( 1 ) THIS is a petition under section 33 of the Arbitration Act. The petitioner has challenged the existence of any contract between the parties and therefore the case of the petitioner is that when there is no agreement between the parties, there could be no arbitration clause and the arbitration proceedings before Shri M. A. Cherian, Executive Director, Mechanical Engineering, Railway Board, Ministry of Railways, Union of India or any other nominee who may be nominated by the respondents are uncalled for.

( 2 ) THE petitioner company is engaged in the business of manufacture and distribution of various types of steel and processed steel products including steel ingots, steel billet springs, steel rounds and allied steel products. The petitioner company is aregular supplier of some of the items manufactured by it to the Railways under various contracts. Regarding the transaction forming subject matter of the present petition, it is case of the petitioner company that no concluded contract came into existence between the parties and, therefore, the reference to arbitration of certain claims of the respondent on account of risk purchase alleged to have been made by the respondent is uncalled for. The necessary facts in this connection are as under.

( 3 ) BY a letter dated 20th September 1984, the petitioner offered to supply certain material to the respondents. The material clause in the letter of offer is the clause regarding price. It is stated there:-

"price VARIATION: Rates quoted are based as per JPC announcement No. 262, dated 21. 6. 84 of IS:226. Any increase in Price as per JPC/sail stockyard price, after the date of execution of the order will be borne by the purchaser. "

( 4 ) THE respondent replied vide its letter dated 29th November 1984 by making a counter offer in which the price variation clause was different than the clause referred to hereinbefore which was contained in the petitioner s letter of offer. This was followed by respondent s letter dated 6th December 1984 in which the respondent signified its acceptance of petitioner s offer to the extent of quantities, specifications and prices shown inpara 6 of the letter dated 6th December 1984. The main controversy in the present petition is regarding prices, therefore, I will make a reference only to the price clause contained in this letter. This reads as under:-

"the prices are FOR Raipur/nagpur despatching station and inclusive of excise duty of Rs. 220. 00 per tonne and sales-tax will becharged extra. Any variation in the tax or duties on finished products or raw materials shall be to the buyer s account. The prices are based on the base price of Steel billets to Specification IS-2830 as announced by JPC/steel Plant/any other authority nominated by the government as on 21st September 1984. Any upward or downward variation in the JPC/steel Plant/any other authority nominated by the Government base price of billets per tonne, subsequent to the date of your offer till the expiry of contracted delivery period shall have effect on the contract price of stores by the same amount, for material put up for inspection fifteen days after the date of any variation in the prices of Billets. "

( 5 ) THE petitioner referred to the above letter vide its letter dated 22nd December 1984. On the question of pricthe petitioner reiterated its position about the price variation clause contained in its original letter of offer. The main point of difference between the parties appears to be that whereas the petitioner pegged its price to the price of IS 226 of the JPC dated 21. 6. 1984, the respondent was basing the price on IS 2830 of the JPC dated 20th February 1985. The petitioner has clearly stated in its letter dated 22nd December 1984 that "as such justification of fixing the price as per IS 2830 is not acceptable to us and you are requested to kindly make the basis as IS 226 JPC/sail Stockyard price to claim price variation". It was further reiterated "our offer