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2013 DIGILAW 91 (GUJ)

Union of India v. Electro Ferro Alloys Pvt. Ltd.

2013-02-19

J.B.PARDIWALA

body2013
Judgment J.B. PARDIWALA, J. 1. This petition under Article 227 of the Constitution of India is at the instance of unsuccessful defendants in a Civil Suit No. 83 of 2005, filed in the Court of City Civil Judge, Ahmedabad, and is directed against order passed by the Chamber Judge, Court No.13 dated 22nd January, 2007, below Exh.24, preferred by the original defendants, by which the learned Chamber Judge rejected the application Exh.24 filed under Section 8 of the Arbitration and Conciliation Act, 1996. 2. At the outset, I may state that although the present petition has been labelled as one under Article 226 of the Constitution of India and a writ of certiorari has been prayed for to set aside the order dated 22nd January, 2007, rendered by the Chamber Judge, Court No.13, City Civil Court, Ahmedabad, I am of the view that having regard to the nature of the dispute and the contentions raised, the petition is one under Article 227 of the o Constitution of India. It is a settled principle of law that in a petition under. Article 226 of the Constitution of India wherein a writ of certiorari is prayed for, then the Court whose order is sought to be quashed, is a necessary party and if the Court whose order is sought to be quashed by praying a writ of certiorari is not made a party, the petition would not be maintainable as one for the relief of certiorari, but the same may be treated as one under Article 227 of the Constitution of India. 3. Case of the petitioners: 3.1 The petitioner No.2 Metal and Steel Factory, Ishapore, is a steel producing unit functioning under the Ministry of Defence catering to the needs of the Ministry for the purpose of manufacture of items to 38 Ordnance Factories throughout India, apart from supplying the finished products to the Army at the right hour to meet their growing demand. 3.2 For the purpose of production, the said Factory initiated procurement action for 9.00 metric Ton of Ferro Molybdenum by way of floating Tender Inquiry No.T-0285G2P304 dated 3.6.2004. On 25th June, the said Tender was opened on Limited Tender basis. 3.2 For the purpose of production, the said Factory initiated procurement action for 9.00 metric Ton of Ferro Molybdenum by way of floating Tender Inquiry No.T-0285G2P304 dated 3.6.2004. On 25th June, the said Tender was opened on Limited Tender basis. 3.3 Total three firms had responded to the Tender Enquiry floated by the petitioner No.2 and on opening of the tenders, it was found that the offer by the respondent herein was the lowest at the rate of Rs.1125.00 per Kg. excluding Excise duty at the rate of 8%. The total tender cost was Rs.1,09,35,000/-. The respondent firm in its offer dated 22nd June, 2004 mentioned that the offer was valid for acceptance for a period of ten days from the date of opening of the tender and thereafter subject to their reconfirmation. 3.4 In view of the aforesaid facts, a Letter of Intent bearing No.SP/0285/G2/04-P3, dated 5.7.04 was issued to the respondent firm stating therein inter alia that their offer was accepted and supply order for the same would be issued separately after observing all the requisite formalities. A specific condition of arbitration clause attached to the letter of intent provided that "any dispute or difference arising in the interpretation of application of the provisions of a contract, settlement of which is not herein before provided for, shall be referred to the sole arbitration of the Arbitrator or his successor in office". The award of the arbitration shall be final and binding on both the parties. 3.5 The respondent herein filled in his tender document, which, amongst other terms contained arbitration clause, which itself could be said to be an act of submitting to all the terms including the arbitration clause. 3.6 In view of the fact that the offer of the respondent herein was the lowest, a letter of in tent was issued on 5.7.2004. After the letter of intent was issued, the same was accepted and a separate supply order was issued on 14.7.2004 on completion of all requisite o formalities. Under the terms thereof, the total quantity of 9.00 M.T of Ferro Molybdenum was to be delivered in three installments of 3.00 M.T. each. The first one being on or before 31.8.2004, second one being on or before 29.9.2004 and the balance 3.00 M.T on or before 30.10.2004. Under the terms thereof, the total quantity of 9.00 M.T of Ferro Molybdenum was to be delivered in three installments of 3.00 M.T. each. The first one being on or before 31.8.2004, second one being on or before 29.9.2004 and the balance 3.00 M.T on or before 30.10.2004. This was the material term, performance whereof was obligatory and mandatory when all relevant terms were included in the supply order. The arbitration clause contained in para-09 of the acceptance order reads as under:- 09. "In the event of any questions, disputes or differences arising under conditions of contract or in connection with this P.O., the same shall be referred to the Sole Arbitration of Chairman, Ordnance Factory Board or any other officer appointed to be the arbitrator by the Chairman, OFB. It will be no objection that the arbitrator is a Govt. servant, that he had to deal with the matters to which the P.O. Relates or that in the course of his duties as a Govt. servant, he has expressed views on all or any of the matters in dispute or difference. Award or arbitrator so appointed shall be final and binding on the parties to this contract. The provision of Indian Arbitration Act, 1940 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the Arbitration proceeding under this clause". 3.7 According to the petitioner, it is clear that in the event of any dispute arising out of a contract or in connection with the said purchase order, the same was required to be referred to the sole arbitration of Chairman, Ordnance Factory Board or any other officer appointed to be arbitrator by the Chairman, Ordnance Factory Board. In the circumstances, in any event of dispute, there could be no escape from the invocation of arbitration under the said arbitration clause. The fact that the respondent accepted the condition together with the arbitration clause is an admitted fact. 3.8 The first phase of supply was made on 14.9.2004 and the second phase of supply was made on 18.10.04 being 3.00 MT each despite the fact that the scheduled date of delivery was 31st August, 2004 and 29th September, 2004 respectively. Thus, breach was committed by the respondent herein in non-complying with the deadline for supply of material according to the terms and conditions duly agreed. Thus, breach was committed by the respondent herein in non-complying with the deadline for supply of material according to the terms and conditions duly agreed. 3.9 According to the terms of payment, the respondent was entitled to receive the payment within 7 days of the supply. However, the payment for the second phase of delivery of 3.00 MT could not be sent to the respondent on account of the fact that the factory was closed for a week with effect from 19.10.04 to 24.10.04 and further on 27.10.04. The factory was closed on account of Lakshmi Puja and Durga Puja holidays, which are big events/festivals in the State of West Bengal. Thus, on 29.10.04, immediately on the reopening of the Factory, the payment was released and was also accepted. The fact that the respondent herein accepted the payment without any protest was also indicative of the fact that in substance and in effect, there was no objection and the same was acquiesced into. 3.10 However, the respondent herein committed default in supply of the third phase of the material under the contract, at nor at any point of time put up the third phase consignment for inspection. This led to the petitioner No. 2 addressing letters to the respondent. Vide letter dated 09.11.2004, delivery period was also extended up to 08.12.2004 so as to facilitate supply of third phase material. This was done since the respondent did not supply the balance quantity as agreed on or before 30.10.2004. 