PRADEEP NANDRAJOG, J.

( 1 ) PURSUANT to a notice inviting tender floated by the respondent inviting offers for supply of M. S. Round, petitioner, vide letter dated 6. 6. 1980 submitted its offer. Inter alia, in the offer letter, petitioner stated:- ?ovalidity : Our offer will remain valid upto 30. 6. 1980, thereafter subject to our confirmation. ?

( 2 ) RATES quoted were as under :

( 3 ) RATES quoted were ex-works Nagpur. Sales Tax @ 4% was to be charged extra against Form c .

( 4 ) OFFER was extended upto 10. 1. 1981. Admission to this effect is to be found in petitioner s letter dated 6. 7. 1981 (pages 18-19 of list of documents filed by the petitioner ).

( 5 ) THOUGH tenders were opened on 10. 6. 1980, acceptance was conveyed vide telegraph dated 9. 1. 1981, received by petitioner on 10. 1. 1981. Acceptance required petitioner to deposit Rs. 75,000/- towards security deposit.

( 6 ) PRICES of iron and steel were increased by the Government on 7. 2. 1981 and again on 14. 2. 1981. Petitioner did not furnish the security deposit and wrote to the respondent informing that the Government has increased price of iron and steel and as a consequence, petitioner sought increase in price. Respondent did not agree.

( 7 ) RESPONDENT extended the time for effecting delivery. Petitioner stuck to its guns and demanded higher price. There was exchange of correspondence, details whereof may not be noted as not being relevant for determination of the issue. Respondent terminated the contract vide letter dated 17. 11. 1981 reserving the right to proceed for risk purchase. Following was written :

( 8 ) HAVING purchased the material from the market, respondent claimed to have incurred a loss in the sum of Rs. 11,09,550/ -. It demanded said sum from the petitioner vide letter dated 14. 1. 1983. Petitioner did not reply. Arbitration clause was invoked and vide letter dated 17. 6. 1987, the respondent requested the Director general of Supplies and Disposal to nominate an arbitrator. Dr. B. N. Mani was appointed as an arbitrator. Respondent filed its claim.

( 9 ) PETITIONER filed the present petition invoking Section 5, 11, 12 and 33 of the Arbitration Act,1940 praying :

(A) quash and set aside arbitration proceedings pending on the file of the respondent No. 2 being arbitration case No. 66-B of 1987 holding it is without jurisdiction, without authority of law and consequently bad, illegal and inoperative in the eyes of law.

(B) that the appointment of respondent No. 2 as sole arbitrator in the facts and circumstances of the above case be quashed and set aside and the authority of respondent No. 2, sole arbitrator, in Arbitration Case No. 66-B of 1987 be revoked and/or the arbitrator be removed and the arbitration agreement be superseded.

(C) it be held and declared that the alleged contract giving rise to the arbitration agreement was not a concluded contract nor the terms and conditions thereof include terms to refer the dispute to arbitration and that the arbitration agreement is not in existence as the alleged right to claim damages from the petitioner is barred by limitations, consequently, the appointment of respondent No. 2 and the proceedings unedertake4n by him are without jurisdiction.

( 10 ) PETITION was sought to be amended to urge a point that contract was not signed as per business allocation rules of Govt. of India. Vide order dated 22. 11. 2000 amendment was disallowed.

( 11 ) IT was urged by Mr. N. M. Popli, counsel for the petitioner that there was no concluded contract between the parties for the reason telegram of acceptance required the petitioner to deposit, by way of security, a sum of Rs. 75,000/- and the petitioner having not deposited the same, there was no concluded contract. Second submission made was that immediately after receipt of the telegram from the respondent, petitioner sought increase in price due to increase in price of iron and steel. Respondent did not agree to the increase in prices and, therefore, parties were

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