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2006 DIGILAW 74 (ORI)

M/s. Satyam Shivam Sundaram v. Blue Star Limited

2006-01-27

L.MOHAPATRA

body2006
JUDGMENT L. MOHAPATRA, J. : This civil revision is directed against the order dated 6.3.1999 passed by the learned Civil Judge (Senior Division), Bhubaneswar in Misc. Case No.599 of 1994 rejecting an application filed by the petitioner under Section 33 of the Indian Arbitration Act, 1940 for a declaration that the said Act is not applicable to the dispute raised between the parties and for setting aside the appointment of the Arbitrator made by the opposite parties. 2. The case of the petitioner is that it is a partnership firm running business in the name and style M/s. Satyam Shivam Sundaram. For the purpose of air conditioning the show-room and the business premises the petitioner had negotiated with the opposite party M/s. Blue Star Limited for installation of four Air Conditioners as per the terms and conditions of the agreement between the parties. Initially on the request of the petitioner, three Air Conditioners were installed in the show room and ar¬rangement for the fourth AIR Conditioner was made. The guaranted required temperature was not maintained by the AIR Conditioners as a result of which the petitioner had to approach the consumer Court. After the petitioner approached the consumer Court, the opposite parties 1 to 4 appointed an Arbitrator to decide the dispute claiming that there was an Arbitration clause in the agreement. Challenging such appointment, the petitioner ap¬proached the civil Court for a declaration that there was no Arbitration Clause in the agreement and appointment of the Arbi¬trator should be set aside. 3. The opposite parties filed objection before the trial Court denying the allegations made in the petition and it was specific case of the opposite parties 1 to 4 that there was an Arbitration Clause in the agreement and they have rightly invoked the said clause by appointing an Arbitrator. The learned Civil Judge on consideration of the records placed before it, was of the view that there was an Arbitration Clause and accordingly rejected the petition. 4. Shri Rajan Mohapatra, the learned counsel appearing for the petitioner drew attention of the Court to Annexure-1, an offer made by the opposite parties 1 to 4 for installation of Air Conditioners. The conditions of the contract form a part of the said offer. According to Shri Mohapatra, the learned counsel for the petitioner Annexure-1 is a proposal/offer and not an agree¬ment. The conditions of the contract form a part of the said offer. According to Shri Mohapatra, the learned counsel for the petitioner Annexure-1 is a proposal/offer and not an agree¬ment. Only when an offer is made and the same is accepted, the contract can be said to be completed. Since Annexure-1 was only an offer and it had not been accepted during its validity period,it cannot be said that the conditions of the offer form a part of the contract between the parties. Referring to several correspondences made between the parties, Shri Mohapatra contend¬ed that Annexure-1 is not an agreement and the letter written by the petitioner, which was accepted by the opposite parties 1 to 4 i.e. letter dated 9th December, 1992 is the contract and it does not contain an Arbitration Clause. 5. The learned counsel appearing for the opposite parties referring to Annexure-1 submitted that the offer dated 23rd October, 1992 was accompanied by the conditions of contract and the Arbitration Clause contained in the contract specifically provides that it shall automatically form part of the contract which would be executed between the parties and, therefore, when the offer was accepted, the Arbitration Clause automatically becomes form part of the contract. 6. Keeping in mind the contentions raised by the learned counsel for the parties, it is necessary to look into the docu¬ments relied upon by the learned counsel appearing for both the parties. The letter dated 23rd October, 1992 written by the opposite parties to the petitioner is an offer/proposal for in¬stallation of the Air Conditioners. This document was accompanied by five Annexures and Annexures-5 is the conditions of contract. The contents of the letter clearly indicate that it was a propos¬al/offer. From the letter dated 10th November, 1992, it appears that the opposite parties had intimated the petitioner that the offer dated 23rd October, 1992 would remain valid up to 15.11.1992. Undisputedly, there was no agreement on or before 15.11.1992. Thereafter, the parties appear to have negotiated with regard to number and price of the Air Conditioners to be in¬stalled and ultimately the petitioner in his letter dated 9th December, 1992 intimated the opposite parties that it has agreed for installation of three Air Conditioners at the revised quoted rate and the said letter was acknowledged by the opposite parties and the Air Conditioners were installed. Now the question that comes up for consideration is as to whether the letter dated 23rd October, 1992 was acted upon or the letter dated 9th December, 1992 written by the petitioner was acted upon. True it is, the petitioner in its letter dated 9th December, 1992 has made a reference to the letter of the opposite parties dated 23rd Octo¬ber, 1992. It appears that the letter dated 23rd October, 1992 had lost its validity by 9th December, 1992 and there was revi¬sion in the price quoted and the revised quotation was accepted by the petitioner in its letter dated 9th December, 1992. In this connection, reference may be made to a decision of the Apex Court in the case of M. Dayanand Reddy v. A.P. Industrial Infrastruc¬ture Corporation Limited and others reported in AIR 1993 Supreme Court 2268. The Apex Court in the said decision held that it was the signed agreement between the parties which was binding on the parties and only such written terms in the original agreement signed by the parties should be taken into consideration and not the terms contained in the copy of the agreement which was for¬warded to the applicant after some time. Therefore, it is neces¬sary that the contract must be signed by both the parties. Here is a case where the terms of contract form part of the offer dated 23rd October, 1992 and the said offer lost its validity with effect from 15.11.1992 and only after that on the basis of the letter dated 9th December, 1992 written by the petitioner, the Air Conditioners were installed. The letter of the petitioner dated 9th December, 1992 does not contain any Arbitration Clause. The conditions of contract, a copy whereof was attached to the offer of the opposite parties dated 23rd October, 1992 had never been signed by the parties. In view of the above, I am of the opinion that the contract which forms part of the offer made by the opposite parties in their letter dated 23rd October, 1992 had never been signed by the parties or acted upon and, therefore, in absence of any Arbitration Clause in the letter dated 9th Decem¬ber, 1992 on the basis of which the Air Conditioners were in¬stalled, the dispute cannot be referred to arbitration. The learned counsel for the opposite parties relying on a decision of the Apex Court in the case of Hindustan Petroleum Corporation Ltd. v. M/s. Pinkcity Midway Petroleums reported in AIR 2003 Supreme Court 2881 submitted that whether the dispute is arbitra¬ble or not can also be decided by the Arbitrator. I am of the view that this case has no application to the facts of the present case since on analysis of all the records/correspond¬ences, I hold that there was no Arbitration Clause and, there¬fore, the question of referring the dispute to the Arbitrator for appointment of an Arbitrator does not arise. 7. I, accordingly allow the Civil Revision, set aside the impugned order and direct that there is no Arbitration Clause to be invoked by either party and no such proceeding taken up by the Arbitrator appointed on behalf of the opposite parties is lawful. Civil Revision allowed.