JUDGMENT : I.P. MUKERJI, J. 1. Often only after a very complex process a contract is made between the parties. It is quite common that a contract is preceded by hectic negotiations. Offers are made. Sometimes they are withdrawn no sooner than made. Even after receipt of the offer, the other party may not readily accept it. He may change its terms and present it as a counter offer to the offered for acceptance. Unless there is an unconditional acceptance of an offer and unless the parties are absolutely ad idem as to the bargain they have struck amongst themselves, there is no contract. A party cannot be held to it. At this point of time it is helpful to have a look at certain provisions of the Indian Contract Act, 1872: S. 2. - Interpretation-clause-In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context: (a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. (c) The person making the proposal is called the "promisor" and the person accepting the proposal is called the "promise". (h) An agreement enforceable by law is a contract. S. 4. - Communication when complete. - The communication of a proposal is complete when it comes to the knowledge of the person whom it is made. The communication of an acceptance is complete,- as against the proposer, when it is put in a course of transmission him so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer. The communication of a revocation is complete,- as against the person who makes it, when it is put into a course transmission to the person to whom it is made, so as to be out of power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge. 2. A point which is involved in this case is whether there was a concluded contract between the parties. The appellant (railways) says that there was a concluded contract whereas the respondents say that there was none. 3. 2. A point which is involved in this case is whether there was a concluded contract between the parties. The appellant (railways) says that there was a concluded contract whereas the respondents say that there was none. 3. The railways, said in their letter dated 28th November, 2016 there was a concluded contract between the parties by which the appellant was to supply 213000 number of Elastic Rail Clips MK-III to the authority @ Rs. 45.99 per piece, the value of which amounted to Rs. 97,95,870. The railways wanted a security deposit of 10% of the contract value amounting to Rs. 9,79,587/-. What shook up the respondents was that on 3rd January, 2017 the railways threatened them that if they did not make the above security deposit they would realise it from the money payable by the railways to them in other contracts. The respondents contended that there was no contract, hence, there was no question of the railways asking for any security deposit. 4. When a counter offer is made it has the effect of nullifying the offer and substituting it With a new offer. The ball shifts to the Court of the other party to accept it. The respondents' case is that the railways had made counter offers in relation to the offers made by them. The respondents say that as a result of the counter offers made by the railways, it could not be said that they had accepted the offers and that there was a concluded contract between the parties. 5. Let us come to the letter of the respondents dated 2nd August, 2016. It was addressed to the Principal Chief Engineer, Eastern Railway. They offered to sell and deliver to the appellant 22,80,052 numbers of Elastic Rail Clip MK-III. 6. An abbreviated version of the consignee to whom a particular consignment of the goods was to be despatched by road transport was mentioned at the foot of the said letter. According to Mr. Das for the railways each of these consignments offered by the respondents except one was responded with a counter offer. One consignment had been unconditionally accepted. He showed me the letter dated 14th October, 2016 of the appellant. According to Mr. Das for the railways each of these consignments offered by the respondents except one was responded with a counter offer. One consignment had been unconditionally accepted. He showed me the letter dated 14th October, 2016 of the appellant. The railway's case is that the respondent in their letter dated 8th November, 2016 in response to the said letter dated 14th October, 2016 had referred to the document as a letter of acceptance-cum-counter offer. On 23rd November, 2016 respondents wrote to the railways that they were unable to accept their counter offer. The railways maintain that by their letter dated 14th October, 2016, the respondents had accepted their offer against one item of the value of Rs. 97,95,870/-. By their letter dated 28th November, 2016 the appellant asked the respondents to deposit the security money of Rs. 9,79,587/-. 7. According to the respondents even that even with regard to one consignment in their letter dated 14th October, 2016 with regard to which the railways said that there was no counter offer and conclusion of a contract between the parties, there did not exist any contract between the parties. The railways had made a counter offer for all the items. Treating that one item only as the subject matter of a concluded contract on 28th November, 2016, the railways had demanded that security deposit and on 3rd January, 2017, they wrote to the respondents that they were in breach of it for not supplying the goods. By their said letter the railways terminated the contract and demanded penalty from the respondents equivalent to 10% of the contract value, i.e., Rs. 9,79,587/- 8. According to the respondents there could not be a contract in respect of the one item of the letter of offer of the appellant dated 2nd August, 2016. Since, the railways had made a counter offer, it was in relation to the whole offer of the respondents. Thus, there was no concluded contract between the parties. If there was no concluded contract between the parties, there was no question of its breach. Hence, the railways' threat of levy and recovery of penalty by their letter dated 3rd January, 2017 was wrongful and illegal. 