Ms. Usha Mehra, J. ( 1 ) UTTAR Pradesh Rajkiya Nirman Nigam Ltd. (hereinafter called the petitioner) has alleged that since there does not existany legal, valid and binding Arbitration Agreement between, the parties hencethe reference of disputes made by Indure (P) Ltd. (hereinafter called respondent No. 1) to the arbitrator (respondent No. 2 herein) and calling upon thepetitioner to enlarge the time for making and publishing the award by thearbitrator, (respondent No. 2) illegal, void and bad in law. In nut shell thecase is that the petitioner decided to take up contract with U. P State Electricity Board for erection of mechanical equipment and construction work including consultancy services. Petitioner purchased the tender on 6. 2. 1984. On23. 5. 1984, respondent No. 1 had written to the petitioner offering to join thepetitioner in this work. Respondent No. 1 wanted it to be a joint venture withthe petitioner. Therefore, respondent No. 1 approached the petitioner. Partiesnegotiated and ultimately terms were settled which formed part of draftagreement. Draft agreement for approval and signature was sent to therespondent No. 1on 22. 6. 1984. The respondent instead of signing the draftagreement, made modifications in the said draft agreement. The modificationssuggested by respondent No. 1 completely changed the terms of the agreement. Modification suggested amounted to new offer hence a valid and subsistingagreement never came into existence. The petitioner never signed the saidagreement. As the parties did not enter into an agreement for joint venture,hence the petitioner withdrew its offer with U. P. State Electricity board. Respondent No. 1 had given an undertaking that in the event of the orderbeing placed on them, by the U. r. State Electricity Board, they will do theentire work. After the withdrawl of the tender by petitioner, respondent No. 1offered to U. P. State Electricity Board to complete all the formalities requiredby the said Board and to carry out the work. This act of the respondent No. 1establishes that no agreement had been arrived at between the petitioner andrespondent No. 1. The respondent also admitted vide its notice dated 5. 3. 1985that there was no arbitration agreement, containing arbitration Clause, existedbetween the parties. Respondent No. 1 appointed respondent No. 2 as itsarbitrator. Petitioner on the other hand asserted that there did not exist anarbitration agreement, however, in order to solve the controversy respondentagreed to nominate respondent No. 3 as its arbitrator but for a limited purpose. 3. 1985that there was no arbitration agreement, containing arbitration Clause, existedbetween the parties. Respondent No. 1 appointed respondent No. 2 as itsarbitrator. Petitioner on the other hand asserted that there did not exist anarbitration agreement, however, in order to solve the controversy respondentagreed to nominate respondent No. 3 as its arbitrator but for a limited purpose. The purpose of appointment of respondent No. 3 was to find out whether thereexisted any arbitration agreement between the parties. Since the questionabout the existing of arbitration clause or agreement can not be decided by anarbitrator, who is a creature of the agreement, hence this petition undersection 33 of the Arbitration Act. ( 2 ) THIS petition has been contested by the respondent No. 1 on theground that draft agreement was discussed by the respondent with the representation of the petitioner. After discussion certain terms and clauses of theagreement were modified with mutual consent of the parties which fact findmention in the forwarding letter sent alongwith the duly signed agreement. Moreover from the conduct of the parties and the correspondence exchangedit is apparent that a subsisting and valid agreement came into existence betweenthe petitioner and respondent No. 1. The said agreement contained Arbitration Clause No. 14 which is resproduced as under :clause No. 14 ( 3 ) "if any question dispute or difference whatsoever shall arise betweenuprnn and the INDURE upon, or in relation to or in connection with theagreement, either party may forthwith give to the other notice in writing of theexsistence of such question, dispute or difference and the same shall be REFERRED TOto the adjudication of two arbitrators, one to be nominated by UPRNN andthe. other to be nominated by the INDURE, or in the case of the said arbitrators not agreeing then to the adjudication of an Umpire to be appointed by thearbitrators in writing, before proceeding with the reference and the awardof the arbitrators or of the Umpire appointed by them, in the event of theirnot agreeing shall be final and binding on both the parties and the provisionsof the Indian Arbitration Act, 1940 and of the rules made thereunder withany statutory modification thereof shall be deemed to apply to, and be incorporated in this agreement. "- ( 4 ) PURSUANCE to this clause Arbitrators were appointed and theyentered upon the reference. Hence now the petitioner cannot be permittedto dispute the arbitration clause. "- ( 4 ) PURSUANCE to this clause Arbitrators were appointed and theyentered upon the reference. Hence now the petitioner cannot be permittedto dispute the arbitration clause. ( 5 ) ON the pleadings of the parties following issues were made :to dispute the arbitration clause. 