2021 3 1501 51567 Judgement 19-Mar-2024
2021 3 1501 51567 Judgement 19-Mar-2024
2021 3 1501 51567 Judgement 19-Mar-2024
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.___________OF 2024
[Arising out of Special Leave Petition (Civil) Nos.7573-7574 of
2021]
VERSUS
ZILLION INFRAPROJECTS PVT.LTD. ...RESPONDENT (S)
JUDGMENT
B.R. GAVAI, J.
1. Leave granted.
March 2021 and final judgment & order dated 9th April 2021,
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of 2021, whereby the High Court allowed the application under
to the present lis, arising from the Letter of Intent dated 4th
December 2006.
follows:
infrastructure sector.
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3.3 The appellant issued an invitation for tender, being NIT No.
“Tender Documents”).
the parties to the present lis & as a result, the respondent issued
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arbitration and further seeking consent of the appellant for the
Arbitrator.
3.8 Vide interim order dated 12th March 2021, the High Court
3.9 Vide final judgment & order dated 9th April 2021, the High
challenging both the interim order and the final judgement &
order.
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3.11 This Court vide order dated 23rd July, 2021, issued notice
appearing for the appellant submits that the High Court has
Intent dated 4th December 2006 (“L.O.I.” for short) though states
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for execution of works and they shall form part of the agreement.
Clause 10.0 also states that the L.O.I. shall also form a part of
from Clause 7.0 of the L.O.I., which states that the redressal of
states that the laws applicable to the contract between the parties
the L.O.I. would not make the lis between the parties amenable
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Limited vs. Som Datt Builders Limited1, he submits that
the Court in the City of Kolkata only, whereas in the L.O.I. the
the Delhi High Court has rightly considered this aspect and as
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(2009) 7 SCC 696
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8. Sub-section (5) of Section 7 of the Arbitration Act reads
thus:
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(1) the contract should contain a
clear reference to the documents
containing arbitration clause,
(2) the reference to the other
document should clearly indicate an
intention to incorporate the
arbitration clause into the contract,
(3) the arbitration clause should be
appropriate, that is capable of
application in respect of disputes
under the contract and should not be
repugnant to any term of the contract.
(ii) When the parties enter into a
contract, making a general reference to
another contract, such general reference
would not have the effect of incorporating
the arbitration clause from the referred
document into the contract between the
parties. The arbitration clause from
another contract can be incorporated
into the contract (where such reference is
made), only by a specific reference to
arbitration clause.
(iii) Where a contract between the
parties provides that the execution or
performance of that contract shall be in
terms of another contract (which
contains the terms and conditions
relating to performance and a provision
for settlement of disputes by arbitration),
then, the terms of the referred contract
in regard to execution/performance
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alone will apply, and not the arbitration
agreement in the referred contract,
unless there is special reference to the
arbitration clause also.
(iv) Where the contract provides that
the standard form of terms and
conditions of an independent trade or
professional institution (as for example
the standard terms and conditions of a
trade association or architects
association) will bind them or apply to
the contract, such standard form of
terms and conditions including any
provision for arbitration in such
standard terms and conditions, shall be
deemed to be incorporated by reference.
Sometimes the contract may also say
that the parties are familiar with those
terms and conditions or that the parties
have read and understood the said terms
and conditions.
(v) Where the contract between the
parties stipulates that the conditions of
contract of one of the parties to the
contract shall form a part of their
contract (as for example the general
conditions of contract of the Government
where the Government is a party), the
arbitration clause forming part of such
general conditions of contract will apply
to the contract between the parties.”
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10. It could thus be seen that this Court has held that when the
document into the contract between the parties. It has been held
been held that where a contract between the parties provides that
11. This Court further held that where the contract provides
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trade or professional institution will bind them or apply to the
has been held that sometimes the contract may also say that the
parties are familiar with those terms and conditions or that the
parties have read and understood the said terms and conditions.
It has also been held that where the contract between the parties
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13. It is thus clear that a reference to the document in the
contract.
14. The law laid down in the case of M.R. Engineers and
15. No doubt that this Court in the case of Inox Wind Limited
(supra). In the said case (i.e. Inox Wind Limited), this Court has
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sufficient for incorporation of an arbitration clause in the later
the case of Inox Wind Limited (supra) agrees with the judgment
arbitration clause. In the said case (i.e. Inox Wind Limited), this
Court found that the purchase order was issued by the appellant
letter had confirmed its acceptance. This Court found that the
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16. The present case is a ‘two-contract’ case and not a ‘single-
contract’ case.
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All suits arising out of this enquiry and
subsequent purchase order, if any, are
subject jurisdiction of court in the City of
Kolkata only and no other door when
resolution/settlement through mutual
discussion and arbitration fails.”
19. It will also be apposite to refer to Clauses 1.0, 2.0, 7.0 and
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2.0 All terms and conditions as contained
in the tender issued by DVC to NBCC
shall apply mutatis mutandis except
where these have been expressly
modified by NBCC.
also form part of the agreement. In view of Clause 2.0, all terms
the NBCC shall apply mutatis mutandis except where these have
provides that the redressal of dispute between the NBCC and the
of Delhi alone. Clause 10.0 further provides that the L.O.I. shall
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21. It is thus clear that the intention between the parties is very
clear. Clause 7.0 of the L.O.I. which also forms part of the
between the NBCC and the respondent shall only be through civil
that Clause 7.0 of the L.O.I. specifically uses the word “only”
Delhi alone”.
the first contract, the arbitration clause would not ipso facto be
mention/reference thereto.
23. We are of the considered view that the present case is not a
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redressal of the dispute between the NBCC and the respondent
Delhi alone.
24. In that view of the matter, we find that the learned single
allowed. The impugned orders are quashed and set aside. There
…….........................J.
[B.R. GAVAI]
…….........................J.
[SANDEEP MEHTA]
NEW DELHI;
MARCH 19, 2024
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