- (1.) THIS revision petition is directed against the order of the Subordinate Judge 1st Class, Chandigarh dated May 19, 1977, dismissing the application filed by the petitioner under Section 33 of the Arbitration Act, 1940 (for short, the Act) challsnging the existence of the Arbitration Agreement.
(2.) THE facts: The petitioner is a public limited company with its registered Head Office at Yamunanagar in Haryana It is the proprietor of Indian Sugar and General Engineering Corporation, an engineering unit engaged in the manufacture of sugar and other machinery. The Government of Haryana wanted to set up two sugar plants in the State in the co-operative sector one at Karnal and the other at Sonepat. The State Government constituted a Sugar Mill Machinery Purchase Committee (hereinafter referred to as the Committee) to advise it with regard to the placing of orders for the purchase of plant and machinery. The Committee invited tender from the Indian Sugar and General Engineering Corporation vide letter dated July 18, 1973 for supply of plants and machinery for Karnal and Sonepat Co-operative Sugar Mills. The tender notice contained the terms and conditions of the supply. Clauses 6 and 12 of the tender notice provided that orders were to be placed and agreement entered into by a co-operative society. Indian Sugar and General Corporation in response to the tender notice dated July 18, 1973, submitted its quotations in quadruplicate for the supply of plant. Along with the quotations, printed terms of business were also enclosed. In clause 8 of the quotation, terms of payment were also specified. A meeting was held between the representatives of the petitioner and the Committee on August 21,1973, in which certain discussions about the specifications of the plant and terms of escalation in price etc took place. A memo of revised terms as a result of the discussion was prepared and handed over to the Committee. On September 28, 1973, the Chairman of the Committee sent a following telegram to the petitioner : "reference discussion with Chairman, Plant Purchase Committee last week Your revised quotation to supply one sugar mill plant at Karnal on turnkey basis is accepted. Please depute authorised representative along with draft agreement to complete formalities of the contract. " The petitioner acknowledged the receipt of the telegram from the Committee on October 10, 1973 and sent the following telegram to the Committee: "re your telegram 28th September deputing representative Monday 15th October with draft agreement " On October 15, 1973, representatives of the petitioner came to Chandigarh with the draft agreement but were informed that the Chairman of the Committee had fallen ill, detailed discussions could not be held. The petitioner sent six copies of the draft agreement along with their letter dated October 26, 1973. On November 30, 1973, the Registerar, Co-operative Societies, Haryana, Chandigarh sent a letter to the Indian Sugar and General Engineering Works Ltd. , Yamunagar, which reads as under : "this has reference to your letter No.-----------Dated---------- -. A copy of the draft agreement which is proposed to be executed between you and the Kama! Co-operative Sugar Mill Society is enclosed. There are a few clauses in the draft agreement about which the representatives of the buyer society would like to have discussion with your authorised representative. Kindly let us know immediately some date in the second week of December when your representative could visit Chandigarh so that a meeting for the purpose may be fixed at Chandigarh. " The terms of the draft agreement sent by Committee differed from the revised offer of the petitioner with respect to various matters. On December 31, 1973, the petitioner wrote to the Chairman of the respondent-Committee that instead of accepting its fresh offer contained in the draft agreement, the respondent-Committee sent a counter offer by sending a draft agreement vide their letter No. SMA/14816, dated November 30, 1973. In its letter date December 31, 1973, the petitioner offered that instead of increasing the price, they were prepared to leave the prices as these were if the clause providing for escalation in prices was left without any ceiling. On January 10, 1974, the Chairman of the respondent-Committee invited the authorised representative of the petitioner Company for discussion. On January 21, 1974, the respondent-Committee served a registered notice upon the petitioner to sign a formal agreement. On February 2, 1974. the petitioner replied the aforesaid letter and denied that there was any concluded contract arrived at between the parties and in the letter it was stated thus: "it was a specific term of our offer that until the terms of contract were duly agreed to, accepted and signed by us, there was no binding arrangement. Even your telegram of 10th January 1974 which refers to 'your offer for sugar mill plant' clearly shows that both parties proceeded on the footing that the matter was under negotiation and at no stage finally concluded. It is not correct that we had agreed to deliver the factory ready for commercial commissioning by 1st November, 1975. The terms of the offer with regard Co the setting up of the factory as you well know were still under negotiations and discussions. "
(3.) ON January 16, 1976, a communication was received by the petitioner from the respondent Committee intimating that the former had failed to execute the job at the contract rate on the agreed terms and conditions and the Sugar Mill authorities had to make risk purchase, the excess of which worked out to Rs. 1,96,84,175/ -. A dispute having arisen between the parties, the respondent Committee had referred the dispute to arbitration in terms of clause 20 of the tender. This notice led to the filing of the petition under Section 33 of the Act.;