1. Whether there exists a valid arbitration agreement between theparties. 2. Relief. The parties were permitted to lead their evidence by way of affidavits. Ms. Divya Kapoor appearing for the petitioner contended that modifications and alterations made by the respondent to the draft agreementamounted to counter offer which unless accepted by the petitioner cannotconstitute subsisting and valid agreement. Parties must agree to all the termsin order to prove that a valid contract came into existence. No party hasa right to unilaterally change the terms of the agreement suggested by theother party. Both the parties must sign such an agreement and if it is notdone, there is no valid and subsisting agreement. The Consensus at Idem tothe agreement between the parties is the essence of the agreement which ismissing in this case. The reference made by the petitioner to respondent No. 3as to whether there exist an arbitration agreement was bad in law. It is a settled principle of law that it is the Courts alone and not the arbitrator who candecide about the existence of an arbitration agreement. Without agreement,if the matter is to be REFERRED TO to arbitrator, then there has to be a separatearbitration agreement. In this case there is no separate agreement betweenthe parties to refer the dispute regarding the existence of an arbitration clause. The arbitrator cannot be vested with the jurisdiction by consent of the partiesparticularly when there existed none. Respondent No. 3 was nominated undera non existing agreement and under a mistaken belief and therefore, referenceto arbitrator was bad and cannot be acted upon. Ms. Kapoor, in order toprove that parties were never at one regarding arbitration agreement drew myattention to the notice sent by respondent No. 1. In that notice respondentno. 1 also admitted that there did not exist any arbitration agreement. Thelegal notice issued by the respondent is Ex. P. I dated 5. 3. 1985. In thisnotice at the bottom a note has been given by the respondent which isreproduced as under: "note : Since the pre-tender tie up agreement was initiated byyou malafide the arbitration clause thereof is not applicable. " ( 6 ) MS. Thelegal notice issued by the respondent is Ex. P. I dated 5. 3. 1985. In thisnotice at the bottom a note has been given by the respondent which isreproduced as under: "note : Since the pre-tender tie up agreement was initiated byyou malafide the arbitration clause thereof is not applicable. " ( 6 ) MS. Kapoor, contended that since parties were only at the negotiating stage and had not reached any consensus, therefore, there was no question of any subsisting agreement having came into existence. From the perusalof the above note it is clear that respondent was also aware of this fact. Thisnote was inserted by the respondent because he was aware that the counteroffer made by him vide letter dated 27. 6. 84 was not accepted by the petitioner. The respondent delated Clause 10 which was with regard to furnishing of thebank guarantee for their earnest money. Respondent also deleted certainmaterial items of clauses 9 and 10. The amendments made in the draftagreement were very material. Those touched the material terms of theagreement and goes to the root of the agreement, hence in the absence ofthese counter offer being accepted by the petitioner no concluded contractcame into existence. ( 7 ) SINCE the agreement never came into existence nor there wasany Consensus ad Idem hence the provision of Clause 14 of the allegedagreement could not be invoked. She further contended that even though thepetitioner in the initial stages agreed to refer, to a limited extent, the disputeabout the existence of the arbitration agreement to the arbitrator, butthat doesnot mean that the petitioner ever admitted the existenceof the arbitration agreement. The fact is that the petitioner neveradmitted the arbitration agreement, and therefore, never made any referenceof disputes to the arbitrator. Only reference was to find out about theexistence of Arbitration Agreement. However, subsequently it dawn uponthe petitioner that the question of the existence of arbitration agreementcannot be adjudicated by the arbitrator as has been held by the House oflords in the case of Heyman and Another v. Darwins Limited reported