SKANSKA CEMENTATION INDIA LIMITED Vs. BAJRANGLAL AGARWAL

JUDGEMENT

(1.) BOTH the petitions are being disposed of by a common order as there are common challenges in both the petitions. The common challenges may be set out as under:-

(2.) A few facts may be now noted to enable this Court to dispose of the present petitions. Admittedly the petitioners in both the petition had placed purchase orders on the respondents. The dispute is regarding the balance unpaid amounts and the interest on the unpaid amounts. The petitioners in support of their contentions that there was no arbitral clause relied on the purchase order and more specifically Clauses 1, 10 and 11 which may be reproduced as under:-1. The execution of this order shall be deemed to be an acceptance of the conditions stated herein. The contract shall be deemed to have been made in Bombay, and shall be subject to jurisdiction of courts in Bombay.

(3.) CONSIDERING this background the issue will have to be considered. The purchase order which bars the remedy of party of having recourse to Court of law by leaving the matter for decision of the company would normally if an issue was raised would have been held to be void considering section 28 of the Indian Contract Act. This issue, however, was not raised nor answered before the Arbitral Tribunal. It may also not be necessary to advert to section 28 of the Contract Act in the discussion considering the contention and other material on record. The main contention as raised on behalf of the petitioners is based on Clauses 1, 10 and 11 of the purchase order. The purchase order by itself would not be a contract between the parties. It is only on accepting the terms of the purchase order would a contract come into being. Clause 1 of the purchase order does provide that execution of this order shall be deemed to be acceptance of the conditions stated hereinabove. Clause 11 of the purchase order provided that the respondents could draw attention of the company to conditions which they find unacceptable. By the terms contained in the delivery challan the petitioner company is deemed to have been informed that the condition that their decision was final was not acceptable and that the dispute if any should be referred to arbitration of the Bharat Chamber of Commerce. As such even though the purchase order was received, the respondents did not accept the purchase order and drew the attention of the company that the term of resolving the dispute was not acceptable by sending the goods under delivery challan which contained Clauses 4 and 7. Clause 4 made it clear, that it is in the nature of counter offer by the respondents to the petitioners for accepting the goods. In other words the respondents had not agreed to Clause 10 of the purchase order. Even otherwise considering Clause 11 the respondent had specifically informed the petitioners that they were sending the goods under the delivery challan with a different condition. The petitioners accepted the goods under the challan without protest. As such pursuant to the counter offer of counter proposal the terms of the delivery stood amended even considering Clause 11 of the purchase order and accordingly the contract apart from the terms and conditions of the purchase order which were agreed by the parties would contain additional terms under which the goods were dispatched and accepted by the petitioners. The petitioners also sent invoices. Under the invoices again there was an arbitral clause. The invoices were accepted. Moneys paid under the invoices without protest. To my mind, therefore, the contract between the parties clearly contemplated a provision for arbitration. The order dated 1st August, 2001 of the Arbitral Tribunal has taken into account these terms in the delivery challan. To my mind, therefore, the issue having been in issue before the Arbitral Tribunal and the Tribunal having taken decision, which it was capable of taking considering the construction of the terms, the said view cannot be said to be a view impossible of being taken. It was no doubt pointed out that the agreement signed on 12th October, 2001 could not amount to an arbitral agreement. The Arbitral Tribunal has not proceeded on that agreement as the decision on the preliminary jurisdiction was much earlier. If the subsequent agreement is correctly read, all that the agreement sets out is that the Arbitral Tribunal as constituted will decide the disputes as per the arbitration Rules of the Chamber. In other words the procedure to be followed by the Arbitral Tribunal as constituted would be the procedure of the chamber. This could have been agreed upon considering section 19 of the Act of 1996. That leaves us with the judgment relied upon by the learned Counsel for the petitioners in the case of (M/s. Divya Shivlaks Impex v. Shantilal Jamnadas Textiles (P.) Ltd.) 1999 (2) Bom. C. R. 734. In that case there was no provision in the contract for arbitration. The arbitral clause was sought to be invoked based on the printed term in the invoice which read as under:-