It is urged that in view of the supplementary agreement dated 04.12.2018, the earlier agreement dated 06.10.2018 stands superseded in respect of the matters contained in the supplementary agreement, and the arbitration clause is not found in the supplementary agreement dated 04.12.2018, as such the dispute is not arbitrable and Court acting under Section 9 of the Act, 1996 does not have the jurisdiction to entertain the petition. 11. The claim for payment of interest @ 18% per annum is nothing but the claim for damages as such there cannot be an order to furnish the security for the amount claimed by way of damages. 12. Learned Senior Counsel appearing for the appellants referring to Clauses No.3 and 15 of the MOU dated 06.10.2018 urged that the MOU provided for certain terms and conditions to be fulfilled by both parties to the MOU. And Clause No.15 provides for termination of the agreement only in the event of the appellants not fulfilling the terms and conditions to the satisfaction of the respondents. The appellants are liable to refund the entire amount received by them along with interest @ 18% p.a. only in the event of appellants defaulting in their obligations under the agreement. It is further urged that the question, who violated the terms and conditions is to be decided by the competent forum. This being the position, impugned order to furnish cash security for Rs.50.00 crores and interest @ 18% per annum is impermissible. 13. It is also urged that the Court acting under Section 9 of Act, 1996 while passing the order to direct the parties to the proceedings to furnish security is guided by the provisions of Order XXXVIII of the Code of Civil Procedure. It is contended that conditions precedent to grant an order similar to an order XXXVIII of the Code have not been fulfilled. 14. It is contended that conditions precedent to grant an order similar to an order XXXVIII of the Code have not been fulfilled. 14. Alternatively, it is submitted that the appellants are ready to deposit Rs.50.00 crores without obligation to deposit interest on the said amount, and the same shall be kept in a nationalized bank in an interest-earning deposit and the amount be paid to the successful party after the adjudication of the dispute by the competent forum. 15. Learned Senior Counsel appearing for the respondents would submit that the order impugned is passed taking into consideration that the appellants have admitted the receipt of Rs.50.00 crores and the termination clause No.15 entitles the respondents to receive the security deposit paid by the respondents along with interest @ 18% per annum in the event of termination of the agreement. 16. It is further urged that the supplementary agreement has only imposed additional obligations on the appellants and has not diluted any of the obligations cast on the appellants in terms of the MOU dated 6.10.2018 and the arbitration clause found in the agreement is intact as clause No.13, of the supplementary agreement dated 04.12.2018 does not modify the arbitration clause. 17. It is further urged that the appellants have failed to obtain the grant order from the KIADB as agreed in the agreement dated 06.10.2018 and further without any consent and knowledge of the respondents have entered into an agreement for sale on 06.12.2019 in respect of the portion of the properties covered by the agreement dated 06.10.2018. 18. It is also submitted that the appellants created a third-party right/charge over the portion of scheduled properties and collected a huge amount from third parties suppressing the MOU dated 06.10.2018 and 04.12.2018. It is further urged that the Court under Section 9 of the Act, 1996 has ample power to pass appropriate interim orders and is not governed by the requirements contained in Order XXXVIII Rule 5 of the Code of Civil Procedure. 19. In support of his contention, the learned Senior Counsel for the respondents relied upon the judgment of the Apex Court in the case of Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited Reported In 2022 Live law (SC) 765. 20. 19. In support of his contention, the learned Senior Counsel for the respondents relied upon the judgment of the Apex Court in the case of Essar House Private Limited v. Arcellor Mittal Nippon Steel India Limited Reported In 2022 Live law (SC) 765. 20. It is further urged by the learned Senior Counsel for the respondents that the order under challenge is neither capricious nor perverse or arbitrary and there is no scope to interfere with the impugned order. 21. This Court has considered the contentions raised at the bar and perused the order under challenge. 22. As far as the contention relating to the scope of the Court under Section 9 of the Act, 1996 is concerned, the Apex Court in the case of Essar House Private Limited Supra in paragraphs No.49 and 50 has held as under: 49. If a strong prima facie case is made out and the balance of convenience is in favour of interim relief being granted, the Court exercising power under section 9 of the Arbitration Act should not withhold relief on the mere technicality of absence of averments, incorporating the grounds for attachment before judgment under Order 38, Rule 5 of the CPC. 50. Proof of actual attempts to deal with, remove or dispose of the property with a view to defeat or delay the realization of an impending Arbitral Award is not imperative for grant of relief under section 9 of the Arbitration Act. A strong possibility of diminution of assets would suffice. To assess the balance of convenience, the Court is required to examine and weigh the consequences of refusal of interim relief to the applicant for interim relief in case of success in the proceedings, against the consequence of grant of the interim relief to the opponent in case the proceedings should ultimately fail. 23. The Clause No. 13 of the supplementary agreement prima facie indicates that terms of the MOU dated 6.10.2018 are modified partially and other terms and conditions of the MOU are intact. Prima facie there is nothing on record to suggest that the arbitration clause which is in the MOU dated 6.10.2018, is done away with in the supplementary agreement. In the instant case, admittedly the respondents have paid Rs.50.00 crores to the appellants. And the appellants have acknowledged the receipt of Rs.50.00 crores. Prima facie there is nothing on record to suggest that the