in 1942appeal Cases page 356, where it was held that, "if a party denies that the contract had ever bound them at all, such an attitude would disentitle them fromrelying on the arbitration clause which it contains" Moreover the respondentshave already repudiated the Arbitration Agreement vide their notice nowcannot rely on the same arbitration agreement and Clause No. 14. In thecase of Heyman and Another (supra) it was held that "it is not a sound law topermit a person to repudiate a contract and thereupon "specifically to foundupon a term in that contract which he has thus repudiated". It was alsoobserved that it cannot be understood how the person "setting up that repudiation can be entitled to insist on a subordinate term of the contract still beingenforced". If the dispute is whether the contract which contains the arbitration clause has ever been entered into at all, that issue cannot go to arbitrationunder the Clause, for the party who denies that he has ever entered into thecontract is thereby denying that lie has ever joined in the submission. If oneparty to the alleged contract is contending that it is void ab initio the arbitration clause cannot operate, for on this view the clause itself is also void. Inthe present case, Ms. Kapoor contended that since the agreement never cameinto existence so applying the observation of the House of Lords in this case theprovision of Clause 14 of the Agreement cannot be invoked. It is only whenparties are at one in asserting that they entered into a binding contract, buta difference has arisen between them whether there has been a breach by oneside or the other, such differences should be recorded as differences which havearisen "in respect of" or "with regard to" or "under the contract", and anarbitration clause which uses these, or similar expression should be construedaccordingly. But that is not the case in hand. and therefore, the mattercannot be REFERRED TO to arbitration. It is clear that as the arbitration clause isthe matter of agreement, the first tiling is to ascertain according to the ordinaryprinciple of construction what the parties have actually agreed. According toms. Kapoor from the documentary evidence placed on record it can be saidthat the parties never agreed and they were at no point of time one on anyissue. She, therefore, contended that this Court has jurisdiction to determinewhether there existed an arbitration agreement or not. The reference madeby the petitioner to the arbitrator was under a mistaken belief of law. ( 8 ) IN order to prove that there was no subsisting contract she pointedout few glaring facts for example : 1. That the draft agreement was amended by the respondent without the permission of the petitioner. 2. The reference madeby the petitioner to the arbitrator was under a mistaken belief of law. ( 8 ) IN order to prove that there was no subsisting contract she pointedout few glaring facts for example : 1. That the draft agreement was amended by the respondent without the permission of the petitioner. 2. These material alterations or the counter proposals had animportant bearing on the contract. 3. When the negotiation failed and the petitio ner withdrew thetender of U. P. Electricity Board, the respondent went aheadand took up the work alone. This shows that there was noagreement arrived at between the parties. 4. On 5/03/1985, a legal notice was sent by the respondentadmitting that there was no concluded contract came intoexistence. The said notice is Ex. P. I, dated 5/03/1985. 5. There is no separate agreement between the parties to referthe dispute regarding the existence of arbitration clause. ( 9 ) THE disputes REFERRED TO by the petitioner to the arbitrator/respondentno. 3 are outside the scope of arbitration. Even if for the sake of argument itis presumed that the dispute was REFERRED TO still that will not apply as estoppel. In view of the above points raised and the fact that there does not existarbitration Clause, the arbitrators cannot cloth themselves with the powerwhich never existed nor the time can be enlarged. In this regard, she hasplaced reliance to the decision of Supreme Court in the case of Raymon andco. (India) Private Ltd. v. Khardah Co. Ltd. reported in AIR 1960 Calcuttapage 86 where it was held that where the contract was banned by the Act, thearbitration agreement contained in it as well, will be void and the arbitratorswill have no jurisdiction to adjudicate on the dispute fur less to decide theirown jurisdiction by deciding whether or not the contract was a valid contract. There can be no question in such a case of the parties who. have submitted toarbitration being bound by estoppel. Ms. Kapoor, therefore, contended thateven though the petitioner under mistaken belief REFERRED TO the matter to arbitration and submitted to his