IMPORTANT POINT
Chief Justice or his designate under Section 11 of Arbitration and Conciliation Act exercises purely administrative functions and it is not open to him to discharge any judicial function of adjudicating the dispute even regarding the existence of arbitration agreement.

JUDGMENT

Dharmadhikari, J.-Heard learned counsel appearing for the parties. Leave to appeal, as prayed for, is granted.

2. The appellant Hythro Power Corporation Limited has approached this Court aggrieved by rejection of its application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act" for short). The learned Judge of the Delhi High Court acting as designate or nominee of the Chief Justice, in exercise of his powers under Section 11 of the Act, by his order dated 7.12.2000 came to the conclusion that no agreement in writing having been executed by the parties with an arbitration clause, the prayer made by the appellant for seeking a reference of the disputes raised to arbitral Tribunal has to be rejected.

3. Aggrieved by refusal of the learned Judge of the Delhi High Court to make a reference to the arbitration, the appellant-Corporation filed a Writ Petition in the High Court of Delhi. The Division Bench of the High Court by the impugned order dated 29.8.2001 came to the same conclusion that there exist no written arbitration agreement and hence the dispute between the parties cannot be referred for arbitration under Section 11 of the Act. The appellant-Corporation therefore has approached this Court by seeking leave under Article 136 of the Constitution.

4. The factual background and nature of dispute giving rise to the prayer for arbitration under Section 11 by the appellant-Corporation need examination.

5. The respondent Delhi Transco Limited issued a notice inviting tenders (NIT) for awarding the work of Erection, Testing and Commissioning of balance work of 220 KV DC Tower Line from Samaypur to Mehrauli. The NIT contained clause 25 which is a arbitration clause. Pursuant to the NIT, the appellant submitted its tender. The respondent issued a letter of intent in favour of the appellant. According the appellant, the respondent also sent a detailed letter showing acceptance of the award of the work to the appellant. It was also indicated that all terms and conditions of the NIT would form part of the contract.

6. According to the appellant, the exchange of letters and correspondence between the parties, pursuant to the issuance of NIT and submission of offer by the appellant and its acceptance by the respondent constituted a contract and as the terms and conditions in the NIT, on which the contract was awarded, contained clause 25 providing forum of arbitration, "arbitration agreement" as defined in Section 7(4)(b) of the Act had come into existence to enable the appellant to invoke the said arbitration clause.

7. Learned Senior Counsel appearing for the appellant relies on a three-judge bench decision of this Court in Konkan Railway Corporation Ltd. vs. Mehul Construction Co. [2000(7) SCC 201] and the Constitution Bench Judgment of this Court in Konkan Railway Corporation Ltd. vs. Rani Construction P. Ltd. [2002 (2) SCC 388]. On behalf of the appellant, it is argued that, as has been held by this Court in the cases (supra), the nominee or designate of the Chief Justice, when its power is invoked under Section 11 of the Act, merely exercises administrative functions and, therefore, has no jurisdiction to adjudicate upon the contentious issues between the parties on the existence or the validity of the arbitration Agreement. It is submitted that arbitral tribunal to whom the dispute is referred is alone conferred with jurisdiction to decide the existence or validity of the arbitration agreement as provided in Section 16(1) of the Act.

8. On the facts and background of the dispute briefly indicated above, we find that the designate of the Chief Justice acting administratively under Section 11 and the Division Bench of the High Court exercising powers under Article 226 of the Constitution were clearly in error in adjudicating upon the dispute regarding the validity and existence of the arbitration agreement and holding that the dispute was not referable to arbitration.

9. This C