3.11 It was specifically pointed out to the respondent herein that in the event of failure on the part of the respondent in the supply of third phase of the material which was urgently required in view of the pending defence supply orders, the petitioner No. 2 would be entitled to cancel the supply order and procure the outstanding quantity through other sources at the risk and costs of the respondent. 3.12 Despite the aforesaid letter, the respondent failed to supply the material. At the same time, the respondent vide its letter dated 15.11.2004, denied the supply despite extension of the delivery period being granted on a non-existent ground. As a matter of a fact, the respondent wanted to back out of its obligation in view of the fluctuations in the market of the material in question on account of volatile market conditions. At the same time, the respondent vide its letter dated 15.11.2004, denied the supply despite extension of the delivery period being granted on a non-existent ground. As a matter of a fact, the respondent wanted to back out of its obligation in view of the fluctuations in the market of the material in question on account of volatile market conditions. 3.13 On one hand, supply of the material was necessary since the same was required for defence supplies and on the other hand, the respondent after having agreed, intentionally committed default of its obligations. However, the respondent, with a view to give a last chance, was intimated vide letter dated 17.12.2004, wherein it was inter alia stated that the material was required to be supplied at the risk and costs of the respondent and the loss sustained by the petitioner No. 2 would be recovered from the respondent in accordance with the express terms and conditions contained in the supply order by which the respondent had agreed to bind itself. 3.14 On account of non-supply of the required material as assured and in view of the terms of the contract, the petitioner No.2 suffered serious setback in the production field and therefore, in such circumstances, the petitioners were left with no alternative, but to purchase the material by way of another tender inquiry dated 19.1.2005. 3.15 The respondent herein was also given an opportunity to quote their rate. On the said tender enquiry, the respondent herein, with a view to jeopardize the procurement which was required to be resorted to on account of the default committed, approached the City Civil Court, Ahmedabad by way of filing a Civil Suit No. 83 of 2005, inter alia praying as under:- "[a] The Hon'ble Court be pleased to declare that the decision/action of the defendants to issue tender No.T0930/G2- P1-04 for the quantity of 3000 Kgs against the supply order No.04-LP-039713 dated 14.7.2004, at the risk and costs of the plaintiff is illegal, ultra vires, null and void, in breach of contract and unenforceable. [b] The Hon'ble Court be pleased to grant a permanent injunction restraining the defendants from inviting the tenders at the risk and costs of the plaintiff in respect of 3000 Kgs against the supply order No.04-LP-039713 dated 14.7.2004 and be further pleased to restrain the defendants from opening such tender on 19.1.2005 or at any other date and from taking any other or further action for the balance quantity of 3 MT at the risk and costs of the plaintiff'. 3.17 In view of the summons having been issued and in view of the arbitration clause being incorporated in the contract itself, the petitioners herein thought fit to exercise their right of filing an application Exh.24 under Section 8 of the Arbitration and Conciliation Act. 3.18 The said application was filed on 28.2.2005 accompanied by a certified copy of the arbitration agreement. It is the case of the petitioners that they had immediately filed the application under Section 8[1] at a point of time which could not be considered to be later than the submission of the first statement on the substance of the dispute. In such circumstances, according to the petitioner the Civil Court should have referred the parties for arbitration. 3.19 The said application was also within the period of three months from the date of termination of the contract. It appears from the record that the learned Chamber Judge, Court No. 13, City Civil Court heard the application on 8th January, 2007 and by his order dated 22nd January, 2007, rejected the said application as being devoid of merits. 4. Feeling aggrieved by the impugned order passed by the learned Chamber Judge, Court No. 13, City Civil Court, rejecting the application filed under Section 8 of the Act, being Exh.24, the petitioners have preferred the present petition challenging the same. 5. Stance of the respondent - original plaintiff :- 5.1 The petitioners issued a Tender No.T-0285/G2-P3-04 due on 25th June, 2004, for the supply of 9 MT of Ferro Molybdenum, and pursuant to such invitation, the respondent submitted their quotation dated 22nd June, 2004 with a validity period of 10 days from the date of opening. 5.2 According to the respondent Company, they had clearly put its conditions for the supply of 9 MT of Ferro Molybdenum [hereinafter to be referred to as the 'goods' for short]. 5.2 According to the respondent Company, they had clearly put its conditions for the supply of 9 MT of Ferro Molybdenum [hereinafter to be referred to as the 'goods' for short]. The respondent offered to deliver 3 MT each in the month of August, September and October, 2004 respectively. The respondent had clearly stated in the quotation that advance payment by way of cheque against the proforma invoice had to be made by the petitioners and only upon receipt of the payment, the respondent would dispatch the material. The respondent also stated that no late delivery charges would be payable if there was a delay in sending the inspector. The respondent also stated that if the payment of the first consignment would not be released, then that would delay dispatch of other consignments. The respondent also clearly stated that there would be no financial liability of the respondent in any manner for any reason whatsoever it may be. The respondent made it amply clear that they would supply the goods only on the terms and conditions stated in their quotation dated 22/6/2004. 5.3 The petitioners issued a letter of intent on 5th July 2004 referring to the o quotation letter dated 22nd June, 2004 to the respondent. The petitioners accepted the respondent's quotation dated 22nd June, 2004 and placed the order for the supply of 9 MT of the goods within the validity period of the offer. Upon issuance of such letter of intent, the contract between the respondent and the petitioners was concluded and the terms and conditions quoted by the respondent in the quotation letter came to be accepted by the petitioners. 5.4 Subsequently, however, the petitioners requested the respondent to change the terms of payment and to accept the payment within 7 days after receipt of the material. The respondent accepted this request and accordingly the terms of payment were altered and instead of advance payment, the respondent agreed to accept the payment within 7 days after receipt of the goods by the petitioners. However, all other terms and conditions remained unchanged including no financial liability of the respondent in any manner for any reason whatsoever it may be. The petitioners issued a letter dated 12th July, 2004 recording the change of terms of payment. 5.5 The petitioners eventually issued the letter dated 14th July, 2004 referring to the quotation dated 22nd June, 2004. However, all other terms and conditions remained unchanged including no financial liability of the respondent in any manner for any reason whatsoever it may be. The petitioners issued a letter dated 12th July, 2004 recording the change of terms of payment. 5.5 The petitioners eventually issued the letter dated 14th July, 2004 referring to the quotation dated 22nd June, 2004. However, in the said letter, the petitioners unilaterally inserted certain other conditions which were never conveyed to the respondent before the conclusion of the contract at the time of issuing the letter of intent. It is the say of the respondent that such terms and conditions could not be imposed by the petitioners upon the respondent at such a belated stage after the conclusion of the contract. It is a settled legal position that once the contract is concluded between the parties, no party is permitted to add or alter the terms of the contract unilaterally without the consent of the other party. 