jurisdiction still petitioner will not be debarred fromchallenging the jurisdiction of the Arbitrator before this Court. The decision ofthe Calcutta (reported supra) was upheld by the Supreme Court in the case ofkhardah Comp. Ltd. v. Raymon and Co. Ms. Kapoor, therefore, contended thateven though the petitioner under mistaken belief REFERRED TO the matter to arbitration and submitted to his jurisdiction still petitioner will not be debarred fromchallenging the jurisdiction of the Arbitrator before this Court. The decision ofthe Calcutta (reported supra) was upheld by the Supreme Court in the case ofkhardah Comp. Ltd. v. Raymon and Co. (India) (P) Ltd. , reported in AIR 1962supreme Court Page 1810 where the Supreme Court observed that a disputethat the contract of which the arbitration clause forms an integral part is illegaland void is not one which the arbitration are competent to decide under thearbitration clause although it is of sufficient amplitude to take in a disputeas to the validity of the agreement and in consequence a party to the contractis entitled to maintain an application under Section 33 for a declaration thatthe contract is illegal and that in consequence the proceedings taken thereunder before the arbitrators and the award were all void. Since there is noseparate agreement between the parties to refer the dispute regarding theexistence of arbitration clause. therefore, also the arbitrator cannot cloth withpower nor this jurisdiction can be vested in arbitrator by consent of partiesparticularly when there existed no arbitration agreement. The arbitrators inthis case were nominated upon a non existing agreement. ( 10 ) ON the other hand, Mr. G. K. Sharma, appearing for the respondent contended that a contract containing an arbitration clause No. 14 cameinto existence when the petitioner sent the draft agreement and the respondentsigned the same on a stamp paper and sent it to the petitioner vide letterdated 27/06/1984. The said agreement is Ex. P. 4 and the letter by whichit was sent is Ex. P. 3. In Ex. P. 3, it was made clear that the repondentdiscussed the matter with the Engineers of the petitioner for formalising thearrangement for joint participation. The change of condition in agreementas pointed out in Ex. P. 3 was made after discussing the same with Shrisurinder Mohan Aggarwal of the petitioner and after the petitioner agreed tosuch a modification. Respondent submitted the agreement to the petitionerwith further stipulation that the agreement and the proposal- given by therespondent would suffice the requirement of joint participation. It was alsopointed out in Ex. P. 3 that if at a later stage, it was decided to appoint therespondent as assignee, they would furnish the earnest money as also thesecurity deposit. Respondent submitted the agreement to the petitionerwith further stipulation that the agreement and the proposal- given by therespondent would suffice the requirement of joint participation. It was alsopointed out in Ex. P. 3 that if at a later stage, it was decided to appoint therespondent as assignee, they would furnish the earnest money as also thesecurity deposit. The agreement duly signed by the respondent was sent tothe petitioner along with Ex. P. 3. It is not disputed that this agreementcontained the arbitration clause No. 14 as rep-oduced above. Therefore,mr. Sharma contended that the agreement would be deemed to have comeinto force on 27/06/1984 and all obligations and responsibilities oftheparties to this agreement shall be deemed to have commenced from the saiddate. This letter, Mr. Sharma contended formed an integral part of agreement Ex. P. 4. This letter was addressed to the petitioner, who never refutedthe averments made therein, rather petitioner acted on the agreement at asubsequent date. Since this agreement and the letter, which is an integralpart of the agreement, i. e. Ex. P. 3, having not been revoked, the acceptanceof the proposal is deemed to be there. ( 11 ) IN view of these divergent views expressed by the parties, it isnecessary to decide the controversy by determining the question, whether therewas any arbitration agreement ? From the facts enumerated above, it is clearthat there is no arbitration agreement which is signed by both the parties. Sinceagreement is not signed by both the parties, will it amount to no Arbitrationagreement ? The law is well settled that it is not necessary that the arbitrationagreement should be signed. All that is necessary is that there should be anagreement for arbitration reduced to writing. This will be clear from a reference to Section 2 (a) of the Arbitration Act. It is necessary to have a writtenagreement to submit present or future differences to arbitration. Section 2 (a)does not enjoin that the arbitration agreement should be signed by both