9. By the impugned order dated 20th April, 2017 Mr. Justice Basak held that there was no concluded contract between the parties. If there was no concluded contract between the parties, there was no question of its breach. Hence, the railways' threat of levy and recovery of penalty by their letter dated 3rd January, 2017 was wrongful and illegal. 9. By the impugned order dated 20th April, 2017 Mr. Justice Basak held that there was no concluded contract between the parties. Hence, there was no requirement on the part of the respondents to pay the penalty of Rs. 9,79,587/-. The railways were directed to release the said amount within three weeks from the date of communication of this order. We are constrained to observe that the facts as noticed by the learned Judge are not as simple as described in the judgment and order under appeal. The fault is entirely with learned Counsel for not bringing them to his lordship's notice. On the documents presented before the Court, it is not easy to come to the conclusion whether there was a concluded contract or not. The letter of the respondents dated 2nd August, 2016 responded by the appellants by their letter dated 14th October, 2016 would clearly show that the words counter offer have been written in bracket against four consignments against serial number 7, in abbreviated form. A figure is indicated against each entry. There is no remark of counter offer against one entry. The railways say that these four entries related to the first four entries or consignments, also in an abbreviated form in the letter of offer dated 2nd August, 2016 of the respondent. Therefore, there were counter offers with regard to four out of the five items or consignments. There was a concluded contract between the parties with regard to the fifth item. 10. No assistance was provided to the Court to expand and understand the abbreviations or figures against them. No further evidence as produced. Therefore, it was not very safe to come to the conclusion on the basis of this evidence that there was a counter offer with regard to the four items and a concluded contract with regard to the fifth item. It is not prudent should act upon this evidence and come to either of the above conclusions or that there was no concluded contract at all. 11. It is not prudent should act upon this evidence and come to either of the above conclusions or that there was no concluded contract at all. 11. Furthermore, whether there was a concluded contract with regard to one item when several items are involved in one letter of offer or whether acceptance should be composite is also a question to be investigated. 12. The letter of acceptance or counter offer of the railway dated 14th October, 2016 specifically stated that the contract or tender would be governed by the IRS conditions of contract. Now, these conditions of contract clearly provided that if any dispute arose out of the contract or even the tender document the same was referable to arbitration. 13. Section 7 of the Arbitration and Conciliation Act, 1996 makes it explicit that an arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which may arise between them in respect of a defined legal relationship, whether contractual or not. Therefore, even it is assumed that there was no contract between the parties, still whether there was formation of a contract or not and the consequences thereof can be referred to arbitration. If there is a concluded contract between the parties the disputes there under are referable to arbitration. If is not such a contract it is still referable to it for obtaining such a declaration from the learned Arbitrator. 14. We think that the present dispute between the parties can only be resolved by arbitration. We direct the General Manager, Eastern Railways to immediately refer the same to arbitration. We are told that the railways are trying to recover the security deposit by deducting amounts from the bills of the respondent lying with them for payment. 15. At the appellate stage we are referring the parties to arbitration. The Court should have done so long ago. Now, to permit the railways to deduct the amount representing the security deposit from the respondents' bills which have been protected by an interim order of this Court would be harsh on them. They should be given a chance to establish their case in an appropriate forum. 16. For the time being the railways will not deduct Rs. 9,79,587/- or any part thereof from the bill of the respondents. However, this interim order will only be valid till 31st March, 2018. They should be given a chance to establish their case in an appropriate forum. 16. For the time being the railways will not deduct Rs. 9,79,587/- or any part thereof from the bill of the respondents. However, this interim order will only be valid till 31st March, 2018. On or before 31st March, 2018 the respondents have to obtain continuance of this order in a section 17 or section 9 application under the Arbitration and Conciliation Act, 1996 or in the final award to be passed by the learned Arbitrator. We think that this would be just and convenient. 17. The appeal is accordingly disposed of. Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities.