D. K. KAPUR ( 1 ) THE appellant filed an application under Section 20 of the Arbitration Act, 1940, praying that an arbitration agreement be filed and disputes and differences between the parties be REFERRED TO to arbitration. The said application was tried on the Original Side of this Court and by the judgment under appeal it was held that this Court has no territorial jurisdiction. It was directed that the petition be returned. ( 2 ) THE appellant has appealed under Section 10 of the Delhi High Court Act, 1966, read with Section 39 of the Arbitration Act, 1940. It is submitted in appeal that this Court does have jurisdiction and the matters in dispute should be REFERRED TO in accordance with the arbitration agreement to an arbitrator to be appointed in accordance therewith. ( 3 ) THE facts of the case are not disputed. The appellant deals with the sales and services of Cummins Diesel Engines in India. Those spare parts are supplied by the Cummins Engine Company, U. K. , and Cummins Engine Company, U. S. A. , and there was a rate contract for the supply of spare parts for these engines. On 1st June, 1966, as per Exhibit D-8, the appellant informed the Director General of Supplies and Disposals that it was necessary that a new rate contract should be concluded immediately. The letter seems to show that there was an existing rate contract dated 7th May, 1965, which expired on 31st December, 1965. The Letter Exhibit D-8 shows that the previous prices were to remain firm up to 31st December, 1966, and thereafter there would be a change in the price. This indicates the background of what eventually happened. ( 4 ) ON 25th October, 1966, Shri V. K. Gupta, Assistant Director of Supplies, wrote a letter informing the appellants that their proposal had been accepted on certain terms and conditions. The relevant part of the letter Exhibit D-9 is : "dear Sirs, I have to inform you that your offer noted above for the stores specified above, has been accepted in the. terms and conditions specified herein and in the attached pamphlet entitled Terms and Conditions of the Rate Contract for the supply of spare parts for Earth Moving and Construction Equipment. . . . . . . . . . . . . . . . terms and conditions specified herein and in the attached pamphlet entitled Terms and Conditions of the Rate Contract for the supply of spare parts for Earth Moving and Construction Equipment. . . . . . . . . . . . . . . . " ATTACHED to this are a number of terms and conditions governing the rate contract. Term No. 17 states that the contract will be governed by the terms and conditions detailed in the General Conditions of Contract (Form DGSandd-68) and conditions governing rate contract (Form DGSandd-69 ). It is stated therein that in the proviso to para 2 of form DGSandd-69 the following will be inserted : "provided always that the purchaser (s) shall in any event be bound to order from the contractor stores as detailed in the R/c worth Rs. 1,000. " AT the end of the rate contract the names of the purchasers against the rate contract are mentioned. They are the President of India and Governors of 15 States including the Governor of U. P. , Heads of Organisations of Corporations in the Public Sector and other Government of India Undertakings. The acceptance of the offer is signed at the end by Shri B. L. Sharma, Deputy Director (Supplies) for and on behalf of the purchaser named earlier. Thus, this acceptance would bind not only the President of India, but various State Governments also. It is provided in the conditions of contract printed in the pamphlet Form DGSandd-68 in clause 20 as follows : "20. LAWS GOVERNING THE CONTRACT. (I) This contract shall be governed by the laws of India for the time being in force. (2) Irrespective of the place of delivery, the place of performance or place of payment under the contract, the contract shall be deemed to have been made at the place from which the accep- tance of tender has been issued. (3) Jurisdiction of Courts. The courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract. " THE rate contract merely specifies the rates and fixes a minimum quantity of Rs. 1,000 worth of stores which have to be ordered under it. The courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract. " THE rate contract merely specifies the rates and fixes a minimum quantity of Rs. 1,000 worth of stores which have to be ordered under it. The effect of the contract is that the President of India and the Governors of 15 States and the Heads of Organisations of Corporations in the Public Sector and other Government of India Undertakings can place orders in accordance with the rate contract. ( 5 ) AS a matter of fact, the present petition under Section 20 of the Act, which is the subject-matter of appeal, relates to an order which was placed on behalf of the State of U. P. That order is dated 7th March, 1967, Exhibit Public Witness 1/a, and specifies the goods to be supplied. Apparently, the goods under the order were of a value of Rs. 13,92,090 and there was some correspondence regarding the desirability, of splitting the order into three parts as each individual order was subject to a monetary limit of Rs. 5,00,000 under one of the terms of the rate contract. In any event, a considerable quantity of spare parts were supplied under the order, but it seems that no payment was received and there was a dispute as to whether the goods were to be retained or returned, and so on. This led to the filing of the application under Section 20 of the Act, seeking the order of the Court for referring the disputes to arbitration. THE Court framed several issues, but the only surviving issues at present are : "3. Whether this Court has territorial jurisdiction to try the petition? (Onus objected to ). 