Order 1. This arbitration application has been preferred under sub section 6 of Section 11 of the Arbitration and Conciliation Act, 1996, for appointment of an Arbitrator. 2. Counsel for the applicant has submitted that the notice inviting tender was published. Tender was filled up by this applicant for the work in question i.e. construction of dwelling units. Tenders were opened and this applicant was found lowest bidder. Therefore, he was called vide letter at Annexure2 for negotiation of the price. After one round of negotiation was over, he was again called vide letter dated 10th July, 2009 at Annexure5 for negotiation. Thereafter, there was further negotiation between the parties and ultimately, 7 work orders were issued which is at Annexure7 series. It is further submitted by the counsel for the applicant that in due compliance of the work orders Performance Guarantee was also given of Rs.4,05,68,139/. Thereafter, draft agreement was also given by this applicant, which was signed by this applicant and sent to the Ranchi Municipal Corporation, but, for any reason whatsoever they have not signed the written agreement. No fault lies in the part of this applicant because the applicant has already signed the agreement. Thereafter, the agreement was cancelled by the Ranchi Municipal Corporation vide order at Annexure14. Thereafter, arbitration notice dated 26th February, 2010 (Annexure16) was given by this applicant as per clause 29 of PartIConditions of Contract contained, in Section 2Conditions of Contract, Evaluation Criteria & Formats to be filled in by the Bidder, as mentioned in Volume I under Clause 9 of Instruction to Bidders. These documents are annexed as Annexure18 to the compilation. No decision was taken by the Engineer of the Ranchi Municipal Corporation. 3. It is submitted by the counsel for the applicant that another notice was given on 10th June, 2010 (Annexure17) under the same clause no. 29 of the Conditions of Contract, but, no decision was taken by the Engineer of the Corporation nor appointment of Arbitrator was made for deciding the disputes between the parties. It is submitted by the counsel for the applicant that in fact Notice Inviting Tender was published, this applicant filled up the tender and found to be lowest one further negotiation was held between the parties and ultimately, 7 work orders were given. It is submitted by the counsel for the applicant that in fact Notice Inviting Tender was published, this applicant filled up the tender and found to be lowest one further negotiation was held between the parties and ultimately, 7 work orders were given. Draft agreement was also given by this applicant, which was signed by this applicant and Performance Bank Guarantee to the tune of Rs.4,05,68,139/was also given and accepted by the Ranchi Municipal Corporation and therefore, it cannot be said that there is no agreement of arbitration in existence at all. In fact, clause no. 29, as stated hereinabove, is an arbitration clause and the Engineer of the Ranchi Municipal Corporation has to decide the two notices and the disputes between the parties. Unnecessarily, the opposite party is taking time for appointment of an Arbitration and is raising the plea that there is no written agreement, in fact, under the Indian Contract Act, 1872, there is no need of any written agreement at all. Nonetheless, in the facts and circumstances of the present case, as stated hereinabove, under clause 29 there is a clause of arbitration in the notice inviting tender and in the conditions of tender. 4. Counsel for the applicant has relied upon the decision rendered by Hon'ble Supreme Court reported in (2011) 2 SCC 151 especially in paragraph nos. 16, 17, 21, 22 and 23 and also relied upon (2003) 7 SCC 418 paragraph no. 4, 13 and 14 and has submitted that there is an arbitration clause between the parties for deciding the disputes and as per the arbitration clause, let a retired Hon'ble Judge of this High Court may be appointed as an Arbitrator so that the disputes may be decided at the earliest and within time bound schedule and they shall cooperate in the hearing before the learned Arbitrator and shall not ask for any unnecessary adjournment. 5. I have heard counsel for the Ranchi Municipal Corporation, who has submitted that they have filed a detailed counter affidavit and has submitted that there is no written agreement between the parties and there is no existence of an arbitration clause at all and hence, this application may not be entertained by this Court under Section 6 of Section 11 of the Act, 1996. It is further submitted by the counsel for the opposite party Corporation that the draft agreement which was sent of course singed by this applicant, but, they had added certain vital clauses in the said draft and there was all were material changes in the agreement and hence, the said draft agreement was not signed by the Ranchi Municipal Corporation and thus, there is no arbitration clause in existence and the only available option for the application is to file suit before the competent court as per Section 15 of the Code of Civil Procedure. 