The central legal point established is that the existence of an arbitration agreement requires a document executed by both parties showing consensus ad-idem, incorporating such a clause.

JUDGMENT :

Rule. Rule made returnable forthwith. Heard finally with the consent of the learned counsel appearing for the rival parties.

(2) By this writ petition, the petitioners (original plaintiffs) have challenged order dated 01/12/2018, passed at Exh.1 and 24 by the Court of 6th Joint Civil Judge, Senior Division, Nagpur (hereinafter referred to as the “trial Court”). Exh.24 was an application filed by the respondents (original defendants) under Section 8 of the Arbitration and Conciliation Act, 1996 (Act of 1996), for referring the matter to arbitration by contending that there was an arbitration agreement between the parties. As a consequence of the said application being allowed, order was passed on Exh.1 on the same date, whereby it was observed that in view of the application at Exh.24 being allowed, the suit itself stood disposed of, with the parties to go for arbitration in terms of the arbitration agreement.

(3) It appears that aggrieved by the said orders, passed by the trial Court, the petitioners filed Regular Civil Appeal No.93 of 2019, before the Court of Principal District Judge, Nagpur. By judgment and order dated 12/02/2021, the said Court dismissed the appeal as untenable. The said judgment and order is also made subject matter of challenge in the present writ petition.

(4) The petitioners filed Special Civil Suit No. 324 of 2017 against the respondents for recovery of a specific amount, claiming that the respondents while executing a contract and constructing a warehouse, had used sub-standard material and that in such circumstances, the petitioners were entitled to specific amount claimed in the said suit.

(5) The respondents filed application under Section 8(1) of the Act of 1996, claiming that there was an arbitration clause/agreement between the parties, if the purchase order/contract dated 16/07/2012, was to be read with proposal dated 26/06/2012, forwarded by the respondents. Reliance was placed on Clause (14) in the proposal, to assert that there was an arbitration clause and that therefore, the suit ought to be disposed of by directing the parties to go for arbitration. The said application was marked as Exh.24. As noted herein above, by the impugned order dated 01/12/2018, the trial Court allowed the application at Exh.24 and consequently passed order on the same date on Exh.1, disposing of the suit, leaving the parties to go to arbitration. The appeal filed against the same failed on the ground of tenability.

(6) Ms. Neelam Biala, learned counsel appearing for the petitioners submitted that a perusal of the documents on record would show that there was no arbitration clause in the concluded contract between the parties. It was submitted that even if there was an arbitration clause in the proposal forwarded by the petitioners on 26/06/2012, when the petitioners communicated their response to the same, by the document dated 12/07/2012, styled as a letter of intent, the proposal was only referred to and the aforesaid document specifically laid down the manner in which the respondents would execute the project for which they were being engaged by the petitioners. It was submitted that this was the only document signed on behalf of both the parties and admittedly the said document did not contain any arbitration clause. Reference was also made to a purchase order dated 16/07/2012, virtually reiterating the clauses and terms and conditions stated in the letter of intent, in pursuance of which, the respondents proceeded to execute the project. On this basis, it was submitted that the trial Court failed to appreciate the true nature of the documents executed between the parties and that in the absence of an arbitration clause/agreement, power under Section 8(1) of the Act of 1996, was erroneously exercised by the trial Court and therefore, the suit was also wrongly disposed of. A feeble attempt was made to claim that the judgment and order passed by the District Court dismissing the appeal as untenable, deser