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
| 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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AI
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.
A bald plea of fraud, coercion, duress, or undue influence is not enough to undo settlement agreements.
Claims raised after acceptance of payments are considered waived if not disputed timely, and allegations of coercion were deemed unfounded by the arbitrator.
A party cannot challenge a settlement agreement on grounds of coercion unless substantial evidence proves it was signed involuntarily; arbitration awards remain binding unless set aside by due legal ....
The main legal point established in the judgment is that false allegations of coercion and duress, along with the suppression of a Settlement Agreement, can demonstrate a clear case of accord and sat....
The issue of coercion and undue influence in the execution of a settlement agreement is an arbitrable dispute that should be referred to arbitration.
A Settlement Agreement is enforceable unless proven voidable due to duress or undue influence, with the burden of proof on the party alleging such claims.
The court established that contracts signed under economic duress are void, emphasizing the importance of equal bargaining power in contractual agreements.
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