5.6 On the basis of the terms and conditions contained in the quotation letter dated 22nd June, 2004, the respondent supplied 3 Tons of goods in the month of August, 2004 and again 3 Tons of goods .in the month of September, 2004. The petitioners did not make payment for the first and second installment in time and thus, the petitioners committed breach of contract and failed and neglected to make o payment for the installments of 6 MT of goods delivered in August and• September, 2004. The petitioners failed to make the payment within 7 days as promised and thereby committed the breach of contract. Therefore, respondent wrote a letter dated 25th October, 2004 demanding the payment of Rs.38,02,305/- and clearly requesting the petitioners to treat the matter as urgent. The respondent was entitled to recover the payment within 7 days after the receipt of the material/goods by the petitioners. The respondent clearly stated that such material had been received on 18th October, 2004 and the payment was not made to the respondent within 7 days. 5.7 Again, on 29th October, 2004, the respondent wrote a reminder for payment. The petitioners sent telegram dated 29th October, 2004. However, such telegram did not furnish details of the cheque stated to have been dispatched nor the xerox copy of the cheque was sent along with the telegram. 5.7 Again, on 29th October, 2004, the respondent wrote a reminder for payment. The petitioners sent telegram dated 29th October, 2004. However, such telegram did not furnish details of the cheque stated to have been dispatched nor the xerox copy of the cheque was sent along with the telegram. Eventually, the petitioners sent the cheque vide letter dated 30th October, 2004, which the respondent received on 2nd November, 2004. The payment was delayed by more than 7 days. In such circumstances, due to such delay in payment and the fundamental breach of the contract committed by the petitioners, the respondent was constrained to write a letter dated 8th November, 2004 clearly stating that the petitioners had violated the contract and as a result of delayed payment, the contract had lapsed and the respondent was not liable to supply the balance 3 MT goods to the petitioners which was to be supplied in October, 2004. 5.8 The petitioners vide their letter dated 9th November, 2004 purported to extend the delivery date of the 3rd installment to 8th December, 2004 and called upon the respondent to deliver 3rd installment failing which the petitioners stated that such balanced quantity would be purchased at the risk and costs of the respondent. 5.9 The respondent wrote a letter dated 15th November, 2004 stating that the respondent was not responsible for the delay and lapse of the petitioners and in the volatile conditions of the market, no extensions were possible and the delivery for the month of October, 2004 clearly lapsed due to the failure of the petitioners to make the payment in time, and further pointed out that timely payment was to be strictly adhered to and was the essence of the contract. 5.10 The petitioners wrote a letter dated 25th November, 2004 stating that if the last installment was not received by 8th December, 2004, the contract would be cancelled and outstanding quantity shall be purchased at the risk and costs of the respondent. Finally, by a letter dated 17th December, 2004, the petitioners purported to short close the s contract at the supplied quantity of 6 MT at the risk and costs of the respondent. The petitioners also wrote another letter dated 17th December, 2004 stating that the risk purchase o tender inquiry was floated on limited tender inquiry basis for a quantity of 3 MT at the risk and costs basis. The petitioners also wrote another letter dated 17th December, 2004 stating that the risk purchase o tender inquiry was floated on limited tender inquiry basis for a quantity of 3 MT at the risk and costs basis. Immediately upon receipt of such letter, the respondent wrote a letter dated 10th January, 2005 requesting the petitioners to drop the tender inquiry No.T0930-02-P1-04, scheduled to be held on 19th January, 2005. However, the respondent did not receive any response thereto. 5.11 According to the respondent, the petitioners were not legally entitled to invite the tender on risk purchase basis for the balance quantity of 3 MT and their decision was illegal, ultravires, null and void and unenforceable. Further, according to the respondent, the petitioners themselves committed the breach of the contract and failed to abide by terms of payment, and due to volatile market conditions, their purported extension of delivery up to 8th December, 2004 was clearly illegal and unauthorized. The petitioners were not entitled to extend the delivery schedule unilaterally and without the consent of the respondent, and in such circumstances, the respondent was constrained to file Civil Suit No.83 of 2005 against the present petitioners. 5.12 Moreover, such tender inquiry did not amount to offer, but merely amounted to an invitation and pursuant to which the respondent submitted their offer on 22nd June, 2004. In the said offer, there was no arbitration clause and there was a specific jurisdiction clause which provided that for all disputes arising out of the contract or negotiations with the respondent shall be constituted in the Court of competent jurisdiction situated at Ahmedabad only and, at no other place or Court. Such clause clearly negated the existence of any arbitration agreement or clause contained in the general conditions of contract. Such offer of the respondent was accepted by the petitioners by issuing a letter of intent on 5th July, 2004. It is the say of the respondent that in the said acceptance letter, the petitioners clearly conveyed that the offer of the respondent had been accepted and the petitioners also stated that in view of extreme urgency of their requirement, the respondent was requested to effect supply of the material immediately considering such letter as a letter of intent. Such letter clearly showed unqualified and unconditional acceptance of the respondent's offer dated 22nd June, 2004 and resulted in a concluded contract between the parties. Such letter clearly showed unqualified and unconditional acceptance of the respondent's offer dated 22nd June, 2004 and resulted in a concluded contract between the parties. There was no arbitration clause or agreement in the contract concluded between the petitioners and the respondent. At a later stage, the petitioners issued a supply order on 14th July, 2004 which contained, interalia, an arbitration clause. According to the respondent, it was not open to the petitioners to add or introduce any new o terms or conditions after the conclusion of the contract between the parties. Once the offer of the respondent dated 22hd June, 2004 was accepted by the petitioners vide their letter of intent dated 5th July, 2004, the contract was concluded between the parties and thereafter, it was not open to the petitioners to add or introduce any new terms or conditions. The respondent o never accepted the order of 14/7/2007 with the arbitration clause. The respondent supplied the material on the basis of the contract concluded by issuing the letter of intent dated 5th July, 2004. Even the validity of respondent's offer expired on 5/7/2004. 