theparties. Per Supreme Court decision in the case of Banarsi Dass v. Canecommissioner, reported in AIR 1963, Supreme Court page 1417. Therefore,it is necessary to find out whether the agreement containing Arbitration Clausewas reduced into writing. The facts which have come on record are thatthere were discussions and negotiations between the parties. After the negotiations, a settlement was arrived at which was translated into a draft agreement. Therefore,it is necessary to find out whether the agreement containing Arbitration Clausewas reduced into writing. The facts which have come on record are thatthere were discussions and negotiations between the parties. After the negotiations, a settlement was arrived at which was translated into a draft agreement. The said draft agreement was sent to the respondent for signatures. Therespondent discussed the draft agreement with the official of the petitioner whoin turn agreed to the suggestions/modifications suggested by the respondentas mentioned in Ex. P. 3, dated 27/06/1984. Pursuance to the consentof the petitioner to those changes, these were incorporated in Ex. P. 3. Theagreement Ex. P. 4 was thereupon typed on a stamp paper and signed by therespondent was sent to the petitioner for their signatures. Ex. P. 3 was to forman integral part of the agreement. The agreement Ex. P. 4 contained an arbitration clause (Clause 14 ). This was in persuance to the agreement which wasagreed upon between the parties. The arbitration clause was, therefore, transformed into writing. That is not disputed. The perusal of Ex. P. 3 dated 2 7/06/1984, will show that the terms modified by the respondents were agreedupon by the petitioner. It was petitioner s case that the draft agreement whichwas sent for signatures to the respd. had been modified and those modifications touched the basic issue hence it amounted to fresh offer by respd. whichwere not acceptable to the petitioner. Since these modifications were not accepted by petitioner there was no point of signing the agreement. This assertion ofthe petitioner is belied from the correspondence exchanged between the parties. Fact remains that in response to the letter dated 27/06/1984, Ex. P. 3,the petitioner, however did not state in any of his letter that the terms mentioned in Ex. P. 4were not acceptable or that modifications made by the respondent were not in consultation with their representative or that the agreementstood revoked. Under Section 5 of the Contract Act, sofaras the acceptanceof any proposal is concerned, it is complete unless the revocation of theproposal is received before the acceptance. That admittedly has not beendone in this case. What has been asserted is that this modification were notagreed to by the petitioner but there is no such letter indicating that thepetitioner never agreed to those modifications. That admittedly has not beendone in this case. What has been asserted is that this modification were notagreed to by the petitioner but there is no such letter indicating that thepetitioner never agreed to those modifications. Therefore, to my mind, evenif one accepts the position that there was no formal signing of the agreement,it cannot be accepted that there was no agreement before the acceptance ofthe letter Ex. P. 3 dated 27/06/1984. This is a letter by which the agreement duly signed by the respondent was sent to the petitioner. Thereafter, videletter dated 23/07/1984, Ex. R. 2, the petitioner wrote to the respondentintimating that the copy of the joint bid was readily available but the photocopy would be sent to the respondent. It was also mentioned that it wouldbe better if the petitioner and respondent jointly sit together and review theirconditions and rates so that they would be well prepared before they meet theu. P. State Electricity Board. The respondents were also advised to meet thesuperintendent Engineer at Lucknow for discussing the matter The respondentswere asked to furnish the bank guarantiee for this work. This letter was writtenby the petitioner after the agreement had been received by them. This bankguarantee was called for according to the respondent, per the agreementtherefore this proves that the agreement had come into existence pursuanceto which this bank guarantee was demanded. This was followed by a letterdated 17/10/1984 Ex. R. 3 where the petitioner admitted that thetender was submitted on 30/06/1984 in the joint participation of thepetitioner and the respondent. Mr. Sharma therefore, contended that if theagreement hod not come into existence could the petitioner submit the tenderfor the joint participation of the parties. In this letter, it was also mentionedthat the offer of the petitioner was based on the specific agreed condition thatthe respondent will submit t e bank guarantee to the petitioner forrs. 