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Judgment
Abdul Nazeer, J.—In this case, the Petitioner has called in question the validity of the order dated 10.1.2009 passed in O.S. No. 20/2002 by the III Additional Civil Judge (Sr. Dn.) and JMFC, Mangalore D.K. The Petitioner is the Plaintiff in the said suit and the Respondent is the Defendant. For the sake of convenience, the parties are referred to by their respective rankings before the Trial Court.
The Plaintiff filed the above suit against the Defendant for recovery of a sum of Rs. 3,54,500/- with interest at 20% p.a. from the date of the suit till the date of payment. It is the case of the Plaintiff that he intended to install an automatic passenger elevator for his house at Udupi. In that connection, his architect held discussion with the branch manager of the Defendant.-company regarding installation and supply of elevator. The branch manager forwarded a letter dated 22.9.1998 along with the enclosures to the General Power of Attorney Holder of the Plaintiff. Since the terms and conditions specified in the enclosures in the letter were not agreeable, further discussions were held by the Plaintiffs architect with the branch manager of the Defendant. Thereafter the Plaintiff placed an order by addressing the letter dated 25.9.1998 in the light of the discussion held with the branch manager of the Defendant company, reducing into writing the terms and conditions as to the supply, installation, testing and commissioning of one Kone automatic passenger elevator and requested the branch manager of the Defendant company to return a copy of the letter dated 25.09.1998 as a token of acceptance of the terms and conditions specified therein. The branch manager returned a copy of the said letter to the Plaintiff''s architect endorsing ''accepted''. It is further contended that having agreed as above, the parties are governed by the terms and conditions agreed in the letter dated 25.9.1998. Subsequent to the acceptance of the terms and conditions incorporated in the said letter, the Plaintiff paid a sum of Rs. 2,25,000/-being 30% of Rs. 7,50,000/- which represented the cost of supply, installation, testing and commissioning of one Kone automatic passenger elevator. Subsequent to the placing of the order under letter dated 25.9.1998, the Defendant''s Deputy General Manager addressed a letter dated 4.11.1998 intimating the Plaintiff the registration of the his order. After placement of the order as above, site inspection was held by the Defendant. During the site inspection, the representative of the Defendant noticed that it was not possible to get the required pit depth. Therefore, further discussion was held by the branch manager of the Defendant and finally, a decision was taken not to install the elevator. Accordingly, Plaintiff took a decision to cancel the order and informed the branch manager of the Defendant company to return the advance amount to the Plaintiff. However, there was no response to the said letter for some time. The Plaintiff received a letter dated 28.5.1999 signed by the General Manager (Field Operation) of the Defendant stating that on account of the cancellation of the contract, 50% of the contract amount will be deducted from the advance of Rs. 2,25,000/- and they will send the balance of Rs. 1.12,000/- along with a letter confirming the cancellation. The case of the Plaintiff is that there is no specific clause empowering the Defendant to deduct the said amount from the advance. That is why the Plaintiff has filed a suit for the relief referred to above.
The Defendant has filed an application u/s 8 r/w. Section 5 of the Arbitration and Conciliation Act, 1996, (for short ''the Act''), to dismiss the said suit with liberty to the Plaintiff to go before the Arbitrar. In support of the application, the General Manager (Personnel and Administration) of the Defendant company has filed an affidavit contending that as per the general terms and conditions, whenever a contract is cancelled, 50% of the contract value has to be deducted, if the order is cancelled before the general arrangement and drawing is prepared. The said application is opposed by the Plaintiff. After considering the rival contentions of the parties, the Court below has allowed the application reserving liberty to the Plaintiff to move for arbitration. All further proceedings in the suit has been stayed.
Learned Counsel for the Petitioner contends that the Defendant has not produced the original arbitration agreement or duly served copy of the same along with the application. On this ground alone, the application should have been rejected. It is further contended that the agreement referred to by the Plaintiff cannot be considered as an arbitration agreement. There is nothing on record to show that the said document stands accepted and agreed upon by the Plaintiff. It is argued that after the offer made by the Defendant by his letter dated 22.9.1998, the architect of the Plaintiff has accepted the offer through a letter dated 25.9.1998. In the said letter, separate terms and conditions were enumerated. The said letter is signed by the architect of the Plaintiff, the branch manager of the Defendant and thereafter, the power of attorney holder of the Plaintiff has endorsed to that effect. If the intention of the parties was that they have to be governed by the terms and conditions of the letter dated 22.9.1998 and the alleged agreement enclosed with the said letter, separate terms and conditions would not have been mentioned in the letter of acceptance dated 25.9.1998.
Learned Counsel for the Respondent has sought to justify the impugned order. It is contended that the arbitration agreement referred to in the application is referable to Sub-Section 4(b) of Section 7 of the Act. It is contended that the offer made at Annexure-B was enclosed with the arbitration Agreement. The letter signed by the Plaintiff is dated 9.10.1998. A reference has been made to the offer in the letter dated 22.9.1998 which was enclosed with the arbitration agreement. The first paragraph of the letter itself shows that the agreement has been accepted. Having accepted the agreement enclosed along with letter dated 22.9.1998, the Plaintiff now cannot rescind from the contract and maintain the suit because the agreement contains the arbitration clause. The original of the agreement has been produced by the Plaintiff himself. Therefore, production of the said agreement by the Defendant is unnecessary.
I have carefully considered the arguments of the learned Counsel for the parties and perused the materials placed on record.
It is settled that an arbitration agreement may be in the form of arbitration clause in a contract or in the form of a separate agreement and furthermore, an arbitration is considered to be in writing if it contains a document signed by the parties or an exchange of letters, telex, telegram or other means of telecommunication, which provide a record of agreement or an exchange of statements of claim and defence in which existence of the agreement is alleged by one party and not denied by the other. It is dear that inference can be drawn from the letters, telex, telegram and other means of telecommunication, which provides a record of agreement. Sub-Section 4(b) of Section 7 is as under:
Section 7(4)(b): An arbitration agreement is in writing, if it is contained an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement.
In this case, the Defendant had sent a letter dated 22.9.1988 to the Plaintiff along with an arbitration agreement: signed on behalf of the Defendant. In the letter sent by the Plaintiff to the Defendant dated 25.9.1998, reference is made to the letter of the Defendant dated 22.9.1998. The letter dated 25.9.1998 clearly indicates that the order has been placed with reference to the letter dated 22.9.1998. As stated above, the letter dated 22.9.1998 sent by the Defendant to the Plaintiff was enclosed with the agreement which contains an arbitration clause. A combined reading of the letters referred to above would clearly disclose that the Plaintiff has accepted the terms and conditions in the agreement enclosed along with the letter dated 22.9.1998. The said agreement contains an arbitration clause. Therefore, the court below was right in referring the matter to arbitration. It is not in dispute that the Plaintiff has produced the original agreement before the trial court. Therefore, it is not necessary for the Defendant to produce the same. The Trial Court on proper appreciation of the materials on record has allowed the application, which does not call for interference. The writ petition is devoid of merits and it is accordingly dismissed. No costs.