6. While deciding the application under Sec. 8, the only relevant issue to be considered is the presence of the Arbitration Clause in the contract between the parties and the question as to which party has committed the breach is not at all relevant. The application made under Sec. 8 by the petitioners was on the basis of the arbitration clause contained in the supply order dated 14th July 2004, and the same was not a part of the contract between the parties. The contract was already concluded by issuance of the letter of intent on 5th July, 2004. Since there was no arbitration agreement and as the offer of the respondent containing the jurisdiction clause, which is comprehensive and covers all kind of disputes was accepted by the petitioners, it was not open to them to unilaterally insert the arbitration clause in the supply order. The respondent was entitled to supply the material on the terms and conditions concluded between the parties and the supply of the material does not in any manner amount to acceptance of the terms and conditions of the supply order dated 14th July, 2004 including the arbitration clause. The respondent was entitled to supply the material on the terms and conditions concluded between the parties and the supply of the material does not in any manner amount to acceptance of the terms and conditions of the supply order dated 14th July, 2004 including the arbitration clause. Such arbitration clause which does not form part of the contract between the parties was liable to be ignored and the respondent was entitled to do so and supply the material on the terms and conditions concluded between the parties. The respondent supplied the material on the basis of their offer dated 22nd June, 2004 and its acceptance vide order dated 5th July, 2004. 7. Submissions on behalf of the petitioners :- Mr. Hriday Buch, the learned Counsel appearing on behalf of the petitioners submitted that Section 8 of the Act specifically provides that when an action is brought before any judicial Authority, which is subject matter of an Arbitration Agreement, it shall not be entertained and the matter shall be referred to the Arbitrator. In the facts of the present case, when there was a specific Arbitration clause in the initial tender inquiry filled up by the respondent and subsequently in the acceptance of tender/supply order dated 14.07.2004, the Learned Civil Court erred in holding that there is no Arbitration Agreement between the parties. He further submitted that the Arbitration Agreement is defined u/S. 7 of the Act. An Arbitration Agreement may be in the form of an Arbitration clause in the contract or in the form of a separate agreement. It may be by way of exchange of letters, telex, telegram etc. which provided a record of the Agreement. A reference in a contract to a document containing Arbitration 5 clause also constitute an Arbitration Agreement. According to Mr. Buch, the issue in question is squarely covered by a decision of the Supreme Court in the case of Hindustan Petroleum Corporation Ltd. v. Messrs Pinkcity Midway Petroleums (2003) SC 2881. According to Mr. Buch, in the cases where there is an arbitration clause in the agreement, it is obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made, except to refer the dispute to an arbitrator. The sum and substance of Mr. The sum and substance of Mr. Buch's submission is that if there is a clause for arbitration, it is mandatory for the Civil Court to refer the dispute to an arbitrator. He further submitted that it is a settled legal position that when the tender is supplied by the supplier and accepted by the principal, pursuant to which supply of material was made and accepted also, Arbitration Agreement cannot be doubted. In such circumstances, appointment of Arbitrator cannot be refused on the ground that no formal agreement was executed between the parties. Reliance was placed on the judgment of the Supreme Court in case of M/s. Unissi (India) Pvt. Ltd. V. Post Graduate Institute of Medical Education and Research, reported in 2008 AIR SCW 6820, (paras 4, 12 and 13). He also submitted that whether there is an Arbitration Agreement or not, is to be decided with reference to the contract documents. When all the purchase orders were signed on behalf of the Petitioners and the same has been countersigned by the respondent and supply was made, and the supply order specifically provided for an Arbitration clause, it constitutes an arbitration Agreement. He placed reliance on the decision of the Supreme Court in case of M/s. Groupe Chimique Tunisien SA V. M/s. Southern Petrochemicals Industries Corporation Ltd., reported in AIR 2006 SC 2422 , (para 5, 6, 7 and 8). He also submitted that an Arbitration Agreement can be inferred by the documents signed by the parties of exchange of letters or any other means of telecommunications which provided a record of the Agreement. Subsequent correspondence between the parties would also be relevant to conclude that there was indeed an Agreement existed between the parties. He placed reliance on the decision of the Supreme Court, in case of M/s. Shakti Bhog Foods Limited V. Kola Shipping Limited, reported in 2008 AIR SCW 6851, (paras 10, 11 and 14). According to Mr. Buch, the question as to whether in the facts and circumstances of the case an order for permanent injunction should be granted or not, is itself a dispute within the meaning of the Arbitration Agreement. He further submitted that an Arbitration Agreement can be invoked by a party to the dispute. Thus, the suit should be stayed and the matter should be referred to the Arbitrator. He further submitted that an Arbitration Agreement can be invoked by a party to the dispute. Thus, the suit should be stayed and the matter should be referred to the Arbitrator. He relied upon the decision of the Supreme Court in case of Milkfood Ltd. V. M/s. GMC Ice Cream (P) Ltd., reported in AIR 2004 SC 3145 , (paras 76 and 77). He submitted that even after the contract comes to an end, the arbitration due to breach of Arbitration clause does not get perished, nor it is rendered inoperative. Once the conditions of Section 8 are satisfied, there is no option left to the Court but to refer the parties to Arbitration. In support of this contention, he placed reliance on the decision of the Supreme Court, in case of Branch Manager, M/s. Magma Leasing and Finance Ltd., and Anr. V. Potluri Madhavilata and Anr., reported in AIR 2010 SC, 488 (Paras 23, 24 and 25) Mr. Buch, thus summed up that the order passed by the Learned City Civil Judge was not only illegal but also contrary to the settled legal position. According to him, once there was an arbitration agreement between the parties, the dispute has to be decided by the Arbitrator and hence the impugned order needs to be quashed and the Application Ex-24 should be allowed and the matter should be referred to the Arbitrator. 8. Submissions on behalf of the respondent:- Mr. Suneet Shah, the learned Counsel appearing for the respondent Company submitted that the Writ Petition under Article 226 of the Constitution of India rejecting reference is not maintainable. He submitted that power exercised under :- Section 11(6) is a judicial power and not an administrative power. According to him, order under Section 11(6) being a judicial order, the same could no longer be open to scrutiny under Article 226 of the Constitution of India. In support of his contention, reliance was placed on the decision of the Supreme Court in SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 wherein, while considering relative scope of Section 11(6) & 8 of the Act, the Hon'ble Supreme Court has held that nature of the objection in Sections 8 and 11(6) is the same. Counsel therefore submitted that order under Section 8 being in exercise of judicial power, a writ under Article 226 would not lie and hence petition is not maintainable. Counsel therefore submitted that order under Section 8 being in exercise of judicial power, a writ under Article 226 would not lie and hence petition is not maintainable. By drawing the attention of the Court to para 19 of the aforesaid judgment of the Supreme Court, he submitted that it has been held that when defendant has to take action before judicial Authority under Section 8, and raises the plea that there is an arbitration agreement and subject matter of claim is covered by the agreement, and the plaintiff or the person who has approached the judicial Authority for relief, disputes the same, the judicial Authority has necessarily to decide whether in fact there is an existence of a valid arbitration agreement and whether dispute that is sought to be raised before it is covered by the arbitration clause. He submitted that there is no existence of arbitration clause regarding dispute, i.e. floating