Back
2004(1) Supreme 307
SUPREME COURT OF INDIA
(From Kerala High Court)
V.N. Khare, CJI., S.B. Sinha, J.
Chairman and M.D., N.T.P.C. Ltd -Appellant
versus
M/s. Reshmi Constructions, Builders & Contractors -Respondent
Civil Appeal No. 2754 of 2002
Decided on 5-1-2004
Counsel for the Parties :
For the Appellant : Ramesh P. Bhatt, Sr. Advocate, E.M.S. Anam, Fazlin Anam, Advocates.
For the Respondent : P. Krishnamoorthy, Sr. Advocate, M.T. George and Siby Sebastian, Advocates.
Held : The fact situation in the present case, would lead to the conclusion that the arbitration agreement subsists because:
(i) Disputes as regard final bill arose prior to its acceptance thereof in view the fact that the same was prepared by the respondent but was not agreed upon in its entirety by the appellant herein;
(ii) The appellant has not pleaded that upon submission of the final bill by the respondent herein any negotiation or settlement took place as a result whereof the final bill, as prepared by the appellant, was accepted by the respondent unequivocally and without any reservation therefor;
(iii) The respondent herein immediately after receiving the payment of the final bill, lodged its protest and reiterated its claims.
(iv) Interpretation and/or application of clause 52 of the agreement would constitute a dispute which would fall for consideration of the arbitrator.
(v) The effect of the correspondences between the parties would have to be determined by the arbitrator, particularly as regard the claim of the respondent that the final bill was accepted by it without prejudice.
(vi) The appellant never made out a case that any novation of the contract agreement took place or the the contract agreement was substituted by a new agreement. Only in the event, a case of creation of new agreement is made out the question of challenging the same by the respondent would have arisen.
(vii) The conduct of the appellant would show that on receipt of the notice of the respondent through its advocate dated 21.12.1991 the same was not rejected outright but existence of disputes was accepted and the matter was sought to be referred to the arbitration.
(viii) Only when the clarificatory letter was issued the plea of settlement of final bill was raised.
(ix) The finding of the High Court that a prima facie in the sense that there are triable issues before the Arbitrator so as to invoke the provisions of Section 20 of the Arbitration Act, 1940 cannot be said to be perverse or unreasonable so as to warrant interference in exercise of extraordinary jurisdiction under Article 136 of the Constitution of India.
(x) The jurisdiction of the arbitrator under the 1940 Act although emanates from the reference, it is trite, that in a given situation the arbitrator can determine all questions of law and fact including the construction of the contract agreement. (See Pure Helium India Pvt. Ltd. Vs. Oil and Natural Gas Commission reported in 2003 (8) Scale 553).
(xi) The cases cited by the learned counsel for the appellant [P.K. Ramaiah and Company (supra) and Nathani Steels (supra)] would show that the decisions therein were rendered having regard to the finding of fact that the contract agreement containing the arbitrator clause was substituted by another agreement. Such a question has to be considered and determined in each individual case having regard to the fact situation obtaining therein. (Para 38)
(ii) Word and Phrase-Words without prejudice -Meaning of-Superintendent, Central Excise v. Pratap Rai, (1978) 8 SCC 118 : Relied on. (Paras 34 to 37)
JUDGMENT
V.N. Khare, CJI.-This appeal which arises out of a judgment and order dated 23-11-2001 passed by the High Court of Kerala at Ernakulam revolves round the question as to whether an arbitration clause in a contract agreement survives despite purported satisfaction thereof.
2. The parties to this appeal entered into an agreement for a project at Kayamkulam. Upon completion of the work the respondent herein submitted final bill which was allegedly not accepted by the appellant, whereafter they themselves prepared the final bill and forwarded the same along with a printed format being a "No Demand Certificate". The said "No Demand Certificate" was signed by the respondent herein which is in the following terms:
NO DEMAND CERTIFICATE
Name of package : Earth filling in Temporary Township Part - II
Letter of award : LOA No. KYM/CS/89/ 022/NIT-005/LOA-065 dated 19.3.90
Name of Contractor : Reshmi Construction, T.C. 4/1298, Keston Road, Kowdiar, P.O. Trivandrum-3
1. This is to certify that we have received all payment in full and final settlement of the supplied and services rendered and/or all work performed by us in respect of the above referred LOA/Contract and we have no other claims whatsoever final or otherwise outstanding against NTPC. We further confirm that we shall have no claim/demands in future in respect of this contract of whatsoever nature, final or otherwise."
2. We would now request you to please release our security deposit/contract performance Guarantee."
3. However, on the same day a letter dated 20-12-1990 was written by the respondent to the appellant stating:
"We have completed the aforementioned work in the Kayamkulam Super Thermal Power Project s temporary township area at Nangiarkulangara by the end of November 1990 itself. We had submitted a pre-final bill in November itself but the authorities denied the bill and insisted final bill. But when the alleged final bill was prepared the authorities insisted that a "No Demand Certificate" should be executed by us in favour of the Corporation. They served us with a printed specimen of the document and insisted that it should be typed in our own letterhead and submitted to the N.T.P.C. We refused to submit such a document.
But the authorities of N.T.P.C. threatened that unless and until we execute the said document in favour of the Corporation, the N.T.P.C. would not effect payment of our bill. More than six lakhs of Rupees is pending for payment vide the alleged final bill. We have incurred huge losses in the execution of the work purely due to the latches and lapses of the corporation. More over lakhs and lakhs of rupees has to be paid to our Bankers, creditors suppliers, workers, truck owners etc. etc. Under such a situation we have no other way other than budging to the coercion of the authorities of N.T.P.C. Ltd. to get whatever they give merely for the necessity of our survival. We have to comply with the instructions of authorities of N.T.P.C. Ltd. out of our helplessness in order to receive payment. Hence this letter.
The certificates, undertakings, etc. as aforesaid have been executed without prejudice to our rights and claims whatsoever on account of the alleged final bill.
The money invested in the work comprises loans from the Federal Bank Ltd., private financiers, etc. as well the Firm s own funds. Those additional sums raised by loans have to be paid to the Bank, financiers, etc. hence under duress, coercion and under undue influence we are signing the bill and execute such documents as aforesaid to receive payment. Under such coercive circumstances the alleged final bill cannot be constructed as final bill. We are signing the alleged final bill under coerction, under undue
The main legal point established in the judgment is the binding effect of the settlement between the parties, the waiver of the right to seek re-employment by the workmen, and the entitlement of the ....
A lockout is justified if it is declared in response to an illegal strike or a strike that is in breach of a settlement or award.
The combination of eyewitness testimonies, recovery of the weapon used, and forensic examination results can establish guilt in criminal cases, even based on circumstantial evidence.
The conviction of an accused person under Section 27(3) of the Arms Act is not permissible in law if the accused is also charged with committing murder under Section 302 of the Indian Penal Code.
The court can enhance compensation based on the deceased's income and family dependency, and adjust the multiplier used by the Tribunal if found unjustified.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
