Judgment

PALEKAR, J. :- This appeal by special leave arises out of an order dated June 28, 1971 passed by the learned single Judge of the High Court of Calcutta in Matter No. 61 of 1970 (in the ordinary original civil jurisdiction) on an application made by the respondents under Section 33 of the Arbitration Act, 1940.

2. The facts are quite simple. The appellants are Engineers and Contractors with their Head Office in Bombay. They have a factory for the manufacture of pre-stressed and precast products near Delhi. In December, 1968 the appellants received an order for 20,000 prestressed concrete poles from the Haryana State Electricity Board to be supplied in a period of approximately two years. One of the components of the poles is prestressed concrete wire made of steel. The appellant required about 400 metric tons of the said wire for meeting the order. The respondents, who are from Calcutta, are manufacturers of such wires. Their representative in Bombay one Mr. L. M. Uppal learnt that the appellants were in need of wires, and so, on behalf of the respondents he contacted the appellants at Bombay. Negotiations were carried on by Mr. Uppal on behalf of the respondents and after obtaining confirmation from his Head Office at Calcutta Mr. Uppal informed the appellants that the respondents were agreeable to the terms discussed. Thereafter the appellants, by way of confirmation of the terms of the contract agreed upon, wrote a letter to the respondents on 7-5-1969 as per Annexure B. This letter so far as it is relevant is as follows:

"In continuation of the discussions, we hereby confirm that:

We agree to purchase and you have agreed to sell over the next 18/24 months 400 tons of 4 mm and/or 5 mm dia. p.c. wire on the following terms and conditions-

It is not necessary to extract all the terms and conditions here except the one with regard to price. It is as follows:

"The above quantity to be supplied at the firm price of Rs. 2450/- (Rupees two thousand four hundred fifty only) per Mt. FOR Faridabad inclusive of CST. C form shall be issued by us after receipt of invoice.

A special discount of Rs. 50/- per M. T. in the price was also allowed for which it was agreed that a credit note would be issued by the respondents along with the invoice and the bill was to be drawn on the bankers only for the net amount.

3. After recording the terms and conditions, the letter closed with these words:

"Please confirm the acceptance of the above order and despatch one wagon load as already requested personally.

4. After the receipt of the above letter the respondents sent a telegram dated May 10, 1969 informing the appellants that they can despatch one wagon load of 4 mm wire ex-stock and that they would be in a position to send 5 mm wire only after two weeks since the same had to be manufactured. The appellants wrote back on May 13, 1969 telling the respondents that 4 mm wires were of no use for the present and they require only 5 mm wires urgently, for, other wise, their work of manufacturing poles would be held up. So the appellants requested the respondents to arrange for delivery at once of at least one wagon load of 5 mm wires.

5. On May 16, 1969 the respondents wrote a letter to the appellants as per Annexure F . They referred to the appellants letter dated 7-5-1969 and also to the letter dated 13-5-1969 and stated "kindly note that manufacture of 5 mm wires has already been undertaken and we expect to despatch the same within two weeks. Along with the letter Annexure F the respondents sent to the appellants a copy of what is known as the works order also dated 16-5-1969. That is an order to the respondents works unit to supply the agreed quantity of goods. This works order which is Annexure C shows that the manufacturing unit of the respondents had been directed to supply 400 metric tons of wire of 5 mm gauge. Out of this quantity 20 metric tons had to be despatched immediately and for the rest it was stated that despatch inst