2,00,000. 00 ill lieu of bank guarantee for earnest money already submittedby the petitioner. This bank guarantee was to be furnished by the respondentin favour of the petitioner and valid for one year. Pursuance to this letterex. R. 3 the respondent furnished the bank guarantee on 29/10/1984for Rs. 2,00,000. 00 in lieu of earnest money and also expressed the hope thatthe petitioner would be keeping a close watch of their joint interest for thetender. This was so-intimated vide letter dated 30/10/1984. Videletter dated 15/01/1985, Ex. Pursuance to this letterex. R. 3 the respondent furnished the bank guarantee on 29/10/1984for Rs. 2,00,000. 00 in lieu of earnest money and also expressed the hope thatthe petitioner would be keeping a close watch of their joint interest for thetender. This was so-intimated vide letter dated 30/10/1984. Videletter dated 15/01/1985, Ex. R. 4, the petitioner assured the U. P. State Electricity Board, their cooperation and also extended the validityof their offer upto 28/02/1985. On the same technicaland commercial renditions as were submitted with their offer of 30thjune, 1984 Vide letter dated 22/01/1985, Ex. R. 5, the petitioner asked the respondent s representatives to join them for submittingclarification to the U. P. State Electricity Board at Calcutta. Vide letterdated 23/02/1985, Ex. R. 7, the petitioner admitted that the tenderwas submitted for the work in association with the respondent, on theconsideration that they have adequate experience and expertise regarding designing, manufacturing and erection of ash handling plants. But dueto certainadministrative reasons, they withdrew the offer unilaterally. It isin this background that Mr. Sharma contended that at no stage, the petitionerdenied the existence of an agreement. In fact the agreement Ex. P. 4 sentby the petitioner and duly typed and signed by the respondent vide Clause 10clearly stipulate that Ex. P. 4. was executed only for the purpose of submissionof the tender jointly and in case of award of work a detailed agreementwas to be entered into between the parties for the working arrangementsand cooperation between the two for the execution of work. In the absenceof any such agreement what authorised the petitioner to submit the tenderon their behalf and on behalf of the respondent. There is no explanation forthe same. . In the absence of such an agreement, the petitioner had no authority to submit a joint tender. Therefore, it cannot be said that there neverexisted any agreement containing Arbitration Clause. In fact it is only afterparties entered the agreement Ex. P. 4 and acting upon that the petitioner submitted the tender to the U. P. Electricity Board on 30/06/1984 in the jointparticipation of the parties. It was in pursuance to this agreement that thepetitioner demanded the bank guarantee which was furnished by the respondent on 29/10/1984. It was in pursuance to this agreement that thepetitioner had been asking the respondents to sent its representative for discussion with the officer of the U. P. State Electricity Board. It was in pursuance to this agreement that thepetitioner demanded the bank guarantee which was furnished by the respondent on 29/10/1984. It was in pursuance to this agreement that thepetitioner had been asking the respondents to sent its representative for discussion with the officer of the U. P. State Electricity Board. Had there been noagreement, the petitioner would not have asked the respondent s representativeto join in the discussion for the acceptance of the tender. ( 12 ) FROM the correspondence exchanged between the parties and theconduct of the parties, it is clear that the petitioner had accepted the agreement and in such an eventuality, the petitioner cannot deny the existence ofarbitration clause. Mr. Sharma in this regard has placed reliance on thedecision of the Orissa High Court in the case of State of Orissa and Another v. M/s B. K. Parida and Bros. and Another, reported in AIR 1982 Orissa page 147,the Supreme Court in the case of Smt. Rukmanibai Gupta v. The Collector,jabalpur and Others, reported in AIR 1981 Supreme Court page 479 whereinit is held that the arbitration agreement is not required to be in any particularform. What is required to be ascertained is whether the parties had agteedthat if disputes arise between them in respect of the subject matter of contractsuch dispute shall be REFERRED TO to arbitration. Relying on this judgment, Mr. Sharma contended that the agreement duly signed by the respondent alongwiththe forwarding letter Ex. P. 3, was sent to the petitioner which proposal wasnever denied or refuted by the petitioner. Therefore, the intention of theparties to the arbitration clause containing in the said agreement can be inferredfrom the correspondence exchanged and pointed out above. The