UNION OF INDIA Vs. HIMCO INDIA PRIVATE LTD

JUDGEMENT

(1.) THIS is an appeal by the Union of India from an order passed under Section 20 of the Indian Arbitration Act. The Union of India invited tenders for the supply of certain goods. The invitation contained inter alia the following query:

(2.) DEFENDANTS M/s. Himco (India) Private Ltd. submitted their tender dated October 3, 1956 wherein they stated at the foot of the query mentioned above as follows:-- "We feel there should be an unattached arbitrator". The Union of India accepted the tender by A/T No. Cal./PR-II (3)/16359-G/448 dated November 30, 1956. The acceptance stated inter alia that the conditions of the contract would be as contained in Form No. W. S. B. 138 as amended up to date. Clause 21 of the said Form contained the following arbitration clause:

(3.) WE are satisfied that there was a concluded arbitration agreement between the parties in terms of clause 21 of Form No. W. S. B. 133. With respect we cannot agree with the learned Judge's finding that the parties entered into a modified arbitration agreement. By their tender the defendants made a suggestion that there should be an unattached arbitrator. The Union of India did not accept this suggestion and by its acceptance of tender plainly stated that terms of the contract and of arbitration agreement would be as contained in Form No. W. S. B. 133 as amended up to date. The acceptance of tender not being an unqualified acceptance of the offer of the defendants amounted to a counter-offer by the Union of India. By their subsequent conduct the defendants accepted this counter-offer. They acted upon the footing that there was a concluded contract upon the terms contained in the acceptance of tender, dated November 30, 1956 and on that footing supplied goods to the Union of India. The defendant's letter, dated the 13th April 1960 refers to the supplies as having been made under the acceptance of tender, dated November 30, 1956. It is common case before us that there was a concluded contract together with a concluded arbitration agreement. The defendants seek to enforce claims against the Union of India under this concluded contract; whereas the Union of India seeks to enforce the arbitration agreement contained in it. The terms of this concluded bargain are recorded in the acceptance of tender which on its face stated that the contract was on the terms specified in it and in the schedule annexed thereto and that those documents would be the sole repository of the transaction. In these circumstances we are bound to hold that the parties entered into an arbitration agreement in terms of clause 21 of Form No. W. S. B. 133, and not into a modified arbitration agreement as suggested by the defendants.