IMPORTANT POINT
Existence of an arbitration agreement can be identified from the documents/ correspondence between the parties as also from their subsequent conduct.

Judgment

Tarun Chatterjee, J. —

1.Delay in filing this special leave petition is condoned.

2.Leave granted.

3.This appeal is directed against the Judgment and Order dated 3rd of August, 2005 in Arbitration Case No. 45 of 2004 passed by the Additional District Judge, Chandigarh, dismissing the application filed by the appellant for appointment of an Arbitrator on the ground that no Arbitration Clause was in existence between the parties.

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

A tender was floated by the Post Graduate Institute of Medical Education and Research (in short, “the PGI”) on 21st of December, 2000 for the purchase of Pulse Oxymeters, the format of which contained an arbitration clause. The appellant gave an offer for the tender on 15th of January, 2001, which was accepted by the PGI. Purchase Orders were placed and in compliance with the said Order, the appellant had supplied equipments. The delivery of equipments was also accepted by the PGI and the machineries were installed. The PGI demanded the execution of an agreement containing an arbitration clause on a non-judicial stamp paper duly signed. The appellant signed the agreement and sent it to the PGI but the signature of the authorities of the PGI was never acquired. It is true that although the appellant duly signed the agreement and sent it to PGI but the signature on the agreement had never reached the appellants. According to the appellant, an agreement containing an arbitration clause was executed between the parties. No payment was made by the PGI against delivery of goods worth Rs. 22,16,853.60 though the equipments were installed and put in use. The PGI, on the other hand, however, forfeited the earnest money of Rs.2,12,160/-, which was encashed by them. Eventually, the PGI got the equipments lifted and it was found by the appellant that the equipments had been mis-handled and were no longer fit to be used/resold in the market. A notice was served on behalf of the appellant of the matter to the PGI but no reply was received. It was the case of the PGI that no agreement was executed. The appellant was alleged to have committed fraud on the PGI by representing themselves of being the manufacturers of the equipments, which were in fact, according to the PGI, were imported from Korea. A Technical Committee of the PGI on 14th of January, 2003, however, did not approve the purchase and installation of the equipments and thus, by a letter issued in the year 2003, the appellant was informed that the tender was rejected. According to the PGI, the supply, not being in accordance with the specification, was rejected after use and the appellant was debarred from dealing with the PGI for the next two years. Therefore, it was alleged by the PGI that no arbitration agreement was executed between the parties and, therefore, question of appointing an Arbitrator in the present case could not arise at all.

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 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