tender at the risk and costs of the plaintiff. The only dispute between the parties, according to him, is about the correctness of the decision of the learned City Civil Judge o in rejecting the application under Section 8 of the Arbitration and Conciliation Act 1996, filed by the petitioners in Civil Suit No.83/2005. The learned Judge has accepted the plea of the respondent that a contract came to be concluded upon the petitioners issuing the letter of intent on 05.07.2004. According to the learned Counsel, such finding is correct and does not call for any interference. Learned Counsel pointed out that quotation dated 22/06/2004 was admittedly an offer. The said offer was conditional. The respondent did not agree with the conditions of purchase at the risk and costs of respondent and also of arbitration. The respondent had made it very clear that all disputes arising out of the contract shall be constituted in the Court of competent jurisdiction at Ahmedabad. The said conditions were accepted by the petitioner. The request was received only for extending the validity period and even while requesting for extending validity period mentioned by the respondent, the petitioner did not stick to its original period of 90 days for validity but restricted the validity period upto 31/07/2004. The respondent extended the validity upto 05/07/2004. The said conditions were accepted by the petitioner. The request was received only for extending the validity period and even while requesting for extending validity period mentioned by the respondent, the petitioner did not stick to its original period of 90 days for validity but restricted the validity period upto 31/07/2004. The respondent extended the validity upto 05/07/2004. There was no objection with regard to any other conditions of offer dated 22/06/2004 and LOI was issued with the words "We accept your offer dated 22/06/2004" and also directed for effecting delivery by the said very communication. Thus, offer of the respondent was accepted and acceptance was communicated vide communication dated 05/07/2004 and therefore the contract got concluded in the eye of law. He submitted that the test to find out whether or not the contract was concluded, the question to be asked is whether the respondent could have refused to deliver the goods without incurring any contractual liability after issuance of LOI dated 05/07/2004. He submitted that the answer would be "no" because vide LOI dated 05/07/2004, respondent's offer dated 22/06/2004 was accepted and also the order for deli very was placed accordingly by the words "in view of extreme urgency of requirement you are requested to effect supply of the material immediately." In the facts of the present case, it was not merely an issuance of LOI but something more. By the very LOI, order was placed for effecting delivery of goods and therefore, respondent was under contractual obligation to deliver the goods and hence communication dated 05/07/2004 is to be construed as a communication concluding the contract. Reliance has been placed on the decision of the Supreme Court in the case of Chatturbhai Vithaldas Jasani v. Moreshwar Parashtram reported at AIR 1954 SC 236 , wherein it has been held that contract, though, concluded upon placing of the order, but the terms and conditions would be governed by those spelt out in correspondence previous to the placing of an order. Therefore, even if order for supply was placed on 14/07/2004, it was to be governed by the terms and conditions spelled out in quotation/offer dated 22/06/2004 and unconditionally accepted by issuance of LOI (Letter of Intent) on 05/07/2004. He also submitted that once agreed, terms and conditions cannot be changed or altered or varied without the consent of both the parties. He also submitted that once agreed, terms and conditions cannot be changed or altered or varied without the consent of both the parties. Between 5th and 14th July, 2004 neither a request was made nor objection was raised for change of any terms and conditions of Quotation dated 22/06/2004 except for terms of payment aforesaid. It was submitted that vide offer dated 22/06/2004, the respondent' excluded the arbitration clause, which was accepted and not disputed by the petitioner and thereafter, there had been no discussion, negotiation or even a whisper for inclusion of arbitration clause. He submitted that once arbitration was excluded and such exclusion was accepted, the parties cannot include the arbitration agreement without any discussion, negotiation or whisper. Therefore, the communication dated 14/07/2004 is to be construed in the context of the aforesaid fact. Reliance was placed on the judgment of the Supreme Court in the matter of Zodiac Electricals Pvt. Ltd. v. Union of India and ors. reported in AIR 1986 SC 1918 , wherein the Supreme Court has taken the view that arbitration agreement could not have been taken as included. That the petitioner could not have unilaterally changed terms and conditions of the order vide supply order dated 14/07/2004 as contract was already concluded and order was placed for effecting supply vide communication dated 05/07/2004. He pointed out that though variation is required to be specifically pleaded and proved, same has not been done in the instant case, and therefore, in the absence of any pleading or proof thereof, even otherwise such a plea cannot be entertained. He submitted that even otherwise, the right to invoke arbitration got extinguished since arbitration was not demanded within 90 days as contemplated by clause 30 of Short Term Agreement - I. The agreement stood terminated by expiry of contract on 30/10/2004. The petitioner unilaterally extended the period of contract by their communication dated 08/11/2004, which is non est because there was no condition either in Short Term Agreement 1 or in communication dated 14/07/2004 empowering the petitioner to extend the period of contract unilaterally or amend the contract as claimed by the petitioner. The respondent vide their communication dated 8/11/2004 and 15/11/2004 did not accept the unilateral extension and pointed out that contract for third installment had lapsed on 30/10/2004. Thus, right to claim arbitration came to be extinguished by lapse of 90 days. The respondent vide their communication dated 8/11/2004 and 15/11/2004 did not accept the unilateral extension and pointed out that contract for third installment had lapsed on 30/10/2004. Thus, right to claim arbitration came to be extinguished by lapse of 90 days. He further submitted that the petitioners are not justified in relying upon clause 9 of the letter dated 14/07/2004, as such clause was not a part of the concluded contract between the, petitioners and the respondents. When the petitioners issued their letter of intent dated 5/07/2004, it clearly amounted to acceptance of the offer made by the respondent vide letter dated 22/06/2004. As a result a concluded contract" came into existence on that date and it was not open to the petitioners to introduce any new terms and conditions unilaterally vide letter dated 14/07/2004 or even otherwise. According to the learned Counsel, the Court below very rightly observed that it was not concerned with the question as to who committed the breach of the contract. Non-supply of three metric tonnes of material by the respondent is on account of various breaches committed by the petitioners. In fact the respondent was no longer bound to supply the balance three metric tonnes for the reason already on record. However, the question whether non-supply of three metric tonnes is a breach or not is not at all relevant for deciding application under Section 8. The allegations of breach by the petitioners and respondent against each other are not relevant in deciding whether the parties should go to arbitration or not and whether the dispute is covered by arbitration agreement, if any. The primary question to be decided was whether there was an arbitration agreement or not. Mr. Suneet Shah, the learned Counsel for the respondent, in such circumstances, prayed for rejection of this petition. 