(1) LEAVE granted. Heard learned counsel.

(2) THE respondent M/s Nav Bharat Builders entered into an agreement on 24/7/1978 to construct masonry dam across river Ghod in Ambegaon District of State of Maharashtra. The period for completion of the contract was 72 calendar months from 24/7/1978, but was extended from time to time. In its execution, there arose a dispute relating to labour escalation charges and other items of dispute. The respondent had given notice for reference to an arbitration. Since the appellant did not agree either for the enhancement as claimed for or for reference to the arbitration, the respondent laid the suit under Section 20 of the Arbitration Act, 1940 for filing the agreement so as to refer the dispute to the arbitrator. Pending suit, he submitted a letter to the government on 8/9/1986 and pursuant to this and further correspondence the government constituted a sub-committee to go into the question of labour escalation claimed by the respondent. The sub-committee in its report had submitted to the government for acceptance of the claim of the respondent subject to the terms mentioned in paragraph 8.0 of its report. Pursuant thereto, when it was addressed to the respondent, the respondent in his letter dated 3/3/1989 had agreed to receive the amount of the price escalation on account of labour component worked out by the committee, staling that:

"I further agree to accept the payment as decided by the government till completion of the work."

THEREAFTER, the recommended amount was tendered to the respondent and he had accepted the payment in his letter dated 7/5/1990 thus:

"IN continuation of our above letter as instructed by you we will withdraw from our special suit No. 134, claim in respect of labour escalation."

THEREAFTER, the respondent had disputed the correctness of the amount quantified contending that it was obtained by coercion and therefore, he is not bound by it. When an objection was raised, the trial Judge accepted the same. On appeal, the High court held that it is an arbitrable dispute and arbitrator would decide the same. Accordingly, the claim of the government was negatived by its order dated 5/3/1993. Thus this appeal by special leave.

(3) THIS court in P.K. Ramaiah & Co. v. Chairman and Managing Director, NTPC considered the ambit of accord and satisfaction by the parties voluntarily entered into and disputation raised thereunder. This court after considering the entire controversy held that:

"ADMITTEDLY the full and final satisfaction was acknowledged by a receipt in writing and the amount was received unconditionally. Thus there is accord and satisfaction by final settlement of the claims. The subsequent allegation of coercion is an afterthought and a devise to get over the settlement of the dispute, acceptance of the payment and receipt voluntarily given.... Having acknowledged the settlement and also accepted measurements and having received the amount in full and final settlement of the claim, there is accord and satisfaction. There is no existing arbitrable dispute for reference to the arbitration."

THEREIN similar to the facts in this case the appellant admittedly accepted the amount in full and final settlement and given the receipt. Later it disputed, its correctness on the ground that it was obtained by coercion. When proceedings were laid for reference to arbitration the trial court upheld the contention and referred the matter for arbitration. On appeal, the High court set aside the order, When the appeal was filed in this court, this court concluded in the above findings and upheld that there was no arbitrable dispute.

(4) IT is seen that as regards the escalation of labour claims are concerned, the report of the sub-committee constituted by the government expressly mentioned in paragraph 8 thus:

"THIS decision is also subject to the following conditions:

(I) The contractor shall furnish to government a letter