6. Having heard the counsels for both the sides and looking to the facts and circumstances of the case, I hereby, allow this arbitration application mainly for the following facts, reasons and judicial pronouncements: (i) Notice Inviting Tender was published by the Ranchi Municipal Corporation on 11th October, 2008 for construction of dwelling units and development of infrastructure at various places in the city of Ranchi including at Hatma basti under Basic Services to Urban Poor Programme. (ii) This applicant was found to be the lowest one in the tender scrutiny process. (iii) As this applicant was found to be the lowest one, he was called for negotiation on 27th February, 2009 vide letter at Annexure2. The negotiation was taken place and further price for construction of dwelling units were reduced by this applicant than what was mentioned in the tender. (iv) Looking to the further facts of the case, it appears that the Ranchi Municipal Corporation was interested in this applicant for giving contract and therefore, he was called again for further negotiation in the second round and on 10th July, 2009, this applicant was again called for negotiation vide letter at Annexure5 to this arbitration application and further negotiation between the parties were held and the price was reduced by this applicant for the construction of dwelling units in question. (v) Looking to Annexure7 series of this arbitration application, it appears that the intention of the parties was crystalised and the offer of the applicant was accepted and 07 different work orders were issued by the Ranchi Municipal Corporation dated 3rd August, 2009, which are at Annexure7 series to this arbitration application. This grant of work orders reflects that the Ranchi Municipal Corporation had accepted the lowest price offered by this applicant for the work in question. This grant of work orders reflects that the Ranchi Municipal Corporation had accepted the lowest price offered by this applicant for the work in question. (vi) The Performance Bank Guarantee was also given by this applicant at Rs.4,05,68,139/which has also been accepted by the Ranchi Municipal Corporation without any objection, by the Ranchi Municipal Corporation that they are not accepting these bank guarantees. These documents are at Annexure8 series to this arbitration application. (vii) Thereafter, being satisfied by the lowest price offered by this applicant in the tender process, being satisfied by the reduction in the price due to further negotiations, 07 work orders were given by the opposite party to this applicant and the Performance Bank Guarantee given by this applicant was accepted by the opposite party without any objection. The signed draft agreement given by this applicant was to be signed by the Ranchi Municipal Corporation, but, thereafter, the Ranchi Municipal Corporation has not signed the draft agreement for any reason whatsoever and the agreement was cancelled by the Ranchi Municipal Corporation vide their letter dated 8th December, 2009, (Annexure14 to the memo of this arbitration application). (viii) Now the dispute started between the parties from the cancellation of this contract or termination of this contract. Now, this Court has to verify whether every time while appointing an Arbitrator written and and signed agreement is required or not? (viii) Now the dispute started between the parties from the cancellation of this contract or termination of this contract. Now, this Court has to verify whether every time while appointing an Arbitrator written and and signed agreement is required or not? (ix) Clause 29.1 of the Conditions of Contract contained in Section 2 of Volume 1 under clause 9 of the construction of dwelling units and development of infrastructure in Ranchi town under BSUP Programme, which is apart and parcel of the tender, reads as under: “29.1 Engineer's Decision If any dispute of any kind whatsoever arises between the Employer and the Contractor in connection with, or arising out of, the Contract or the execution of the works, whether during the execution of works or after their completion, and before or after repudiation or other termination of the Contract, including any dispute as to: a) The meaning of the specifications, designs, drawings and instructions herein before mentioned, b) The quality of the workmanship or materials, c) Any opinion, instruction, determination, certificate or valuation of the Engineer, or d) Any other question, claim, right, matter or anything whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, conditions, orders or the failure to execute the same, The dispute shall, in the first place, be referred in writing to the Engineer who has jurisdiction over the Works specified in the Contract, with a copy to the other party. Such reference shall state that it is made pursuant to this Clause. Not later than the forty second day after the day on which he received such reference the Engineer shall give written notice of his decision to the Employer and the Contractor. Such decision shall state that it is made pursuant to this Clause. Subject to other forms of settlement hereinafter provided, the Engineer's decision in respect of every dispute or difference so referred shall be final and binding upon the Contractor and the Employer. Unless the Contract has already been repudiated or terminated, the Contractor shall, in every case, continue to proceed with the Works with all due diligence and the Contractor and the Employer shall give effect forthwith to every such decision of the Engineer until or unless the same shall be revised in an amicable settlement or as hereinafter provided.” (Emphasis Supplied) In view of the aforesaid clause no. 29.1, which is known as Conditions of Contract, which is a part and parcel of the bidding documents and which is at Annexure18, it appears this is an Arbitration Clause. There is no need of set type of arbitration clause. There is no need that such type of arbitration clause has heading that this is an arbitration clause. Drafting of the agreement depends upon the parties. Under this clause, notices for arbitration were given by this applicant dated 26th February, 2010 (Annexure16) and secondly, on 10th June, 2010 (Annexure17) to the Engineer of the Ranchi Municipal Corporation for deciding the disputes between the parties. Inspite of these notices, the Engineers of the Ranchi Municipal Corporation has not decided the disputes nor they have referred the matter to any other Arbitrator and hence, the opposite party has failed to decide the dispute between the parties despite there is an arbitration clause. (x) It has been held by Hon'ble Supreme Court in the case of Bihar State Mineral Development Corporation and Another Vs. Encon Builders (I) (P) Ltd. as reported in (2003) 7 SCC 418 in paragraph nos. 4, 13 and 14 as under: “4. Clauses 37, 59 and 60 which, according to the appellants, are relevant for the purpose of this case read thus: “37. It will be at the absolute discretion of the Managing Director of the Corporation to terminate the agreement in the following events: (a) If the excavation work is found to be unsatisfactory. (b) If the agency be involved in any action involving moral turpitude. (c) If the agency be involved in any action causing breach of peace, indiscipline at the mines or stops the work before the expiry of the agreement period. (d) If the agency fails to comply with any of the terms and conditions contained herein or that would be mutually agreed upon for the execution of the work. (e) If the agency fails to pay full wages to workmen as per the prevailing Act/awards from the management premises and in presence of the Corporation authorised representative. (d) If the agency fails to comply with any of the terms and conditions contained herein or that would be mutually agreed upon for the execution of the work. (e) If the agency fails to pay full wages to workmen as per the prevailing Act/awards from the management premises and in presence of the Corporation authorised representative. Before terminating the agreement, one month’s notice under registered post on the address given in this agreement will be given to the agency without prejudice to the right and claim under the agreement and the Corporation; will have the right to adjust such amount towards the financial loss that the Corporation might incur due to such acts or commissions of the agency from bills or security deposit or earnest deposit or through other legal proceedings. 59. If during course of inspection or on reports of officers of the Corporation the Managing Director finds that the working operations are not carried out in a workmanlike manner or payments to workmen are not made timely and according to provisos of the rules and regulations, he may impose fine on the agency up to a maximum of rupees five thousand at a time depending on the gravity of the violations. 60. In case of any dispute arising out of the agreement, the matter shall be referred to the Managing Director, Bihar State Mineral Development Corporation Limited, Ranchi, whose decision shall be final and binding.” 13. The essential elements of an arbitration agreement are as follows: (1) There must be a present or a future difference in connection with some contemplated affair. (2) There must be the intention of the parties to settle such difference by a private tribunal. (3) The parties must agree in writing to be bound by the decision of such tribunal. (4) The parties must be ad idem. 14. There is no dispute with regard to the proposition that for the purpose of construing an arbitration agreement, the term “arbitration” is not required to be specifically mentioned therein. The High Court, however, proceeded on the basis that having regard to the facts and circumstances of this case, the arbitration agreement could have been given effect to. We may, therefore, proceed on the basis that clause 60 of the contract constitutes an arbitration agreement. The High Court, however, proceeded on the basis that having regard to the facts and circumstances of this case, the arbitration agreement could have been given effect to. We may, therefore, proceed on the basis that clause 60 of the contract constitutes an arbitration agreement. (Emphasis Supplied) In view of the aforesaid decision, the essential elements of the existence of the arbitration agreement have been referred in paragraph no. 13 and in this reported decision also, there is a clause no. 60 that in case of any dispute between the parties, the Managing Director of Bihar State Mineral Development Corporation will decide the dispute and it shall be final and binding. In this clause 60, there was no use of word 'Arbitration Agreement', but, then also it was also held by this Hon'ble Supreme Court that this type of clause shall be treated as arbitration clause. Similar are the facts over here. Clause 29 reflects that in case of any dispute or any tender arising out of the agreement the same will be decided by the Engineer of the Ranchi Municipal Corporation. Thus, even if the word 'arbitration agreement' is not used, the said clause 29 is an arbitration clause. (xi) It has been held by the Hon'ble Supreme Court in the case of State of Uttar Pradesh and others vs Combined Chemicals Company Private Limited as reported in (2011) 2 SCC 151 especially in paragraph nos. 16, 17, 21, 22 and 23 as under: “16. Shri Rishi Agrawala, learned counsel appearing for the respondent argued that a contract will be deemed to have been executed between the State Government and the respondent because the acceptance letter was issued in the name of the Governor. The learned counsel submitted that once the acceptance of the tender was communicated, the contract became complete and the respondent was entitled to invoke the arbitration clause. In support of his argument, the learned counsel relied upon the judgments in Sardar Sucha Singh v. Union of India, Smita Conductors Ltd. v. Euro Alloys Ltd., Nimet Resources Inc. v. Essar Steels Ltd. and UNISSI (India) (P) Ltd. v. Post Graduate Institute of Medical Education and Research. 17. We have given our serious thought to the respective arguments. A reading of the letter dated 16111985 shows that the same was issued for and on behalf of the Governor of Uttar Pradesh. v. Essar Steels Ltd. and UNISSI (India) (P) Ltd. v. Post Graduate Institute of Medical Education and Research. 17. We have given our serious thought to the respective arguments. A reading of the letter dated 16111985 shows that the same was issued for and on behalf of the Governor of Uttar Pradesh. In the opening paragraph of the letter, Appellant 2 indicated that the bid given by the respondent was being accepted on behalf of the Governor of Uttar Pradesh. At the end of that letter and Schedule A appended thereto, it was clearly mentioned that the contract was being made for and on behalf of the Governor of Uttar Pradesh. The contents of Paras 4, 7, 12 and 14 show that Appellants 1 and 2 had awarded a contract to the respondent for supply of 200 metric tons of zinc sulphate of agriculture grade for a total price of Rs. 10,95,200 and the terms and conditions mentioned in the acceptance letter, tender form and the agreement forms were treated as part of the contract. The schedule of supply was also indicated in the acceptance letter. Clause 10 of the terms and conditions embodied in the acceptance letter did speak of formal agreement, but the same was to be executed only if required. Undisputedly, the respondent completed all the formalities inasmuch as it deposited the security money and dispatched a duly signed agreement to the Directorate of Agriculture, which was to take the supply of zinc sulphate, and also sent letters for placing the supply order. Thus, a contract had come into existence between the parties and the fact that the Director of Agriculture did not sign the formal agreement sent by the respondent cannot lead to an inference that the contract had not been executed. 21. While considering the question whether there was an arbitration agreement between the appellant and the respondent, this Court extensively referred to the contents of the letters of intent and observed: (Bindal Agro case, SCC pp. 77273, paras 3840) “38. Clause C of letters of intent provides that the purchase order shall be subject to the ‘General Conditions of Purchase’ included in the inquiry, as amended by DR’s comments thereto, Revision 4 dated 1061991. 77273, paras 3840) “38. Clause C of letters of intent provides that the purchase order shall be subject to the ‘General Conditions of Purchase’ included in the inquiry, as amended by DR’s comments thereto, Revision 4 dated 1061991. Therefore, the General Conditions of Purchase which contains the arbitration clause, are not made a part of the letters of intent nor are the letters of intent made subject to the General Conditions of Purchase. The letters of intent merely provide that if and when the purchase order is placed, the purchase order will be subject to the General Conditions of Purchase, as modified by Revision 4. Therefore, the point of time at which the General Conditions of Purchase will become applicable, is the point when the purchase order is placed and not earlier. Consequently, Clause 27.4.2 of the General Conditions of Purchase containing the arbitration clause would become applicable and available to the parties only when the purchase order was placed and not earlier. The term ‘purchase order’ has a specific meaning and connotation. The purchase order is the ‘agreement entered into between BINDAL and the prospective supplier as recorded in the purchase order form (prepared in the form of Attachment VII to the General Conditions of Purchase) signed by the parties, including all attachments and annexures thereto and all documents incorporated by reference therein together with any subsequent modifications thereof in writing’. Admittedly, no such purchase order was placed by either BINDAL or anyone authorised by BINDAL. It is also evident from Clause I of the letters of intent that the purchase order was to be issued simultaneously with the letter of credit. Clause M made it clear that the letters of intent were being issued subject to necessary approvals being given by the authorities of the Indian Government. These provisions clearly indicate that the letters of intent were only a step leading to purchase orders and were not, by themselves, purchase orders. Therefore, issue of the letters of intent by KGK, assuming that it was done on behalf of BINDAL, did not mean that the General Conditions of Purchase which contains the provision for arbitration became a part of the letters of intent or became enforceable. 39. It is now well settled that a letter of intent merely indicates a party’s intention to enter into a contract with the other party in future. 