Explicit pleading and allegations of absence of consent, coercion, or fraud are essential to challenge the validity of a full and final settlement letter and render it non-enforceable.

( 1 ) IN the present case the Petitioner had, on 25/03/1994 issued a letter to the Respondent stating the receipt of a cheque No. 173639 for Rs. 1,41,696. 00 would be towards full and final payment of dues in respect of the said construction. Even there after the present petition under Section 20 of the Arbitration Act has been filed. On a reading of the petition, it is at once clear that the Petitioner has altogether failed to deal with the circumstances in which the letter dated 25/03/1994 was issued knowing that it had issued such a letter, it was essential that the question addressed explicitly. All that has been stated is that it "seems" that some discrepancy in the account exists. In my opinion due significance and sanctity must be given to letters where full and final satisfaction is recorded. Learned counsel for the Petitioner submits that it is well settled that the issuance of a letter such as that dated 25/03/1994 does not bar the party to seek initiation of arbitration. However, in this case there must be a categorical pleading in the petition itself that the letter was extracted from the petitioner under circumstances which would disclose that his free consent was absent as mentioned, the pleadings do not set up such a case. It would, therefore, not be appropriate for the petitioner to rely on decision stating that the issue whether there was free consent at the time of the issuance of a full and final certificate was an arbitrable dispute. Learned counsel for the Petitioner has relied on Union of India v. M/s. Ajit mehta and Associates, Pune and Others, AIR 1990 Bombay 45. The Hon ble Division bench had discussed all the precedents and delivered a detailed and erudite judgement, which demands to be read. Hence I shall do no more than reproduce the ratio set down and suggest that the decision be read with care.

"thus the authorities discussed above can be said to lay down the law that in spite of full and final settlement of the claim, the arbitration clause in the contract may subsist where the party invoking it alleges that in fact there was no accord and satisfaction for some reasons such as the final bill was submitted or receipt was given under coercion, mistake or misrepresentation, without prejudice, under protest etc. For then that itself becomes a dispute arbitrable under the clause. However, when there is no such allegation made when invoking the arbitration clause, and it is invoked simpliciter, it will have to be held that the contract itself had come to an end with it the arbitration clause which is a part and parcel of it. We have come across no decision which has taken a contrary view. On the other hand, the decisions discussed above support our conclusion. "

( 2 ) LEARNED counsel for the Petitioner has ignored the sentence underlined by me which sets down the rider and exception to the general proposition that whether there has been a full and final settlement or accord is an arbitrable dispute. It should have been explained in the plaint in detail why the full and final certification is not enforceable i. e. for absence of consent, or presence of coercion and fraud of the Respondent. If the arbitration clause has been invoked simpliciter, as has evidently been done in the present case, it will have to be held that the contract itself had come to an end and with it the Arbitration Clause which was a part and parcel of it. The accord/satisfaction is not bereft of legal efficacy. Learned counsel for the Petitioner has thereafter relied on a Division Bench judgement of this Court in Ms. Navbharat Dal Mills v. Food Corporation of India and another, AIR 1993 Delhi 87, in which it was held that it was not for the court to decide whether there was accord or satisfaction between the parties or not and that this should be referred to the Arbitrator to determine. I am unable to agree that this observation would apply even in those cases where a letter of full and final accord has been exchanged