JUDGMENT : I.P. Mukerji, J. The Court: This is an application under Section 8 of the Arbitration & Conciliation Act, 1996. It is taken out by the State of West Bengal, the defendant in the suit. 2. Mr. Samrat Sen, learned Advocate appearing for them relies on clause 10 of the agreement between the parties regarding resolution of disputes. This clause is inserted hereunder: "10.0 Resolution of Disputes a. Both the GoWB and the PMSP will try to amicably settle disputes by direct negotiation. b. If no settlement could be reached within a time frame as may be specified, either of the Parties may refer the matter to a Dispute Resolution Board (DRB) to be constituted by the GoWB comprising a panel of eminent engineers experts / retired judges, who will act as reconcilliator and communicate their decision upon hearing both the parties, within a specified time limit, which shall be binding on both the parties. c. However, any of the parties aggrieved with such decision, may seek formal arbitration. In accordance with provisions of `Arbitration and Conciliation Act, 1996'. The arbitrator, while hearing the case, shall give due cognizance to the views expressed by the DRB." 3. He submits that there is an arbitration clause and by its operation the parties should be referred to arbitration. 4. Mr. S. N. Mitra, learned Senior Advocate for the plaintiff takes the following points: 5. He argues that the State threatened to invoke the bank guarantee for Rs. 7.5 crores, all of a sudden. No opportunity was given to his client to "amicably settle" the dispute by negotiation as provided in clause 10(a). Furthermore, no Dispute Resolution Board (DRB) was constituted by the State to go into the matter, in case of failure of settlement. Hence the question of the arbitration clause coming into force does not arise. 6. First, he cites N. Radhakrishnan v. Maestro Engineers And Others, reported in (2010) 1 SCC 2. He refers to paragraphs 21 and 22 of the judgment. He says that in this case serious allegations of fraud are involved with regard to invocation of the bank guarantee. The Hon'ble Supreme Court, in the said decision held that in cases where fraud was alleged the matter was to be adjudicated by the court. 7. He attacks the word "may" in sub-clause (c) of clause 10. He says that in this case serious allegations of fraud are involved with regard to invocation of the bank guarantee. The Hon'ble Supreme Court, in the said decision held that in cases where fraud was alleged the matter was to be adjudicated by the court. 7. He attacks the word "may" in sub-clause (c) of clause 10. He argues that by this clause the agreement could be construed to be an agreement to agree on arbitration. Either party was given an option to seek arbitration. In other words, the clause is not mandatory. He cites Jyoti Brothers v. Shree Durga Mining Co., reported in AIR 1956 Cal 280 , M/s. B. Gopal Das, Bombay And Others v. M/s. Kota Straw Board (P) Ltd., Kota, reported in AIR 1971 Rajasthan 258, Gajulapalli Chenchu Reddy v. Koyyana Jaya Lakshmi, reported in 2009 4 Arbitration Law Reporter 119 (paragraphs 2, 12 and 13) and Sara International Ltd. v. Golden Agri International Pte. Ltd. And Anr., reported in 2010 3 Arbitration Law Reporter page 29. 8. I will discuss these cases later on in this judgment. 9. Mr. Sen on reply says that clause 10 has to be read as a whole. Resolution of disputes is contemplated, in stages. Any party aggrieved by the decision of the Board has to take recourse to arbitration. 10. He also argues that this is an ordinary case involving usual allegations of fraud and special equity with regard to invocation of a bank guarantee. In such matters the Court should not decline to refer the dispute to arbitration. He points out that in the 2010 decision of the Supreme Court reference is made to an older decision of that Court in Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak, reported in AIR 1962 SC 406 wherein it was said that allegations of fraud had to be very serious and the party charged with it could approach the Court to try the dispute itself. 11. To this Mr. Mitra retorts that the later decision of the Supreme Court does not make any exception with regard to the party who could resist arbitration. 12. Let me first interpret clause 10 of the agreement between the parties. It is very clear in its terms. The parties would first try to amicably settle the disputes. Thereafter the matter could be referred to the Dispute Resolution Board, in case the settlement effort failed. 12. Let me first interpret clause 10 of the agreement between the parties. It is very clear in its terms. The parties would first try to amicably settle the disputes. Thereafter the matter could be referred to the Dispute Resolution Board, in case the settlement effort failed. If a party was aggrieved by the decision of the Board which would act as a conciliator, it "may" seek arbitration. 