JUDGMENT

SABYASACHI MUKHARJI, J.— (Minority view):- I have read the judgment proposed to be delivered by L. M. Sharma, J. with which the learned Chief Justice has agreed. With great respect, I am unable to agree with them on the view that there was no arbitration agreement subsisting covering the dispute in question between the parties. It is, therefore, necessary to refer to certain facts, as I view these.

2. This appeal by special leave is directed against the judgment and order of the High Court of Jammu & Kashmir, dated 4th June, 1987. The Jammu & Kashmir Forest Corporation is the appellant. The undisputed facts leading to this appeal are that one Abdul Karim Wani, the respondent No. 1, filed an application for referring certain matters alleged to be in dispute to an independent arbitrator; and that for the last 15 years the respondent had been working as a contractor for the appellant Corporation, namely, Jammu & Kashmir Forest Corpn. and was carrying on various activities in different forest areas in Jammu Province, including felling, machine sawing, pathroo, paccinali, rope span, mahan and transportation.

3. It is stated that in February, 1986 the said Corporation issued tenders for felling, handsawing, pathroo, paccinali and mahan work of timber to be extracted from compartment No. 59 Marwah. In response thereto the petitioner to the original application being the respondent herein, submitted his quotation and offered the lowest rate of 11.74 per cft. and thereby secured the contract. A formal agreement was also executed between the parties. In October, 1987 after about 7 months from the issuance of first work order the appellant Corporation through its General Manager (Extraction) issued a sanction for further quantity of 2 lac cft. sawn volume in compartment No. 59 Marwah, on the same rate, terms and conditions as contained in the original contract. The sanction appears at pages 26 & 28 of the present appeal papers before us.

4. It appears that the total marking carried out in compartment No. 59 was 10,08,000 cft. standing out of which only 6 lac cft. was sanctioned in favour of the respondent. The compartment in question is at a distance of over 70 kms. from the nearest road point and the timber extracted from the compartment had to travel by pathroo, paccinali and mahan through Chenab river for a total distance of 80 kms before it is collected at loading point of Dedpeth.

5. It is further the case of the respondent that "as per the procedure, practice, custom and assurances extended to the respondent by the appellant Corporation through its functionaries, from time to time," the entire marking conducted in a particular compartment for extraction was required (emphasis supplied) to be handed over to the respondent in compartment No. 59. As regards sale, it is suggested that as the compartment is situated in one of the remotest area of Jammu province where making arrangements for extraction of timber including cartage/carriage of foodgrains, saws, tools and implements is very difficult, it was never intended that the balance work remaining in the compartment for extraction would be given to any other contractor.

6. The case of the respondent is that acting upon the assurances and representations of the appellant Corporation that the entire work in the aforesaid compartment would be handed over to him, the respondent had made adequate arrangements after investing Rs. 5 lacs by way of provision for rations, saws, tools and implements etc. All these arrangements at that scale were necessary and were made just to extract entire marked timber from the compartment in question and not just initially tendered quantity. That would have been wholly uneconomical.

7. It was further asserted that there was also the practice in the Corporation that once a compartment was handed over to the contractor for work, it was taken back from him only after the entire available work in the said compartment stood concluded. The contractor further