CAV JUDGMENT

(PER: HON'BLE MR JUSTICE G BASAVARAJA)

1. This appeal is preferred challenging the order dated

18th March, 2024 passed in Com.OS No.863 of 2023, by the learned LXXXVII Additional City Civil Judge, Commercial Court, Bengaluru.

2. Brief facts of the case are that the appellant is a Company incorporated under the Companies Act 1956, having its registered office at Mumbai and branch office at Bangalore. The appellant is engaged in the business of manufacturing Elevators, Escalators and Moving-walks, etc. The respondent is a partnership firm Engaged in the business of development of residential buildings, apartments, etc. Respondent being satisfied with the benchmark reputation, brand, and excellence of the products manufactured by the appellant, approached the appellant for purchase of Elevators. Upon initial discussion, the appellant provided a detailed offer for supply and installation of 10 elevators pairing model number Schindler-3000 on the terms and conditions mentioned in the offer letter dated 23rd November, 2021. Accepting the said offer letter, the respondent further executed the contract dated 24th November 2021 with the Appellant. Therefore, the letter of offer dated 23rd November, 2021 has been duly accepted by the respondent in its entirety without any reservations. Further, it is submitted that pursuant to issue of the offer letter and contract, the respondent made payment of Rs.20,70,000/- which is 10% of the contract value as advance, which was duly acknowledged by the opponent. Further 40% of the contract value was required to be made by the respondent before commencing manufacturing and within the price validity period mentioned in the offer letter dated 23rd November, 2021. However, the respondent failed to make the requisite payment within the time mentioned therein. Further, it is submitted that since there was a price variation due to increase in raw materials and such other aspects, the appellant communicated the same by way of e-mail to the respondent regarding escalation of price. However, the respondent did not accept the said price. The respondent has suppressed its default and had filed suit in Com.OS No.863 of 2023 in order to harass the appellant claiming refund of Rs.20,70,000/- with interest at 18% amounting to Rs.5,89,950/- and other reliefs. It is submitted that Clause 20 of offer letter dated 23rd November 2021, provide for resolution of disputes and controversies amicably through mediation. However, if the dispute is not resolved in such manner, the clause stipulates that it should be referred to a Sole Arbitrator appointed as per legal process in accordance with Arbitration and Conciliation Act, 1996. It is contended that the commercial court lack jurisdiction in view of aforementioned clause and as such an application came to be filed by the appellant under Section 8 of the Arbitration and Conciliation Act 1996, seeking to refer the parties to the arbitration in terms of the arbitration clause. The respondent filed statement of objections seeking to dismiss the Application. The commercial court, vide order dated 18th May 2024, dismissed the Application filed by the appellant under section 8 of the Act. Assailing the said order, the appellant has preferred the present appeal.

3. Sri Sunil P.P, learned counsel appearing for the appellant submits that the impugned order dated 18th May 2024 passed by the commercial court is illegal, arbitrary, erroneous, and contrary to law and facts. It is submitted that the commercial court has committed an error in treating the contract dated 24th November 2021 is an independent contract, though the same was required to be read in tandem with the order dated 23rd November 2021, and hence the impugned order is unjust and perverse. He submitted that the commercial court failed to appreciate that the contract dated 24th November 2021 explicitly refer to offer letter dated 23rd November 2021, and the specifications of the elevators provided in the offer