arbitration clause which is in the MOU dated 6.10.2018, is done away with in the supplementary agreement. In the instant case, admittedly the respondents have paid Rs.50.00 crores to the appellants. And the appellants have acknowledged the receipt of Rs.50.00 crores. Details of the payments are as under: Sl no Cheque Date Cheque No. Amount 1 10.10.2018 448108 drawn on Federal Bank 5,00,00,000 2 10.10.2018 448109 drawn on Federal Bank 7,50,00,000 3 10.10.2018 448111 drawn on Federal Bank 12,50,00,000 4 03.12.2018 878608 Drawn on Vijaya Bank 25,00,00,000 24. Clause No.15 of the MOU provides for a refund of the amount received along with the interest @ 18 % per annum in the event of a appellants not fulfilling the terms and conditions to the satisfaction of the respondents. From the grounds urged in the appeal memo, it is seen that the appellants raised the grounds on the maintainability of the petition on the premise that there is no arbitration clause. No specific default on the part of the respondents with reference to their obligations in the MOU or supplementary agreement is pointed out. 25. However, the contention of the respondents relating to default on the part of the appellants is prima facie made out as the appellants have not acquired ownership over the properties mentioned in the MOU within the time stipulated. In addition, it is also forthcoming that appellants have also executed an agreement for sale in favour of a third party in respect of the portion of the properties covered under the MOU. This being the position Clause No.15 is invoked by the respondents and they are claiming a refund of Rs.50.00 crores along with interest as agreed under the MOU. 26. As already noticed receipt of Rs.50.00 crores is admitted by the appellants. Prima facie no materials are placed to counter the defaults pointed out by the respondents. This being the position, the respondents have raised a dispute to recover the security deposit paid by them by invoking Clause No.15 of the MOU. 27. As an interim measure, the respondents prayed for a restraint order against the appellants from alienating the schedule properties and a direction to the appellants to furnish a bank guarantee of Rs.80.60 crores. 28. This being the position, the respondents have raised a dispute to recover the security deposit paid by them by invoking Clause No.15 of the MOU. 27. As an interim measure, the respondents prayed for a restraint order against the appellants from alienating the schedule properties and a direction to the appellants to furnish a bank guarantee of Rs.80.60 crores. 28. The Court acting under Section 9 of the Act on considering Clause No.15 of the MOU and on noticing the agreement for sale dated 06.12.2019 executed by the appellants in favour of M/s Micro Labs Limited for Rs.32.00 crores has concluded that the respondents have made out a prima facie case for a grant of interim measure and directed the appellants to furnish cash security to the tune of Rs.50.00 crores along with interest @ 18% per annum. 29. Having regard to the fact that Rs.50.00 crores are paid by the respondents and receipt of the same is admitted by the appellants and having regard to Clause No.15 of the MOU, the respondents are entitled to seek refund of the security deposit, this Court is of the view that the respondents have made out a case for a direction to the appellants to deposit the amount paid by them. 30. As far as interest @ 18% per annum claimed on Rs.50.00 crores from the date of payment is concerned, this Court prima facie finds that said stipulation to pay interest falls under section 74 of the Indian Contract Act, 1872. It does not fall in the realm of unspecified damages. Under these circumstances, this Court is also of the view that a prima facie case is made out to lay a claim for interest @ 18% per annum. 31. Having gone through the impugned order, this Court does not find anything arbitrary, capricious or perverse in the order directing the appellants to furnish cash security to the tune of Rs.50.00 crores. However, what is to be noticed is the Court directing cash security to the tune of Rs.50.00 along with interest @ 18% per annum further restraints the appellants from alienating, transferring, parting with possession, and creating third party interest over the schedule properties. 32. This Court is of the view that the further restraint order is unjustified, after directing the appellants to furnish cash security to the tune of Rs.50.00 crores along with interest @ 18% per annum. 33. 32. This Court is of the view that the further restraint order is unjustified, after directing the appellants to furnish cash security to the tune of Rs.50.00 crores along with interest @ 18% per annum. 33. It is submitted that arbitration proceedings have already commenced. Hence, taking into consideration the scope of Section 9 in terms of the law laid down in the case of ESSAR HOUSE supra, and the terms and conditions of the MOU entered into between the parties, this Court is of the view the order directing deposit Rs.50.00 crores by the appellants is to be upheld. 34. The appellants shall furnish security of immovable property to secure payment of interest @ 18% per annum on Rs.50.00 crore from the date of payment till the date of furnishing security, to the satisfaction of the District Court. 35. The payment of Rs.50.00 crores and security for the interest amount referred to above shall be furnished within four weeks from today. On compliance of the aforesaid order, the restraint order granted by the District Court restraining alienation shall stand vacated. 36. The amount to be deposited in Court shall be kept in Fixed deposit till the conclusion of the arbitral proceeding and the same, along with interest shall be disbursed in terms of the final award of the arbitrator. 37. This Court has not expressed anything on the merits of the case. The observations made in this appeal are only confined to the merits of Section 9 petition. All the contentions of the parties, including maintainability of the dispute before the arbitrator, non compliance of the obligations of the respondents under the MOU and supplementary agreement are kept open. 38. Hence the following, ORDER Impugned order dated 29.10.2022 in A.A.No.2/2022 on the file of VIII Additional District Court, Bengaluru rural is partly modified in the above said terms. Appeal is partly allowed.