arbitrationagreement must be in writing but need not be signed by the parties. It hasbeen held by our own High Court in the case of K. N. Khosla and company v. 0m Parkash Gupta in First Appeal From Order No. 128-D/1966 decided on 4/04/1975 by Justice H. L. Anand. It is held that an arbitrationagreeement in the form of a document signed by one party and accepted bythe other either orally or by conduct amounts to a valid agreement. In thiscase as I have already observed above from the correspondence exchangedbetween the parties and REFERRED TO to above the existence of such an agreementby the petitioner can be inferred from its conduct. In thiscase as I have already observed above from the correspondence exchangedbetween the parties and REFERRED TO to above the existence of such an agreementby the petitioner can be inferred from its conduct. It is in pursuance to theagreement that the petitioner demanded from the respondent the bankguarantee to the tune of Rs. 2,00,000. 00. It is in pursuance to the agreementthat the petitioner had asked the representative of the respondents to join themfor discussion with the U. P. Electricity Board for finalising the tender. Therefore from the conduct of the petitioner the inference can be drawn that theagreement had come into force the moment it was signed by the respondentand sent the same to the petitioner and the petitioner though did not sign itbut acted upon it which amounts to indirect acceptance. ( 13 ) THE contention of the petitioner that the respondent in its noticeof 5/03/1985 had refuted the existence of the arbitration agreement,to my mind, has no force. This argument may- appear to be convincing onthe face of it but when one lifts the veil it is found that this argument is without substance. The defendant after writing letter dated 5/03/1985 madeit clear to the petitioner that the said assertion was not correct, that in factthere existed an arbitration agreement and that the disputes should be REFERRED TOto arbitration. This is so stated in respondent s letter Ex. P. 2 dated 2 1/01/1986. In Ex. P. 2 it was also made clear that the respondents wereready and willing to abide by the arbitration clause and called upon the petitioner to appoint an arbitrator. Vide this Ex. P. 2, the respondent appointedshri Prithvi Raj, Senior Advocate and Retired Judge of the Delhi High Court,as their arbitrator and called upon the petitioner to appoint their arbitratorwithin one month. Therefore, it cannot be said that the respondent denied theexistence of the arbitration agreement. The ratio of Heyman s case (supra)cited by the petitioner is not applicable to the facts of this case. As alreadyobserved above, respondent did not deny the arbitration clause. Whatever wasstated vide Ex. P. I was clarified by their letter Ex. P. 2. Therefore, it cannotbe said that respondent after having denied the existence of arbitration agreement are asking the appointment of an arbitrator. There cannot be any quarrelwith the proposition of law laid by Calcutta High Court in the case ofraymonds and Co. Whatever wasstated vide Ex. P. I was clarified by their letter Ex. P. 2. Therefore, it cannotbe said that respondent after having denied the existence of arbitration agreement are asking the appointment of an arbitrator. There cannot be any quarrelwith the proposition of law laid by Calcutta High Court in the case ofraymonds and Co. (Supra) but that again is not applicable to the facts of thiscase. In Calcutta contract was banned by the Act hence arbitration clausetherein was void. But in the instant case neither the agreement is banned byany Act nor arbitration clause can be called void. Nor the contract is illegalin this case as was the case before Supreme Court in Khardah Company Ltd. (supra ). Terms of Ex. P. 4 would show that these were agreed to, for the purpose of submitting the tender for joint participation and after award of workfresh, agreement was to be executed. It is the case of the respondent thatpetitioner unilaterally withdrew the tender and thus caused damage and lossesto respondent, whereas it is petitioner s case that breach was committed by therespondent. This, to my mind, amounts to a dispute which is covered underclause 14 of the agreement and is to be adjudicated before an arbitrator. Thiscourt cannot decide this issue. Nor an inference can be drawn that there didnot exist any agreement because respondent, after the withdrawl of offer bythe petitioner, submitted its own tender. In view of the above discussion, Ihold there exist valid agreement containing an Arbitration Clause No. 14. ( 14 ) IN view of my above discussion, I find no merits in the submission of the petitioner that there existed no agreement containing an arbitration clause. The petition of the petitioner having no merit is accordingly dismissed.