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2025 Supreme(Cal) 831

IN THE HIGH COURT AT CALCUTTA
SOUMEN SEN, APURBA SINHA RAY, JJ.
Great Eastern Energy Corporation Limited - Appellant
Versus
M/s. D.S. Steel & Anr. – Respondents
FA 23 of 2018
Decided On : 15-09-2025

Advocates Appeared:
For the Appellant: Mr. Aniruddha Chatterjee, Sr. Adv., Mr. Piyush Agarwal, Adv., Mr. Debojyoti Das, Adv.
For the Respondents: Mr. Ajoy Krishna Chatterjee, Sr. Adv., Mr. Anant Kr. Shaw, Adv., Mr. Shreeman Mukherjee, Adv., Ms. Shohini Chakrabarty, Adv., Ms. Prajaaini Das, Adv.

The court affirmed that a contract signed under undue influence or coercion is unenforceable, emphasizing the necessity for clear evidence and valid agreement in cases of settlement.

Headnote:(A) Indian Contract Act, 1872 - Sections 16 and 63 - Money Suit - Dispute regarding payment for work done under contract for well site development - Respondent alleged coercion in signing a receipt for a lesser amount - Court found evidence of due satisfaction on contract work - Judgment affirmed awarding Rs.59,14,685/- with 9% interest from date of suit filing. (Paras 11, 42, 90)

(B) Undue Influence - Definition and burden of proof - Relatives must show circumstances where one party dominated another's will - Coercion or fraud must be specifically pleaded - Defendant's failure to rebut allegations led to judicial conclusions. (Paras 41, 86)

(C) Accord and Satisfaction - Settlement documents must be validated by lawful concurrence of parties - Acceptance of lesser payment argued to be under coercion, negating enforceability of original obligations. (Paras 20, 77)

Table of Content
1. contractual relationship and obligations. (Para 1 , 2 , 3 , 4 , 5)
2. defendant's claims of poor performance and financial settlement. (Para 6 , 7 , 8)
3. challenges to the validity of the settlement and limitations. (Para 9 , 10 , 11 , 12 , 13 , 14)
4. burden of proof on coercion and undue influence. (Para 15 , 16 , 17 , 18 , 19)
5. plaintiff's rebuttal of coercion and evidence of satisfaction. (Para 20 , 21 , 22 , 26 , 27 , 28 , 29 , 30)
6. legal analysis of undue influence and contract validity. (Para 57 , 58 , 59 , 60 , 61 , 62 , 63)
7. presence of essential witnesses and implications of their absence. (Para 64 , 65 , 66 , 67 , 68 , 69 , 70)
8. examination of the circumstances surrounding the agreement. (Para 71 , 72 , 73 , 74 , 75 , 76 , 77)
9. final determination of the judge on undue influence. (Para 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88 , 89)
10. court's dismissal of the appeal and affirmation of the lower court judgment. (Para 90 , 91 , 92)

JUDGMENT :

Soumen Sen, J.

1. The instant appeal arises out of the impugned judgment and decree dated December 22, 2015, passed by the learned Civil Judge (Senior Division), Asansol, in Money Suit No. 33 of 2008 for a sum of Rs.80,13,865/- in favour of the plaintiff-respondent.

2. The defendant-appellant is a Public Limited Company having its registered office in Kolkata, engaged in the business of exploration and production of coal-bed methane gas. The plaintiff-respondent is a sole proprietorship firm having its office in Durgapur with the credentials of doing all sorts of Civil, Mechanical jobs, including road construction.

3. According to the plaintiff-respondent, on November 12, 2005, the defendant issued a work order in favour of the plaintiff for the development of three sites (site nos. 13,14, and 16) in the Burnpur area for the operation of rig drilling of well holes for their methane plant. A concluded contract was entered into between the parties. The total value of the work order was Rs.51,00,000/- inclusive of taxes. The work was to be completed within 90 days from the date of handing over of sites, and any delay beyond that period would attract a penalty @ 0.5% per week, subject to a maximum of 5% of the work order. Additionally, in case of any major repair(s) required on account of substandard work or otherwise, till the 2006 monsoon or November 2006, whichever is later, the defendant-appellant would hold 2.5% work order price, which will be paid after the 2006 monsoon or November 2006, whichever is later. The defendant-appellant had made an advance payment of Rs.5,00,000/- along with the work order for the three wells, while the balance was to be paid within fifteen days of submitting the fortnightly progressive bills, to be adjusted prorate from the progressive bills. Each progressive bill was to be accompanied by a progress report duly signed by the defendant- appellant's site representative. The work order was turnkey in nature, and the progressive payments were to be regulated by 13 specific milestones. Except for the item at serial no. 2, the rate for each of the other 12 work items was fixed and calculated on a lump sum basis. For the work against serial no. 2, it was specified by mentioning that it will be based on actual measurement. There was no whisper in the contract for the provision of extension of the contract to and for any additional sites. Although the nature and size of the three sites were different, the items and rates were the same for all. Several bills were raised by the plaintiff-respondent, being:

A. On 17-01-06, a bill for an amount of Rs.10,87,625.00/- was raised for the development of the site for the well nos. 13 and 14, of which an amount of Rs.9,08,838.00/- only was paid.

B. On 11-02-06, again on 28-02-06 bill for an amount of Rs.15,44,270/- was raised pertaining to the well nos. 13,14, and16, and a part payment of Rs.12,98,269.00/- only was made.

C. Bill dated 18-04-06 was raised for Rs.15,39,550.00/- only of which Rs.

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