LexJ.K JAIN AND ORS. versus DELHI DEVELOPMENT AUTHORITY AND ORS.
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A J.K JAIN AND ORS. v. DELHI DEVELOPMENT AUTHORITY AND ORS. SEPTEMBER 26, 1995 B [N.P. SINGH AND FAIZAN UDDIN, JJ.[ Arbitration Act, 1940: S.2 (aj-Arbitration agreement-Tender documents submitted by Sup- C plier-Clause 14 of the tender fo1111 provided for an Arbitration-Held, it should be deemed as p01t of agreement as the pmties had agreed in the main agreen1ent that the tenns and conditions contained in tlze tender /01111 shall be binding between them. The Respondent issued a notice inviting tenders for supply of steel D bars of various diameters to the extent of 20,000 Metric Tonnes. The appellants obtained a tender form and submitted their offer. After negotia- tions, the tender was accepted for supply of only 10,000 Metric Tonnes of steel bars of various diameters, and a formal agreement was executed. Due to some disputes between the parties, the respondent rescinded and an- E nulled the contract for the balance quantity to be supplied. The. Engineer Member of the respondent-authority, in exercise of powers under clause 14 of the agreement, appointed an Arbitrator. Appellants filed a petition before the High Court challenging the appointment of Arbitrator, and it was dismissed by a Single Judge. On F appeal, Division Bench reversed that order. In appeal to this Court, it was contended that clause 14 should not be deemed to be a part of the agreement, since it was only part of the tender form issued to every contractor intending to supply materials to the respondent; that it just contained general rules for the guidance of the G contractors; that the expression 'Tender Form' mentioned in the agree- ment did not refer to the form relating to 'tender and contract for supply of materials' which contained an arbitration clause. Dismissing the appeal, this Court H HELD : l.l. Section 2(a) of the Arbitration Act defines 'arbitration 72 JK JAIN v. DD.A. 73 agreement' to mean a written agreement to submit present or future A difl'erences to arbitration, whether an arbitrator is na1ned therein or not. But \\'hen Section 2(a) \Yhile defining 'arbitration agreement' speaks about a "Titten agreement to submit present or future difl"erences to the arbitra- tion, it is not necessary that it should also be signed by the parties like any formal agreement relating to a contract. [77-H, 78-A) 1.2. Jn the instant case, the arbitration clause has not been included B in the agreement itself. But it shall be deemed to be part of the agreement because the agreement specifically says that the terms and conditions contained in the tender form shall be binding between the parties which obviously will include clause 14 or the tender form, according to which any C dispute between the parties has to be referred to an arbitration. [79-B] 1.3. The other special feature of the present case is that each page of the tender form which forms part of the agreement has been signed by the appellant, on behalf of the firm and the Executive Engineer on behalf D of the respondent. A mere denial of the existence of the contract of arbitration by one party does not denude the arbitrator of jurisdiction. The Arbitrator gets jurisdiction to decide the disputes on basis of the agreement to refer such disputes and not by its acceptance or denial. The objection on behalf of the appellants, that there was no condition in the main agreement to refer the disputes to arbitration can be accepted only E if it is held that the different terms and conditions mentioned in the tender form are not binding on the parties, because parties never agreed to those terms and conditions, while entering into a contract. But the fact about which there is no dispute, is that both the parties had signed the tender form in token of having accepted the terms and conditions mentioned F therein including about reference of disputes, if any, to an arbitrator. They had also agreed in the main agreement, that the terms and conditions cont~ined in the tender form shall be binding between the parties. In this background, it is difficult to comprehend that the appellants had never agreed to refer any dispute arising between the parties to an Arbitrator in terms of Clause 14 of the tender form. [79-C-F] G fugal Kislwre RameslJWar Das v. Ms. Goo/bai Honnusji, AIR (1955) SC 812 = [1955] 2 SCR 857; Banarsi Das v. Cane Commissione1; AIR (1963) SC 1417= [1963] 2 SCR 760 and Union of India v.A.L. Ral/ia Ram, AIR (1963) SC 1685 =
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