39. It is now well settled that a letter of intent merely indicates a party’s intention to enter into a contract with the other party in future. A letter of intent is not intended to bind either party ultimately to enter into any contract. This Court while considering the nature of a letter of intent, observed thus in Rajasthan Coop. Dairy Federation Ltd. v. Maha Laxmi Mingrate Mktg. Service (P) Ltd.: (SCC p. 408, para 7) 7......The letter of intent merely expressed an intention to enter into a contract. … There was no binding legal relationship between the appellant and Respondent 1 at this stage and the appellant was entitled to look at the totality of circumstances in deciding whether to enter into a binding contract with Respondent 1 or not.’ 40. It is no doubt true that a letter of intent may be construed as a letter of acceptance if such intention is evident from its terms. It is not uncommon in contracts involving detailed procedure, in order to save time, to issue a letter of intent communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that the detailed contract would be drawn up later. If such a letter is issued to the contractor, though it may be termed as a letter of intent, it may amount to acceptance of the offer resulting in a concluded contract between the parties. But the question whether the letter of intent is merely an expression of an intention to place an order in future or whether it is a final acceptance of the offer thereby leading to a contract, is a matter that has to be decided with reference to the terms of the letter. Chitty on Contracts (Para 2.115 in Vol. 1, 28th Edn.) observes that where parties to a transaction exchanged letters of intent, the terms of such letters may, of course, negative contractual intention; but, on the other hand, where the language does not negative contractual intention, it is open to the courts to hold that the parties are bound by the document; and the courts will, in particular, be inclined to do so where the parties have acted on the document for a long period of time or have expended considerable sums of money in reliance on it. Be that as it may.” 22. Be that as it may.” 22. A careful reading of the abovenoted judgment shows that the letters of intent issued on behalf of the respondent were never intended to be treated as a binding contract between the parties. There was no indication in the letters of intent about acceptance of the offer made by the appellant. Therefore, this Court held that no agreement was executed between the parties for purchase of the goods. 23. Reverting to the present case, we find that the bid given by the respondent was unequivocally accepted by the competent authority and the letter of acceptance was issued for and on behalf of the Governor by treating it to be a contract. Thus, there was substantial compliance with Article 299 of the Constitution. The execution of formal agreement was optional and was not sine qua non for supply of the goods by the respondent. In our view, if the acceptance letter is read along with other documents in the light of the conduct of the parties, it becomes clear that an agreement was executed between the competent authority and the respondent.” (Emphasis Supplied) In view of the aforesaid decision and in the decided case also, there was no written agreement and no signature was given by the Director of Agriculture of the State of U.P. as stated in paragraph 17 of this decision and as per paragraph no. 23 of this decision, the arbitration clause contained in the tender form was the part of the contract and the bidder had invoked the such arbitration clause contained in tender form for determination of the damages allegedly suffered by the bidder on account of the failure of the State of UP. and it has been held by the Hon'ble Supreme Court that arbitration clause which is part and parcel of the tender form can also be treated as arbitration for deciding the disputes between the parties. In the fact of the present case also tender invited. Applicant makes offer. Found lowest. He was given seven works orders. Opposite party accepts Bank Guarantee, for his performance. These facts, cumulatively, makes it clear that contract between the party was entered into. There is no need for written contract. Applicant has signed and sent the draft contract to respondent. As a part and parcel of the tender there were conditions of contract and clause no. Opposite party accepts Bank Guarantee, for his performance. These facts, cumulatively, makes it clear that contract between the party was entered into. There is no need for written contract. Applicant has signed and sent the draft contract to respondent. As a part and parcel of the tender there were conditions of contract and clause no. 29, as stated hereinabove, and as per the judgment reported in (2003) 7 SCC 418 , clause 29 is an arbitration clause. This arbitration clause is in the tender form and as per paragraph no. 24 of this decision reported in (2011) 2 SCC 151 , this clause, even in absence of, written and signed agreement between the parties is binding upon both the parties and hence, rightly this applicant has invoked clause 29 for arbitration to resolve the disputes between the parties. Twice the notices have been given i.e. on 26th February, 2010 (Annexure16) and on 10th June, 2010 (Annexure17), but, the Engineer of the Ranchi Municipal Corporation has not decided the disputes. 7. As a cumulative effect of the aforesaid facts, reasons and judicial pronouncements, this arbitration application is allowed. I hereby, appoint retired Hon'ble Mr. Justice Narendra Nath Tiwari of this Hon'ble Court, as an Arbitrator to decide the dispute between the parties. I request the learned Arbitrator to decide the dispute between the parties at the earliest, preferably within a period of six months from the date of the commencement of the arbitration process. Both the parties shall cooperate the hearing before the learned Arbitrator and they shall not ask for unnecessary adjournment. 8. Registrar General of this Court is directed to supply the papers of this arbitration application alongwith its annexures and affidavits as well as this order to the learned Arbitrator appointed by this Court. 9. This arbitration application is allowed and disposed of.