B. N. Kirpal ( 1 ) IN this petition under section 20 of the Arbitration Act the only question which really arises for consideration is whether there was a concluded contract between the parties or not. ( 2 ) TENDERS were invited by the respondents for the construction of 3 Nos. Washing Lines in New Delhi Yard in connection with second approach to New Delhi Railway Station and Allied Facilities Phase II. The tenders were opened on 21st August, 1980 Thereafter some negotiations were held on 22nd October, 1980 and the tender submitted by the petitioner was accepted by the respondents vide their letter dated 21st November, 1980. ( 3 ) IT appears that the respondents asked the petitioner to sign the formal contract documents but the same were not signed. ( 4 ) CERTAIN disputes arose between the parties and the petitioner made a claim on the respondents. Of course, the respondents did not accept the claim with the result that the petitioner asked for the disputes to be referred to arbitration. ( 5 ) NO arbitrator having been appointed, the petitioner has filed the present petition under section 20 of the Act. It is contended by the petitioner in the petition that in the tender which was submitted it was clearly stated that the petitioner agrees to abide by the terms and conditions of the tender as well as the General Conditions of Contract. It is further submitted that this tender was accepted by the respondents vide letter dated 21st November, 1980. According to the petitioner a concluded contract came into existence and admittedly one of the General Conditions of Contract, namely, Condition No. 64, provided that disputes between the parties are to be referred to arbitration. According to the petitioner the disputes specified in paragraph 10 of the petition are to be referred. ( 6 ) ACCORDING to paragraph 10, the first claim of the petitioner is for Rs. 20,000. 00 on account of earnest money/security deposit ; claim No. 2 is for Rs. 1,14,600. 00on account of damages; claim No. 3 is for Rs. 18,000. 00on account of construction of approach roads etc. ; claim No. 4 as for Rs. 30,000. ( 6 ) ACCORDING to paragraph 10, the first claim of the petitioner is for Rs. 20,000. 00 on account of earnest money/security deposit ; claim No. 2 is for Rs. 1,14,600. 00on account of damages; claim No. 3 is for Rs. 18,000. 00on account of construction of approach roads etc. ; claim No. 4 as for Rs. 30,000. 00 on account of defamation and set back of business ; claim No. 5 is for interest at the rate of 15% per annum and claim No. 6 is for costs of the proceedings which have been computed at Rs. 1000. 00. ( 7 ) IN reply to the petition, the stand of the respondents is that there was no valid arbitration agreement between the parties as no concluded contract came into existence. After the rejoinder was filed, the following issues were framed :- 1. Whether there is an arbitration agreement between the parties to refer the disputes to arbitration ? 2. Relief. Parties filed evidence by way of affidavits in support of their respective case. I will now deal with both the issues together. ( 8 ) A contract can come into existence by exchange of letters. It is not necessary that there must be a single formal document executed and signed by both the parties. When an offer is made and the same is accepted, it would result in the contract being concluded. In the present case, admittedly, tender was submitted by the petitioner. It is not denied that by letter dated 21st November, 1980 the said tender was accepted. The offer of the petitioner having been accepted by the respondents, a contract came into existence. ( 9 ) IT is also admitted that in the tender itself it had been stated by the petitioner that the General and the Special Conditions of Contract would be applicable. The letter dated 21st November, 1980 merely accepted the tender. There was no clarification contained in the said letter. It obviously meant that the offer of the petitioner, including its agreeing to abide by the General Conditions of Contract, was accepted. I find it is not possible to accept the contention of Shri Dhir that because a formal contract was not entered into and, therefore, there was no arbitration agreement between the parties. It obviously meant that the offer of the petitioner, including its agreeing to abide by the General Conditions of Contract, was accepted. I find it is not possible to accept the contention of Shri Dhir that because a formal contract was not entered into and, therefore, there was no arbitration agreement between the parties. As I have already observed, a formal contract is a mere formality and merely because the same was not executed, it would not mean that a final and binding contract had not come into existence. In my opinion, therefore, there was a valid and binding arbitration agreement between the parties. ( 10 ) MR. Dhir then contended that in any case claim Nos. 4, 5 and 6 cannot be referred to arbitration. As regards claim No. 4, I am in agreement with Mr. Dhir that the said claim does not arise out of the contract. According to clause 64 of the General Conditions of Contract it is only those disputes which arise out of the contract which can be referred. A claim on account of defamation is not a claim which can be said to arise out of the contract. If any loss had been suffered by any action or inaction on the part of the respondents, then to the extent of the loss a claim may have been made by way of general or other damages. Such a claim has already been made, namely, Claim No. 2 for Rs. 1,14,600. 00. There can, to my mind, be no other claim in addition thereto. For the aforesaid reasons, claim No. 4 is not referable to arbitration. ( 11 ) AS regards claim Nos. 5 and 6, no formal reference of the said claims is necessary and Mr. Dhir agrees that it will be at the discretion of the arbitrator as to whether he awards interest and costs or not. ( 12 ) WITH the aforesaid observations, the petition is allowed. Disputes, namely, claim Nos. 1 to 3, set out in paragraph 10 of the petition, are directed to be referred to arbitration. It is further clarified that the arbitrator will be at liberty to award interest and costs, if he is so inclined. ( 12 ) WITH the aforesaid observations, the petition is allowed. Disputes, namely, claim Nos. 1 to 3, set out in paragraph 10 of the petition, are directed to be referred to arbitration. It is further clarified that the arbitrator will be at liberty to award interest and costs, if he is so inclined. ( 13 ) THE respondents are directed to file the arbitration agreement and the General Manager, Northern Railways is further directed to refer the disputes to arbitration in accordance with Condition No. 64 of the General Conditions of Contract. Such reference should be made within a period of three months from today. Parties to bear their own costs.