IMPORTANT POINT
The main legal point established in the judgment is that for the incorporation of an arbitration clause from another document, there must be a clear intention of the parties to incorporate the clause in the contract. A specific reference is required for incorporation in a two-contract case, while a general reference is sufficient for incorporation in a single-contract case.

JUDGMENT

Amit Bansal, J. - The present appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) by the appellant challenging the impugned order dated 7th November, 2023 passed by the District Judge (Commercial Court)-03, South, Saket Delhi (hereinafter referred to as Commercial Court), dismissing the application filed by the appellant/defendant under Section 8 of the Act in a suit for recovery filed by the respondent/plaintiff.

2. Briefly, the facts relevant for deciding the present appeal are as follows:

2.1 The Delhi Metro Rail Corporation (hereinafter referred to as DMRC) floated a tender for supply, re-location, installation, testing, commissioning and handing over of electrical, firefighting, hot water solar system works and relocation of Chimney and External Fire Ring Main Works (hereinafter referred to as electrical work) to be carried out at Nurses and Interns Hostel at ILBS situated at D-1, Vasant Kunj, New Delhi.

2.2 The DMRC awarded the contract for the aforesaid electrical work to the appellant.

2.3 The respondent approached the appellant showing his interest in doing the said electrical work and submitted the quotation. Thereafter, the appellant allotted the said work to the respondent and a work order bearing no. MAC:DMRC-WO:2010-11:2071 dated 6th July, 2010 (hereinafter referred to as work order) was signed and executed between the parties. The said work order constitutes an agreement between the appellant and the respondent.

2.4 In terms of the aforesaid work order, the total cost of the work was agreed at Rs. 2,37,30,568/- after the rebate @ 13.5% and the said work was to be completed within 12 months.

3. It is the case of the appellant that the respondent failed to complete the aforesaid work on time.

4. On the other hand, the respondent contends that the work got delayed as the appellant did not perform its obligations on time. The respondent further states that due to the conduct of the appellant, the respondent also suffered losses. On 30th November, 2014, the respondent completed the work to the satisfaction of the appellant and the DMRC. However, the appellant failed to clear the bills of the respondent, which led to filing of the suit of recovery for a sum of Rs. 53,01,812/-.

5. The appellant appeared in the said suit and filed an application under Section 8 of the Act to refer the dispute between the parties to arbitration. The respondent contested the said application by filing a reply thereto. The said application was dismissed vide the impugned order holding that there is no valid and binding arbitration agreement between the parties within the meaning of Section 7 of the Act and therefore, Section 8 of the Act is not applicable to the facts of the present case.

6. Impugning the aforesaid order, the present appeal has been filed by the appellant.

7. Counsel for the appellant submits that in terms of Clause 9 of the work order, the various clauses in the agreement between the appellant and the DMRC were incorporated in the contract between the appellant and the respondent. It is further submitted that the General Conditions of Contract (hereinafter referred to as GCC) issued by DMRC contained an arbitration clause in Clause 85, which would also apply to the agreement between the appellant and the respondent.

8. In support of his submissions, counsel for the appellant has placed reliance on the judgments of the Supreme Court in Inox Wind Limited v. Thermocables Limited, (2018) 2 SCC 519 and Giriraj Garg v. Coal India Ltd& Ors., (2019) 2 SCC 192.

9. It is to be noted that both the aforesaid judgments were cited by the appellant before the Commercial Court, but were distinguished by the Commercial Court.

10. Per contra, counsel for the respondent submits that the respondent was not a party to the contract between the appellant and DMRC and therefore, cannot be subjected to the terms of the said contract. He defends the impugned order passed by the Com