The main legal point established in the judgment is the validity and effect of a No Claim Certificate issued under economic coercion and financial duress, and its impact on the discharge of the Agreement by accord and satisfaction.

VIBHU BAKHRU, J.

1. M/s. ANS Constructions Ltd. (hereafter 'ACL') has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') impugning an arbitral award dated 07.10.2015 (hereafter 'the impugned award') published by the Sole Arbitrator.

2. By the impugned award, the Sole Arbitrator has rejected all the claims made by ACL in view of the No Claim Certificate issued by ACL on 09.12.2011. ACL claims that the said No Claim Certificate was drafted by the respondent and ACL was constrained to issue the same under "economic coersion and financial duress to receive the payments admittedly due and payable to us”. It is contended that the respondent had withheld the amounts admittedly due to ACL and had declined to release the same until ACL issued such a certificate. ACL claims that it was under severe economic pressure and had no option but to issue the No Claim Certificate for release of its claims.

3. Briefly stated, the relevant facts necessary to address the controversy are as under :-

3.1 On 12.04.2005, the respondent invited tenders for the landscape works at Little Binaga Bay and Shankrubagh at Naval Base for Project Seabird at Karwar (Package: A2).

3.2 ACL's bid for the aforesaid works was accepted and the respondent issued a Letter of Acceptance on 12.04.2005 for works valued at Rs. 2.239 crores. The parties entered into a formal contract (hereafter 'the Agreement') on 08.06.2005. The Agreement was foreclosed on 30.06.2011 and certain disputes arose between the parties with regard to the amounts payable by respondent to ACL under the Agreement. Prior to the same, ACL had submitted its final bill on 25.05.2011.

3.3 ACL claims that the respondent exerted undue influence and economic coercion by withholding the admitted amounts until ACL issued a No Claim Certificate. It is further claimed that ACL succumbed to the pressure and issued the No Claim Certificate on 09.12.2011. The respondent released the payments to ACL in March, 2012. Thereafter, on 12.09.2012, ACL addressed another communication raising several claims, which were rejected by the respondent on 22.10.2012.

3.4 ACL invoked the arbitration clause on 01.11.2012. Since the respondent did not appoint an arbitrator, ACL approached this Court for appointment of an arbitrator by filing a petition (Arb.P. 293/2013) on 03.07.2013. By an order dated 25.02.2014, this Court appointed Mr. K.L. Katyal (Retd.) Superintending Engineer, NDMC as the Sole Arbitrator to adjudicate the disputes between the parties.

Submissions

4. Mr. Kuriakose Varghese, learned counsel appearing for ACL earnestly contended that the arbitrator has simply accepted the No Claim Certificate and has rejected all the claims without examining the merits of the claims and without considering ACL's claim that the No Claim Certificate was obtained by undue influence and by coercion. He referred to the decision of the Supreme Court in National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd., (2009) 1 SCC 267 and submitted that the Supreme Court had clearly held that in cases where admitted amounts due to a party have been withheld and a No Claim Certificate is demanded as a condition for release of the same, the same would not preclude the parties from agitating their claims. He submitted that a No Claim Certificate obtained by coercion or undue pressure is invalid and would not discharge the Agreement by accord and satisfaction.

5. Mr. Varghese drew the attention of this Court to the fact that the No Claim Certificate had been drafted by the respondent and ACL had recorded this fact in the covering letter forwarding the No Claim Certificate. The learned counsel further submitted that this Court had allowed ACL's petition for appointment of an arbitrator and, therefore, the respondent could not raise the defence of accord and satisfaction, thereafter.

6. Dr. Ashwani Bharadwaj, learned counsel appearing for the respondent countered the submissions made on behalf of AC