9. Analysis:- 9.1 Having heard the learned Counsel for the respective parties and having gone through the materials on record, the only question that falls for my consideration is whether the trial Court committed any error, much less an error of law, in rejecting the application preferred under Section 8 of the Arbitration and Conciliation Act, 1996, by the petitioner herein - original defendant. Section 8 of the Act reads:- Sec. 8. Section 8 of the Act reads:- Sec. 8. - Power to refer parties to arbitration where there is an arbitration agreement:- (1) A judicial Authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duty certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial Authority, an arbitration may be commenced or continued and an arbitral award made." Section 2(1)(b) defines an arbitration agreement as means an agreement referred to in Section 7. Under section 7(3) an arbitration agreement shall be in writing. Under subsection (4) of Section 7, an arbitration agreement is in writing if it is contained in a document signed by the parties, or an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement or an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. 9.2 It is well settled that Scheme of Arbitration And Conciliation Act, 1996 is absolutely distinct and different from the 1940 Act. As held by the Apex Court in Pandey & Co. Builders (P) Ltd v. State of Bihar (2007) 1 SCC 467 ) and Rashtriya Ispat Nigam Ltd v. Verma Transport Co. (2006) 7 SCC 275 ) the 1996 Act is required to be read keeping in view the UNCITRAL Model Rules. Article 8 of the Model Rules reads:- "(1) A Court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed. (2) Where, in such case, arbitral proceedings 'have already commenced, the Arbitral Tribunal may continue the proceedings while the issue of its jurisdiction is pending with the Court." 9.3 Section 8 of 1996 Act does not contain the expressions found in the second part of the Model Rules. Section 8 of 1996 Act confers power on the judicial Authority before whom an action is brought in a matter which is the subject matter of an arbitration agreement, to refer the dispute to arbitration, if a party applies for the same. If the conditions are fulfilled and the agreement is valid and it contains an arbitration clause, Court shall refer the parties to arbitration as laid down by the Apex Court in P. Anand Gajapathi Raju v. P.V.G. Raju (2000) 4 SCC 539 ) and Hindusthan Petroleum Corporation Ltd v. Pinkcity Midway Petroleums (2003) 6 SCC 503 . 9.4 Section 8 of Arbitration And Conciliation Act, 1996 deals with the power to refer parties to arbitration when there is an arbitration agreement. Under sub section (1), a judicial Authority before which an action is brought in a matter which is the subject of an arbitration agreement and if a party applies not later than before submitting his first statement on the substance of the dispute, judicial Authority shall refer the parties to arbitration. Sub-Section (2) provides that the application so filed shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof Section 16 of the Act deals with the competence of arbitral tribunal to rule on its own jurisdiction. Under sub section (1), the arbitral tribunal is competent to rule on its own jurisdiction including ruling on any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an, arbitration clause, which forms part of a contract shall he treated as an agreement independent of the terms of the contract and a decision by the tribunal that the contract is null and void shall not entail ipso jure invalidity of the arbitration clause. For that purpose, an, arbitration clause, which forms part of a contract shall he treated as an agreement independent of the terms of the contract and a decision by the tribunal that the contract is null and void shall not entail ipso jure invalidity of the arbitration clause. 9.5 Having regard to the language of Section 8 of the Act, it cannot be said that as and when an application is filed o by a party as provided under subsection (1) of Section 8 producing along with the application the original or the duly certified copy of an agreement which contains an arbitration clause, the Court shall refer the parties to arbitration. The Court cannot act mechanically. The Court owes a duty to decide whether there is a valid agreement executed by the parties, which contains an arbitration clause. It is only if it is found that there exist execution of a valid agreement between the parties, and that agreement contains an arbitration clause, and along with the application, the original of the agreement or its duly certified copy was filed, and application is filed before submitting the first statement on the substance of the dispute, the parties can be referred to arbitration as provided under Section 8 of the Act. 10. Before I enter into the facts of the present case, I would like to deal with the principal argument of Mr. Buch that once there is an arbitration clause, the Court will be left with no other option but to refer the parties to the arbitrator mandatorily. This principal argument is based on the judgment of the Supreme Court in the case of Hindustan Petroleum Corporation (supra). 11. Let me understand the ratio decidendi of the decision of the Supreme Court in Hindustan Petroleum Corporation (supra). In the case before the Supreme Court, an application under Section 8, read with Section 5 of the Act was filed with a prayer to refer the dispute pending before the Civil Court to the arbitrator as per Clause 40 of the dealership agreement dated 26th March, 1997. In the case before the Supreme Court, an application under Section 8, read with Section 5 of the Act was filed with a prayer to refer the dispute pending before the Civil Court to the arbitrator as per Clause 40 of the dealership agreement dated 26th March, 1997. In the said application, the appellant of that case had stated that the action taken by it was in consonance with the terms and conditions of the dealership agreement, hence, any dispute arising out of the said action of the appellant could only be referred to the arbitrator as per clause 40 of the said agreement. The learned Civil Judge dismissed the said application holding that the dispute between the parties was not covered by the arbitration agreement. A revision was filed by the appellant in the High Court, against the order of the learned Single Judge, which came to be dismissed by the High Court. The matter accordingly, reached the Supreme Court. The Supreme Court decided to first go into the question of the existence or validity of the arbitration agreement. It considered clause of the agreement, which provided for arbitration. The Supreme Court noticed on perusal of clause 40 that the parties to the dealership agreement had agreed to refer the dispute arising out of the agreement, of whatever nature it could be, to an arbitrator as contemplated in that agreement. The Supreme Court thereafter, posed a question for itself that what would be the role of the Civil Court when an argument is raised that such an arbitration clause did not apply to the facts of the case on hand. It was argued by the Counsel for the appellant that it was a matter which could be raised before the arbitrator who was competent to adjudicate upon the same, and the Civil Court should not embark o upon an inquiry in regard to the applicability of the arbitration clause to the facts of the case. The Supreme Court took notice of an important fact that the existence of an arbitral clause in the agreement was accepted by both the parties, as also by the lower Courts. The Supreme Court took notice of an important fact that the existence of an arbitral clause in the agreement was accepted by both the parties, as also by the lower Courts. In such circumstances, the Supreme Court held that if the agreement accepted by both the parties, then in view of the mandatory language of Section 8 of the Act, the Court below will have no other option but to refer the matter to the Arbitrator. 