13. In Jyoti Brothers v. Shree Durga Mining Co., reported in AIR 1956 Cal 280 the clause was "can be settled by arbitration". A learned Single Judge of this Court went into semantics by analysing the effects of "can be settled by arbitration" and "shall be settled by arbitration" and held that use of the word "can" did not constitute a present clear cut arbitration agreement to bind the parties, but was only an agreement to agree, which was invalid. 14. In M/s. B. Gopal Das, Bombay And Others v. M/s. Kota Straw Board (P) Ltd., Kota, reported in AIR 1971 Rajasthan 258 the said decision of this Court was relied upon. On interpretation of the arbitration clause involved using the word "may", the learned Judge held that on a construction of the arbitration clause it could be said it was an agreement to agree. 15. An agreement to agree is not an agreement at all and one has to go by this factual finding of the learned Judge with regard to the arbitration clause involved in that case. 16. The phrase used in the arbitration clause in Gajulapalli Chenchu Reddy v. Koyyana Jaya Lakshmi, reported in 2009[4] Arb. LR 119 [AP] "may require that the dispute be referred to a common arbitrator". The Andhra Pradesh High Court interpreted this phrase to come to the conclusion that the agreement also was an agreement to agree and did not constitute an arbitration clause. The Delhi High Court in Sara International Ltd. v. Golden Agri International Pte. Ltd.& Anr., reported in 2010 [3] Arb. LR 29 [Delhi] was dealing with the expression "arbitration, if any". It interpreted that phrase as meaning that the parties were given a charter to enter into a fresh agreement with regard to arbitration. 17. All the decisions of the High Courts, including this court were based on interpretations of the respective arbitration clauses. LR 29 [Delhi] was dealing with the expression "arbitration, if any". It interpreted that phrase as meaning that the parties were given a charter to enter into a fresh agreement with regard to arbitration. 17. All the decisions of the High Courts, including this court were based on interpretations of the respective arbitration clauses. In each of these cases, on an interpretation of the agreement concerned it was held that it did not constitute a present agreement and gave an option to the parties to enter into an arbitration agreement at a later point of time. 18. An arbitration clause is an agreement within an agreement. It has to be in clear terms certain, valid and create definite rights in and obligations upon the parties. 19. Now, it is to be examined whether the arbitration clause here is clear and certain and imposes rights and obligations upon the parties. 20. My interpretation of clause 10 is this. A mechanism is provided for settlement of disputes between the parties. If that fails, a further mechanism is provided by the Disputes Resolution Board [DRB] to conciliate so that a decision is arrived at, which, according to the conciliator, is the right decision to bind the parties. It is different from the conciliation which is provided in section 89 of the Code of Civil Procedure and part III of the Arbitration and Conciliation Act, 1996 which simply enjoin the conciliator to persuade or direct the parties towards settlement. Nobody can be aggrieved by that. Conciliation can only fail. 21. The next clause says that if a party is aggrieved by such a decision it `may' seek formal arbitration. Is it an agreement to agree? Certainly not, in my view. Now, it is possible for a party to be aggrieved by a decision yet not take any further action at all. He may accept it somehow or he may want arbitration. That is why, in my opinion, the expression `may' is used. He has the option of seeking formal arbitration. This expression `may' is to be read in this context only. It does not give any right to a party to abandon this process of resolution of disputes referred to under clause 10 on the strength of the above decisions and approach a court of law. 22. He has the option of seeking formal arbitration. This expression `may' is to be read in this context only. It does not give any right to a party to abandon this process of resolution of disputes referred to under clause 10 on the strength of the above decisions and approach a court of law. 22. Moreover, if an interpretation is made of the word `may' that it is an agreement to enter into an agreement, then the whole resolution of disputes clause would also be an agreement to enter into an agreement, because the arbitration clause is a part of it. Certainly, this was not the intention of the parties when they entered into this agreement. It would be an absolutely absurd interpretation. 23. I hold that the arbitration agreement is perfectly clear, valid and certain and there is no ambiguity with regard to any of its terms. 