M/S. Unissi (India) Pvt. Ltd vs P.G. Institute Of Med. Edn. & Research

4. The brief facts leading to the filing of this appeal may be summarized as under :-

5. Finding no other alternative, the appellant filed an application before the Additional District Court at Chandigarh under Section 11(4) (a) of the Arbitration and Conciliation Act, 1996 (in short, "the Act") for a direction upon the PGI to appoint an Arbitrator. The 4 Additional District Judge, Chandigarh, by the impugned order dated 3rd of August, 2005, held that as there was no agreement executed between the parties, the question of appointing an Arbitrator under the Act could not arise at all. It was held by the learned Addl. District Judge, Chandigarh that since the photocopy of the proposed agreement bears the signature of only the appellant and not that of the PGI, it could not be held that an arbitration agreement was executed between the parties and since there was no signature of the PGI on the said agreement, which was sent after signature of the appellant, remained only as an offer. Therefore, according to the learned Additional District Judge, Chandigarh, in the agreement containing an arbitration clause, it could not be held that the appellant was entitled to ask for appointment of an Arbitrator under Section 11 of the Act. It is this order, which is under challenge in this Court, which on grant of leave, was heard in presence of the 5 learned counsel for the parties.

12. Keeping the aforesaid principles, as quoted hereinabove, in the aforesaid decisions of this Court in kind, in fact what constitutes an arbitration agreement between the parties, we have to examine whether there exists an arbitration agreement between the parties or not in the facts and circumstances of the case. Let us, therefore, consider the gist of the facts involved in this case. A tender enquiry No.2PGI/OGL/2K/6281 dated 21.12.2000 for purchase of Pulse Oxymeters was floated by the PGI. It is an admitted position that the appellant submitted their tender vide their offer No.UIPL/331177/00-01 dated 15.2.2001. The tender of the appellant was accepted by the PGI vide their letter No.PGI/P-61/02/477/11936-51 dated 29.9.2002 for supplying 41 Pulse Oxymeters to their 13 different departments. The tender documents itself contain an arbitration clause and by reason of acceptance of the tender of the appellant by the PGI, it must be held that there was a valid arbitration agreement between the parties. The appellant supplied 41 Pulse Oxymeters and the receipt thereof was duly acknowledged on behalf of the PGI on the delivery challans. The service/installation reports of the aforesaid machines were duly signed on behalf of the PGI. In the letters issued by the PGI, there was an apparent acknowledgement of supply of the aforesaid meters by the appellant and also reference to the aforementioned tender enquiry number. It is an admitted position that the appellant had sent the agreement containing the arbitration clause, as per the format provided by the PGI, after duly signing the same on requisite value of stamp paper for signing of the same by the PGI. The PGI though admittedly received the same, did not send back the agreement to the appellant after signing it as per the agreement 14 between the parties. The PGI admittedly had used the machines for about an year and thereafter returned the same to the appellant. Subsequently, the bank guarantee furnished by the appellant for Rs.2,13,160/- and the earnest money deposit of Rs.45,000/- was encashed and forfeited by the PGI. In view of the aforesaid facts and the correspondences between the parties, particularly the tender offer made by the appellant dated 15.1.2001 and supply order of the PGI dated 29.9.2002, and, in our view, to constitute an arbitration agreement between the parties and the action taken on behalf of the appellant and in view of Section 7 of the Act and considering the principles laid down by the aforesaid two decisions of this Court, as noted herein earlier, we are of the view that the arbitration agreement did exist and therefore the matter should be referred to an Arbitrator for decision. That apart, as we have already noted herein earlier that in this case, the documents on 15 record, in our view, apparently show supply of materials by the appellant and acceptance thereof by the PGI in pursuance of the tender enquiry by the PGI, wherein tender of the appellant containing an arbitration clause was admittedly accepted by the respondent. In that view of the matter, it cannot be said that the PGI should now be allowed to wriggle out from the arbitration agreement between them.

13. We may reiterate that in this case admittedly the documents which are on record apparently show supply of the material by the appellant to the PGI and acceptance thereof by the PGI in pursuance of the tender enquiry by them wherein tender of the appellant containing the arbitration clause was admittedly accepted by the PGI. Accordingly, we hold that arbitration agreement did exist and, therefore, dispute between the parties would be referred to an Arbitrator for decision.

14. Therefore, considering the above aspects of the matter in this case, we must come to this conclusion 16 that although no formal agreement was executed, the tender documents indicating certain conditions of contract contained an arbitration clause. It is also an admitted position that the appellant gave his tender offer which was accepted and the appellant acted upon it. Accordingly, we are of the view that the learned Additional District Judge, Chandigarh erred in holding that their did not exist any arbitration agreement between the parties and, therefore, the order passed by him is liable to be set aside.

15. For the reasons aforesaid, the impugned order is set aside and the appeal is allowed. We now direct that the matter may be placed before the Hon'ble Chief Justice of the High Court of Chandigarh to appoint an Arbitrator in accordance with law to resolve the dispute between the parties. The appeal is thus allowed. There will be no order as to costs.