12. In my opinion, the judgment of the Supreme Court in Hindustan Petroleum Corporation (supra) should not be understood as laying down a proposition of law that in all cases where there is an arbitration clause, the Court will have no other option but to refer the dispute to the arbitrator. The judgment of the Supreme Court nowhere says that the Civil Court shall not have jurisdiction to entertain the Suit only because there is contract for referring the dispute to Arbitrator. It is not a case where the jurisdiction of the Court is totally ousted in the cases where the arbitration clause is there in the contract between the parties to the Suit, but it would depend upon the compliance of the conditions by the persons seeking for referring the matter to the arbitration, and the peculiar nature of the dispute which both the parties before the Court may raise. Thus, in my opinion, the decision of the Supreme Court in Hindustan Petroleum Corporation (supra) would not help the client of Mr. Buch in any manner. It is well established that a judgment is a precedent for what it decides and not what may appear to logical flow from it. The Courts should not place reliance on the decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. 13. Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. 13. Considering the question whether in view of the powers of the Arbitral Tribunal to decide its own jurisdiction including the validity of the arbitration agreement, the Court• has the jurisdiction to decide it, the Constitution Bench of the Supreme Court in SBP & Company v. Messrs Patel Engineering Limited, reported in (2005) 8 SCC 618 held as under:- 19."It is also not possible to accept the argument that there is an exclusive conferment or jurisdiction on the Arbitral Tribunal, to decide on the existence or validity of the arbitration agreement. Section 8 of the Act contemplates a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement, on the terms specified therein, to refer the dispute to arbitration. A judicial Authority as such is not defined in the Act. It would certainly include the Court as defined in Section 2(e) of the Act and would also, in our opinion, include other Courts and may even include a special Tribunal like the Consumer Forum (see Fair Air Engineers (P) Ltd v. N.K. Modi). When the defendant to an action before a judicial Authority raises the plea that there is an arbitration agreement and the subject-matter of the claim is covered by the agreement and the plaintiff or the person who has approached the judicial Authority for relief, disputes the same, the judicial Authority, in the absence of any restriction in the Act, has necessarily to decide whether, in fact, there is in existence a valid arbitration agreement and whether the dispute that is sought to be raised before it, is covered by the arbitration clause. It is difficult to contemplate that the judicial Authority has also to act mechanically or has merely to see the original arbitration agreement produced before it, and o mechanically refer the panes to an arbitration. Similarly, Section 9 enables a Court, obviously, as defined in the Act, when approached by a party before the commencement of an arbitral proceeding, to grant interim relief as contemplated by the section. Similarly, Section 9 enables a Court, obviously, as defined in the Act, when approached by a party before the commencement of an arbitral proceeding, to grant interim relief as contemplated by the section. When a party seeks an interim relief asserting that there was a dispute liable to be arbitrated upon in terms of the Act, and the opposite party disputes the existence of an arbitration agreement as defined in the Act or raises a plea that the dispute involved was not covered by the arbitration clause, or that the Court which was approached had no jurisdiction to pass any order in terms of Section 9 of the Act, that Court has necessarily to decide whether it has jurisdiction, whether there is an arbitration agreement which is valid in law and whether the dispute sought to be raised is covered by that agreement. There is no indication in the Act that the powers of the Court are curtailed on these aspects. On the other hand, Section 9 insists that once approached in that behalf, "the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceeding before it". Surely, when a matter is entrusted to a civil Court in the ordinary hierarchy of Courts without anything more, the procedure of that Court would govern the adjudication.(See R.M.A.R.A. Adaikappa Chettiar v. R. Chandrasekhara Thevar)". 14. The Constitution Bench in SBP & Company (supra) also considered the question as to how the inquiry is to be made, is it for the Court to record evidence on the question whether the agreement produced was executed by the parties, whether it is vitiated by fraud or other vitiating grounds? The Court considered the above aspect and held: "It is necessary to define what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. Obviously, he has to decide his own jurisdiction in the sense whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question o whether the claim was a dead one; or a long-barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under section 11(6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as may be necessary. We think that adoption of this procedure in the context of the Act would best serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the Court at various stages of the proceedings before the Arbitral Tribunal." 15. The Apex Court in India Household and Healthcare Ltd v. LG Household And Healthcare Ltd (2007) 5 SCC 510 ) considering this aspect held:- "14. Thus, as and when a question in regard to the validity or otherwise of the arbitration agreement arises, a judicial Authority would have the jurisdiction under certain circumstances to go into the said question. 15. Fraud, as is well known, vitiates all solemn acts. Thus, as and when a question in regard to the validity or otherwise of the arbitration agreement arises, a judicial Authority would have the jurisdiction under certain circumstances to go into the said question. 15. Fraud, as is well known, vitiates all solemn acts. (See Hamza Haji v. State of Kerala, Prem Singh v. Birbal and Jai Narain Parasrampuria v. Pushpa Devi Saraf)." If that be so, before referring the parties to an arbitration as provided under section 8, Court has to decide whether the agreement was executed, whether it is valid and if disputed on the ground of fraud whether it is vitiated by fraud." 16. What is discernible from the principles as laid down by the Supreme Court in the above referred cases is that the Court has to satisfy itself that there is a valid agreement executed by the parties, which contains an arbitration clause in order to invoke the power conferred under Section 8 to refer the parties to the arbitration. The existence of a valid agreement containing an arbitration clause is sine-qua-non for referring the parties to arbitration under Section 8 of the Act. When existence of a valid arbitration, agreement is disputed by one of the parties, the Court is duty bound to consider whether it was executed by the parties, including the validity of the agreement. The inquiry contemplated under Section 8(1) of the Act is only to find out whether the agreement produced by one of the parties is an agreement executed by the parties. If it is admitted by the parties that it is an agreement, no other evidence is u necessary. The only inquiry thereafter will be to ascertain whether the agreement contains an arbitration clause. If one party produces an agreement and the other party disputes the execution of the agreement, the Court has to enter a finding whether the agreement so produced was executed by the parties or not. It could be by recording necessary evidence or based on the affidavits or based on several materials. If it is found that the agreement produced was one executed by the parties and the execution was not vitiated and the agreement contains an arbitration clause, the Court shall refer the parties to arbitration as provided under Section 8(1) of the Act. 17. Coming to the facts of the present case, the original tender document indisputably contained an arbitration clause. 