4. Whether a binding specific contract came into existence as a result of the supply order dated 7th of March, 1967? If so what is its effect ?" ON the 4th issue, it was held by the learned Single Judge by judgment dated 25th July, 1973, that there was a binding specific contract, but it was held under issue No. 3 that the Court had no territorial jurisdiction. If so what is its effect ?" ON the 4th issue, it was held by the learned Single Judge by judgment dated 25th July, 1973, that there was a binding specific contract, but it was held under issue No. 3 that the Court had no territorial jurisdiction. ( 6 ) THE conclusion on the question whether the Court had territorial jurisdiction was decided by reference to two judgements, Kundan Lal and others v. The Secretary of State for India in Council, (1904) 39 P. R. No. 72 (1) (P. 223) and Secretary of State v. Madho Ram, (1929) I. L. R. 10 Lahore 493 (2 ). In both these judgments, it was held that when a tender for supply of goods was made which was subject to certain further orders by the Department, then the. tender really amounted to an offer of a continuous nature rather than a contract and it was the actual order that constituted the contract. ( 7 ) FROM this line of reasoning, it was inferred by the learned Single Judge that the Delhi High Court did not have jurisdiction as the contract was brought about by the issue of the supply order Exhibit Public Witness I/a. From this, the learned -Single Judge inferred that the acceptance of tender was the supply order itself and as that document was issued at Kalagarh (U. P.), which was outside the territorial jurisdiction of the Delhi High Court, this Court would have no jurisdiction. ( 8 ) THE learned counsel for the appellant has urged that the rate contract was a contract and it was completed by the issue of the acceptance of tender Exhibit D-9; it is that very acceptance which applied form DGSandd 68 con- taining the arbitration agreement. On the other hand, it is contended by the counsel for the respondent that the document Exhibit D-9, issued from the office of the Director General of Supplies and Disposals is really the offer and the acceptance was. the placing of the supply order. These are the two rival contentions on the question of jurisdiction. ( 9 ) IT appears to us that there was only one tender in this case and the form of that tender was somewhat different. from other tenders because there was a previous rate contract governing the supply of spare parts for Cummins Diesel Engines. These are the two rival contentions on the question of jurisdiction. ( 9 ) IT appears to us that there was only one tender in this case and the form of that tender was somewhat different. from other tenders because there was a previous rate contract governing the supply of spare parts for Cummins Diesel Engines. The appellant had proposed a change in that rate contract by letter dated 1st June, 1966, Exhibit D-8 and after certain discussions and consultations the offer was accepted by issuing Exhibit D-9 which contains all the terms and conditions regarding the supply of goods, a minimum quantity was to be supplied of a value of Rs. 1,000, for more spare parts supply orders could be placed by the various purchasers. An actual supply order placed in accordance with the rate contract would merely specify the goods to be supplied. ( 10 ) THE learned counsel for the respondent has urged that the contract was incomplete when the so-called acceptance of tender Exhibit D-9 was issued and the contract actually became complete when Exhibit Public Witness 1/a, the supply order, was issued. This may be so. In fact, this was the intention of the parties in the rate contract. This does not, however, mean that the rate contract is to be disregarded on the question of jurisdiction. In fact, all the terms regarding the contract are in the rate contract itself. Exhibit D-9, and the supply order merely specifies the goods to be supplied under the said contract, If we look at the supply order alone, then we cannot ascertain any of the terms of the contract. The said supply Exhibit PW1/a is a very short document which does not contain any terms and conditions. It merely states that it is a supply order against rate or running contract and then sets out the following words : "this order which is intended for the supply of the stores detailed in the schedule below, in accordance with the terms and conditions of the Director General of Supplies and Disposals Rate/running contract mentioned above and in the manner specified here, shall operate to create a specific contract between the contractor (with Whom the contract REFERRED TO to and the requisition are placed) of the one part and the. . . . . . . of the other part. . . . . . . of the other part. "these are the only words to be found in the supply order other than the specification of the goods which are described spare parts for Cummins Engine Model NVH-450 fitted on Euclid Bottom Dumpers as per list attached at DGSandd Rate Contract prices . Then below this are given details of Inspecting Officer, the Railway Station to which the goods are to be consigned, the name of the Accounts Officer, which is the Accountant General Uttar Pradesh, Allahabad, etc. The document is signed by Shri J. P. Gupta, Executive Engineer, Procurement Division II, Kalagarh, U. P, If this document was to constitute the contract, it would be difficult to ascertain the terms, so in order to find out what are the terms and conditions of this supply order, we have to look at the rate contract. The rate contract is simply a document which enables such a supply order being placed. The entire contract is thus constituted by the tender, or offer, its acceptance the supply order. ( 11 ) LEARNED counsel for the State of U. P. , has urged that without the supply order there would be no complete contract and he has cited some authorities to support this view. The contention does not have any bearing on the question as to which Court has jurisdiction. ( 12 ) AS already quoted earlier, the contract provides that the jurisdiction of the Court will depend on the place where the acceptance of tender has been issued. The exact words are "the courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contrct". If it is assumed that the supply order is the acceptance of the tender, then of course, the judgment of the learned Single Judge will have to be upheld. But we are of the view that the supply order is not the acceptance of the tender. There are several reasons for this. ( 13 ) FOR one thing, the document Exhibit D-9 opens with the words 1 have to inform you that your offer noted above for the stores specified above, has been accepted in the terms and conditions specified herein . This means that there was an offer which has been accepted. There are several reasons for this. ( 13 ) FOR one thing, the document Exhibit D-9 opens with the words 1 have to inform you that your offer noted above for the stores specified above, has been accepted in the terms and conditions specified herein . This means that there was an offer which has been accepted. The offer constitutes the tender and the document Exhibit D-9 constitutes the acceptance of the tender. It is nowhere specified in the conditions of contract which are to be found in form DGSandd-68 that the contract must be completed with the acceptance of the tender. In fact, acceptance of tender is defined in clause I (a) as follows : " (A) "acceptance of Tender. " means the letter or memorandum communicating to the contractor the acceptance of his tender and includes an advance acceptance of his tender. "the only letter which has informed the contractor that his tender (offer) has been accepted is Exhibit D-9. So, by definition, this is the acceptance of tender. The same set of definitions defines supply order in clause (q) as follows: " (Q) "supply Order" means an order for supply of stores and includes an order for performance of service". This shows that the parties were aware that there could ben an acceptance of tender and there could be a supply order. The first document accepting the offer is the acceptance of tender. That document is Exhibit D-9, and the specific order specifying the goods is Exhibit PW1/a which is an order under the rate contract. Their there is form DGSandd-69, which specially applies to rate contracts. This has as clause I the following clause : "1. Purpose of Contract and parties to the Contract. The parties to the contract, which shall be deemed to be a "rate Contract" and which is intended for the supply of the stores of the descriptions set forth in the Schedule to Tender during the period therein specified, shall be the Contractor of the one part and the Purchaser (s) named in the Schedule to Tender. The parties to the contract, which shall be deemed to be a "rate Contract" and which is intended for the supply of the stores of the descriptions set forth in the Schedule to Tender during the period therein specified, shall be the Contractor of the one part and the Purchaser (s) named in the Schedule to Tender. " IN the second paragraph of this form, it is stated that there is no guarantee as to the number of the stores that will be ordered during the period of the contract and there are some other conditions regarding the supply under the contract and then there is a proviso which reads: - "provided always that the Purchaser (s) shall in any event be bound to order from the Contractor stores as detailed in the Schedule worth Rs. . . . . . . . . . . . . . " THIS proviso thus guarantees at least a minimum supply under the contract. In the present case the contract provided a minimum supply of Rs. 1,000. ( 14 ) THE effect of the clauses in the acceptance of tender just REFERRED TO to and the minimum guarantee that stores worth at least Rs. 1,000 would be ordered under it means that there was a contract for the supply of goods for at least Rs. 1,000, but the purchasers could order additional goods under the contract at the rates specified therein by placing further supply orders. The contract was, therefore, firm for the supply of goods worth Rs. 1,000 which had to be ordered under the contract in any case, and, would also apply to additional goods which may be ordered by any of the named purchasers. There is no doubt that the document, therefore, became a contract for supply of certain goods, i. e. , of a value of Rs. 1,000 and additional goods to be ordered separately under supply orders. Therefore, it is undoubtedly true that in the present case the rate contract was a contract but even if it was not, the question of jurisdiction has to bedecided with reference to the fact that the document ExhibitD-9 being the acceptance of tender was issued from Delhi and, therefore, the Court at Delhi alone has jurisdiction and no other Court has jurisdiction. It is nowhere provided that the acceptance of tender must conclude the contract and no further supply order can be placed. Rather, there had to be a rate contract contemplating further supply orders under that contract. ( 15 ) IN the document in question. Exhibit D-9, there are a number of terms and conditions and the opening words of the first term are : "orders against the Rate Contract shall be accepted by you on the basis of your manufacturers net ex-works prices (in Dollar/pound) as shown in their parts price-lists current on 1-11-66. The net F. O. R. Destination selling prices will be arrived at by multiplying the net ex-works prices by the Rupee conversion factors as based on the break up agreed to by you which will be separately communicated to you. . . . . "this shows that supply orders had to be placed under the rate contract, but the contract was otherwise complete except for the quantities to be supplied. The contract also had a minimum quantity of goods, i. e. , Rs. 1,000 which had to be supplied under the contract even if no further supply order was placed. In other words, the contract was for the supply of spare parts worth Rs. 1,000 plus any other goods that might be ordered under the supply orders to be placed under the contract. It could not be described, therefore as a mere offer. ( 16 ) THIS is the first point on the question of jurisdiction. ( 17 ) SECONDLY, if the acceptance of tender is taken to be the supply order as is contended by the respondent, and which argument has been accepted by the learned Single Judge, we will be left with this difficulty that each supply order placed under the rate contract will have to be deemed to be an acceptance of tender. But, the supply order does not contain any terms and conditions, but refers back to the rate contract. If the rate contract is not a contract, then we will have to determine, what is the document Exhibit D-9. Exhibit D-9 is a letter issued by the office of the Director General of Supplies and Disposals containing a number of terms on which the offer has been accepted. If it docs not constitute a contract, it will be not capable of being performed. Exhibit D-9 is a letter issued by the office of the Director General of Supplies and Disposals containing a number of terms on which the offer has been accepted. If it docs not constitute a contract, it will be not capable of being performed. It is contended by learned counsel for the respondent that this is an offer, but this is unacceptable because this is a document written on behalf of the purchasers and not on behalf of the contractor. The purchasers cannot accept their own offer, so if we take the supply order to be the acceptance of tender, we reach the result that there will be more than one acceptance of the tender but there was no tender, this is so, because Exhibit D-8 written by the purchaser was a mere desire to alter the previous rate contract. This is an impossible result and seems to be illogical. ( 18 ) THE inevitable conclusion from the facts of the present case is that the contract consists of three documents. An offer made by the contractor, i. e. , the present appellant to supply Cummins Diesel Engines under a rate contract on certain terms and conditions which was accepted by document Exhibit D-9 on certain other terms and conditions specified therein. This acceptance brought about a contract fixing the rates and prices and the period for which goods could be ordered but did not specify the exact amount that may be later ordered under the same except that it guaranteed that goods worth Rs. 1,000 would be ordered. It was, therefore, a specific contract as regards goods worth Rs. 1,000 and a non-specific contract regarding other goods which could be ordered later by the purchasers. The third document is the supply order, which brings about a specific contract. The three documents together constitute a contract. The question of jurisdiction does not depend on when the contract was completed, but on what the parties have said regarding the Court which will have jurisdiction in the matter, That Court is specified in clause 20 (3) of the terms and conditions in the pamphlet already REFERRED TO to. The Court is the Court from where the acceptance of tender was issued. The Court is the Court from where the acceptance of tender was issued. Whether the acceptance of tender concluded the contract is not the question, because even if no order is placed under the rate contract, there can be disputes regarding the same, particularly as goods worth Rs. 1,000 are guaranteed under the rate contract itself. The jurisdiction is determined by the acceptance of tender. When a specific contract or supply order is placed in consequence of the rate contract, then a dispute regarding that specific contract is to be decided by arbitration and, for the purpose of that arbitration, the jurisdiction of the Court is of that Court which has jurisdiction over the place from where the acceptance of tender is issued. That happens to be Delhi, so the Delhi Courts have jurisdiction. We, therefore, hold that the Delhi High Court does have jurisdiction. ( 19 ) NOW turning to the 4th issue, which is the question as to whether there is a specific contract, it may be observed that the learned Single Judge held that there is a specific contract resulting from the placing of the supply order. This conclusion is challenged by learned counsel for the respondent, on the ground that the supply order is for more than Rs. 5,00,000 and is, therefore, greater than specified under the rate contract. It may be noticed that this contention is contrary to the contention of the respondent under the third issue when it was urged that a specific contract was brought about by the supply order. However, it is to be noted that the point raised on behalf of the State of U. P. , is that the supply order was not competent under the rate contract. This itself is a dispute arising under the rate contract and being a question arising out of the contract has to be decided by the arbitrator and not by the Court. It is well-settled that any dispute relating to the interpretation of the contract or any question arising in connection therewith is a matter which requires recourse to the contract and, therefore, is a question to be decided by the arbitrator [reference Heyman v. Darwins, (1942) 1 All. E. R. 337 (3)]. This being not a matter which this Court has to decide, we only note the contention but do not decide the same. E. R. 337 (3)]. This being not a matter which this Court has to decide, we only note the contention but do not decide the same. ( 20 ) IN connection with the points raised before us, it is now necessary to refer to -a judgment of the Supreme Court whichwas cited before us. This is Union of India v. Maddala Thathaiah, AIR 1966, S. C. 1724 (4 ). In that case, the General Manager of the Madras and Southern Mahratta Railway had invited tenders for the supply of jaggery to the railway grain shops for which a tender was submitted which was in the nature of a tender similar to the one in our case. It was held by the Court that the acceptance of the tender regarding the supply of jaggery, though it was definite in regard to quantity and period, was not a complete legal contract as the date of delivery was not specified. It would be an agreement but not a legal contract. The actual placing of the order, after the tender was accepted, constituted the complete contract. The Court s observations were as follows : " WE are, therefore, of the view that the condition mentioned in the note to Paragraph 2 of the tender or in the letter, dated February 16, 1948, refers to a right in the appellant to. cancel the agreement for such supply of jaggery about which no formal order had been placed by the Deputy General Manager with the respondent and does not apply to such supplies of jaggery about which a formal order had been placed specifying definite amount of jaggery to besupplied and the definite date or definite short period for its actual delivery. Once the order is placed for such supply on such dates, that order amounts to a binding contract making it incumbent on the respondent to supply jaggery in accordance with the terms of the order and also making it incumbent on the Deputy General Manager to accept the jaggery delivered in pursuance of that order. "this judgment is in full accord with what has been observed above. The making of the tender and the acceptance of the same without specifying anything further would make the contract an indefinite contract and not a complete legal contract. Once an order was issued under the accepted tender, then it would become a specific contract. "this judgment is in full accord with what has been observed above. The making of the tender and the acceptance of the same without specifying anything further would make the contract an indefinite contract and not a complete legal contract. Once an order was issued under the accepted tender, then it would become a specific contract. On the facts it may be observed that there was in that case a programme by which the jaggery had to be delivered, i. e. , 3,500 maunds on 1st March, 1948, 3,500 maunds on 22nd March, 1948, etc. On 8th March, 1948, the Deputy General Manager had informed the respondent that the balance quantity of jaggery be treated as cancelled and the contract closed. The contractor had instituted a suit for recovering damages for breach of contract. The trial Court dismissed the suit, the High Court however held that the clause reserving the right to cancel the contract was void and remanded the case for disposal on the merits. Before the Supreme Court, it was urged on behalf of the railway department that the contract was for the supply of an unspecified quantity of jaggery up to amaximum of 14,000 maunds and there was thus no enforceable obligation to purchase the entire quantity. The Supreme Court held that any supply order which had already been placed could not be cancelled and only the un-ordered supplies could be cancelled. The contract was, therefore, an enforceable contract. ( 21 ) AS observed by us, we are not concerned with whether the contract is an enforceable contract at this stage. We are concerned with which Court has jurisdiction. On that the clear indication in the agreement is that the place where the tender is accepted is the proper Court and the only Court. As to whether there is a binding contract as a result of the supply order, or, what are the rights of the parties under the supply order, these questions have to be raised before the arbitrator because it turns on the terms of the contract. ( 22 ) IN the result we accept the present appeal and direct the filing of the arbitration agreement. In accordance with the terms of the arbitration agreement, we direct a reference to arbitration of the disputes which have arisen between the parties, to an arbitrator to be appointed by the Director General of Supplies and Disposals. ( 22 ) IN the result we accept the present appeal and direct the filing of the arbitration agreement. In accordance with the terms of the arbitration agreement, we direct a reference to arbitration of the disputes which have arisen between the parties, to an arbitrator to be appointed by the Director General of Supplies and Disposals. The said appointment should be made within three months from today. A copy of this order maybe communicated to the Director General of Supplies and Disposals to be acted upon. The Director General of Supplies and Disposals will refer the disputes to the arbitrator to be appointed by him. The appellant will get costs throughout.