24. But I do also observe that if the parties provided in clause 10 that they had an obligation to amicably settle the disputes by direct negotiation, the State ought not to have threatened the plaintiff with immediate invocation of the bank guarantee, as pleaded in the plaint, but should have given them an opportunity to avail of the resolution of disputes procedure referred to in clause 10. In this respect they were clearly in error. Having received an immediate threat of invocation of the bank guarantee the plaintiff was compelled to approach this court by way of filing of a suit because the procedure mentioned in sub-clauses [a] and [b] was rendered useless by the said threat. Although there is a valid arbitration agreement, it cannot be invoked unless the procedure in clauses 10[a] and [b] is accomplished. 25. One more point has to be discussed before closing the case. Mr. Sen was right when he submitted that only in cases of colossal fraud and at the invitation of the party charged with it, should the court decide to hear the dispute itself and not refer the matter to arbitration. Otherwise all cases regarding invocation of bank guarantee where allegations of fraud are usual would have to be heard by the court, despite the arbitration clause. 26. The decision of the Hon'ble Supreme Court of 2010 has to be read with the earlier 1962 decision of that Court, in my humble opinion. 27. Otherwise all cases regarding invocation of bank guarantee where allegations of fraud are usual would have to be heard by the court, despite the arbitration clause. 26. The decision of the Hon'ble Supreme Court of 2010 has to be read with the earlier 1962 decision of that Court, in my humble opinion. 27. As I have held, the State was in breach of its obligations under clause 10, by suddenly threatening to invoke the bank guarantee. But no party has rescinded the arbitration agreement. The agreement is subsisting. The arbitration agreement, which is valid, is conditional upon exhaustion of the procedure in clauses 10[a] and [b]. In our case, there is no compliance, as yet of these two clauses. Suppose the State does not sit down to settle the dispute or refer the matter to the Board after constituting it, there can be no arbitration. This suit, filed before the State activating clauses [a] and [b] cannot be stayed now. Suppose the plaintiff, which is raising the dispute does not cooperate with the State in complying with clauses 10[a] and [b]. Then it can safely be presumed that they are not pursuing the dispute. 28. The intention expressed in section 8 of the Arbitration and Conciliation Act, 1996 is that the parties be referred to arbitration. Here, because of the special clause 10 the parties cannot be, immediately, referred to arbitration but the scope and intent of the provision should be so interpreted so as to mean that the parties be referred to the procedure of negotiation, settlement etc. agreed upon by them, that may ultimately result in arbitration. Thereafter, the Court should consider whether to pass a formal referral order or not. 29. In those circumstances, this section 8 application is disposed of by the following order : [a] The plaintiff is given an option of signifying their intention to the defendant, to settle the disputes under clause 10[a] by 30th May, 2014. In that case, the process of resolution of disputes in clauses 10[a] and [b] can be set into motion. [b] Only when the Disputes Resolution Board [DRB] makes its decision and the plaintiff does not accept it, the plaintiff shall seek arbitration. Till that time the suit cannot be permanently stayed. Neither can be parties be referred to arbitration, aborting the above procedure. [b] Only when the Disputes Resolution Board [DRB] makes its decision and the plaintiff does not accept it, the plaintiff shall seek arbitration. Till that time the suit cannot be permanently stayed. Neither can be parties be referred to arbitration, aborting the above procedure. [c] Therefore, unless an opportunity is given to the plaintiff to resort to sub-clauses [a] and [b], in my opinion, the bank guarantee should not be invoked provided the plaintiff keeps the bank guarantee suitably renewed; [d] Subject to [f] below, till 31st October, 2014 or until further orders, whichever is earlier, the defendant should not invoke the bank guarantee. [e] The parties would have the right to make an application, at the appropriate time under section 9 of the Arbitration and Conciliation Act, 1996, in accordance with clause 10. [f] I make it clear that if the plaintiff does not evince its intention to avail of clause 10 by 30th May, 2014, the defendant will have the option of invoking the bank guarantee immediately. 30. Liberty to the defendant to take out another section 8 application upon its compliance with sub-clauses [a] and [b] of clause 10. 31. Let the interim application appear on 9th June, 2014, to pass appropriate orders. 32. With the above observations, this application is disposed of. Certified photocopy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.