17. Coming to the facts of the present case, the original tender document indisputably contained an arbitration clause. However, the moot question is whether the original plaintiff agreed to such a clause as a part of the contract. I may only refer to two letters which will make it very abundantly clear that there was an understanding between the parties that in case of any dispute, the dispute shall not be referred to an arbitrator, but the same would be resolved in the Court of competent jurisdiction situated at Ahmedabad only and at no other place. 18. On 22nd June, 2004, the original plaintiff addressed a letter to the defendant stating as under:- "Jt. General Manager Government of India, Ministry of Defence, Metal and Steel Factory, Ishapore 743 144 Sub: Quotation against your tender No.T-0285G2P304 due on 25.6.04 for 9000 kgs Ferro Molybdenum Dear Sir, MATERIAL FERRO MOLYBDENUM AS PER IS 1469-1993 Molybdenum : 60% Min ro 65% max. Carbon : 0.10% max Silicon : 2.00% Sulphur : 0.08% Phosphurus : 0.06% Copper : 0.50% max Aluminum : 0.50% Size : 10-50 mm Oversize 10% undersize 5% Packing: 100 (Hundred) kgs steel drums Total quantity offered 9 MT (NINE MT) Delivery : 3MT August 2004 3MT September 2004 3 MT October 2004 Payment:- Payment in advance by way of cheque against proforma invoice based on 60% pro-rata. The material will be of between 60-65%. Proforma invoice will be as per your inspection certificate. However, against proforma invoice of 60% Moly content + excise, you will have to release the payment along with your Note/acceptance report and material will only be dispatched after receipt of these a Inspection. At our works at Ahmedabad We shall write a letter to Metal and Steel Factory to depute your inspector to inspect the goods and also witness weighing. Your inspector shall draw four samples out of which two sealed samples will be carried by your inspector and two sealed samples will be given to us. Out of the samples given to us, one sample will be analyzed at our end and another will be kept as an umpire sample. We will convey our findings to your inspector and your inspector will also get one sample analyzed at your end. Out of the samples given to us, one sample will be analyzed at our end and another will be kept as an umpire sample. We will convey our findings to your inspector and your inspector will also get one sample analyzed at your end. Your inspector will compare the findings of ours with yours finding and in case of wide difference above 0.5% in main element, the umpire sample kept with us will be sent to NML Field Station, Naroda. Ahmedabad and their report will be binding to both buyer as well as to seller and on strength of NML report, your inspecting Authority' will give us green signal by sending inspection note to dispatch the material then only the material will be dispatched. OR b. Your inspector will draw this sample and test it jointly in our lab. This result will be final. Insurance: As the material is being offered FOR Ishapore basis we shall take necessary insurance at our end. However, in the case of any shortage, leakage, pilferage, damage etc. found during transit, you shall have to take open delivery of the consignment from the carrier and shall have to take/obtain necessary shortage certificate which will have to be sent to us for lodging shortage claim with concerned insurance Company at our end. These instructions are to be strictly adhered to otherwise we will not be responsible for any complaint regarding shortage. Force Majure Clause: The delivery is offered in good faith and subject to the provisions of a DGS and D terms and conditions: No liquidated damages for late delivery etc. Jurisdiction: For all disputes arising out of the contract or negotiations with us shall be constituted in the Court of competent jurisdiction situated at Ahmedabad only and no other place/Court. No late delivery charge, if there is a delay in sending your inspector. If earlier, lot payment has not been sent then accordingly; next lot inspection will be delayed. Each lot to be offered for inspection within 15 days of dispatch of earlier lot. Liability: No financial liability of our Company in any manner for any reason whatsoever it may be. Validity: This offer is valid for your acceptance till ten days from the date of opening and thereafter subject to our reconfirmation." 19. The defendant responded to the letter dated 22nd June, 2004, by giving a reply on 5th July, 2004. Liability: No financial liability of our Company in any manner for any reason whatsoever it may be. Validity: This offer is valid for your acceptance till ten days from the date of opening and thereafter subject to our reconfirmation." 19. The defendant responded to the letter dated 22nd June, 2004, by giving a reply on 5th July, 2004. The letter of the defendant dated 5th July, 2004 is as under:- "To, M/s Electro Ferro Alloys Pvt. Ltd. 208, Aditya Building, Near Khadayata Colony, Mithakhali Six Roads, Ellisbridge, Ahmedabad – 380 006 Attn: Shri Adarsh Jhaveri Sub: Letter of Intent Ref: This Factory Tender No.0285G2P304 opened on 25/6/2004 and your Qtn dated 22.6.2004. Dear Sirs, Please note that your offer for the o following stores has been accepted and our supply order for the same is under issue separately after observing all the requisite formalities:- Ferro Molybdenum to specn. IS: 1469/1993 Gr. Fe Mo 63.c-10 Qty: 9000 kg Price: Rs.1125.00 per kg + ED @ o 8%; ST: Nil against form "D" Total cost: Rs.1,09,35,000.00 In view of the extreme urgency of our requirement, you are requested to effect supply the material immediately. Please consider this letter as "LETTER OF INTENT". (M.P. Yadav) JT. GENERAL MANAGER FOR GENERAL MANAGER" 20. Thus, from the letter of the plaintiff dated 22nd June, 2004, it is very clear that the plaintiff agreed to resolve all the disputes which could arise in the Court of competent jurisdiction situated at Ahmedabad arid not by way of arbitration and the defendant in no uncertain terms accepted the same vide 'letter dated 5th June, 2004. Thus, the intention of the 'parties was very clear. It is only at the last minute that the defendant has come out with a case that they never agreed to do away with the arbitration clause. 21. I find substance in the' submission of Mr. Suneet Shah, the learned Counsel appearing for the respondent that once the terms and conditions are laid and agreed upon by both the parties, they cannot be changed or altered or varied without the consent of both the parties. I also find substance in the submission of Mr. Shah that between 5th June, 2004 and 14th July, 2004, neither a request was made nor any objection was raised as regards change in the terms and conditions of quotation dated 22nd June, 2004, except for the terms of payment. I also find substance in the submission of Mr. Shah that between 5th June, 2004 and 14th July, 2004, neither a request was made nor any objection was raised as regards change in the terms and conditions of quotation dated 22nd June, 2004, except for the terms of payment. 22. In my opinion, the trial Court has rightly appreciated this aspect of the matter and rejected the application. No error much less an error of law could be said to have been committed by the trial Court in rejecting the application, warranting any interference at my end in exercise of my supervisory jurisdiction under Article 227 of the Constitution of India. In the result, this petition fails and is accordingly rejected. Order passed by the Chamber Judge, Court No. 13 dated 22nd January 2007, below Exh.24, preferred by the original defendants of Civil Suit No. 83 of 2005 is hereby confirmed. In the facts and circumstances of the case, however, there shall be no order as to costs. The interim order granted earlier stands vacated forthwith. The Court below is directed to take up the hearing of Civil Suit No. 83 of 2005 at the earliest and dispose of the same preferably by 31st July, 2013. After the order was pronounced, Mr. Hriday Buch, the learned Standing Counsel for the Union of India prayed for stay of the operation of the order for a period of four weeks, as the Union of India intends to challenge the order before the higher forum. The said prayer is opposed by Mr. Manav Mehta, the learned Counsel appearing for the respondents. In the facts and circumstances of the case, there shall be stay of the operation of this order for a period of four weeks from today. (UPV) (No order as to costs)