The court reaffirmed that a full and final settlement of disputes renders the matter non-arbitrable, limiting the court's jurisdiction under Section 11(6) to the existence of an arbitration agreement.

ORDER :

Manindra Mohan Shrivastava, C.J.

1. Applicant has preferred an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act of 1996’) for appointment of sole arbitrator for adjudication of the dispute, which is said to have arisen between the applicant and non-applicant with reference to appointment letter dated 16.07.2012.

2. The applicant claims that he was initially appointed with the respondent on the post of Assistant in purchase department vide appointment letter dated 16.07.2012. In the application, it has been stated that one of the condition in the appointment letter was that all the disputes regarding the service of the applicant will be referred to the arbitrator for adjudication. Pursuant to a departmental enquiry initiated vide charge-sheet dated 18.03.2020 by the respondent against the applicant, the applicant was dismissed from service vide order dated 20.08.2020. On representation made to the Collector, dispute was referred to the Joint Labour Commissioner, who vide order dated 11.09.2020 closed the case stating that it lacked the jurisdiction. Finally a notice was given to the respondent by invoking arbitration clause and seeking appointment of an arbitrator. The applicant sent a notice invoking arbitration clause and nominated an arbitrator of his choice. The respondent refused to concur with the nomination made by the applicant. In these circumstances, the applicant has filed the present application seeking appointment of an arbitrator in terms of the arbitration clause as contained in his appointment order dated 16.07.2012.

3. In the reply, respondent has come out with the case that the applicant has filed application concealing the fact that after legal notice for appointment of an arbitrator was given by the applicant, the applicant settled the dispute and entered into a full & final settlement with the respondent Company through letter dated 05.12.2020, whereby, the applicant had accepted cheques against full & final settlement towards all his disputes, which was duly counter signed by the applicant himself. As per clause No.4(d) of the appointment letter dated 16.07.2012, either party could terminate the appointment by giving three months notice or salary in lieu thereof. Three months salary had already been paid in full & final account settlement dated 05.12.2020, which was duly signed and accepted by the applicant, therefore, no dispute exists between the parties. Copy of letter dated 05.12.2020 has also been placed on record. It is also averred in the reply that the applicant had encashed all the cheques towards full & final settlement and has received the payments also. Concealing all the facts as above, the applicant has filed application seeking appointment of an arbitrator. In sum and substance, the reply of the respondent is that the applicant entered into settlement of all disputes, received cheques and also got the amount encashed without any demeanur or protest, the dispute as raised through this application is non-arbitrable, frivolous and afterthought.

4. While the applicant has submitted that he was illegally terminated from services and has raised various grounds to assail correctness and validity of the order of dismissal from service, respondent-non-applicant’s case has been that on a prima-facie view, it is a non-arbitrable dispute on account of full & final settlement of all the claims.

5. We have heard learned counsel for the parties as also Amicus Curiae.

6. The issue which arises for consideration is whether, on the facts of the case, the dispute is non-arbitrable on account of full & final settlement of all the claims.

7. Before I deal with the factual aspects of the case, it is apposite to refer to recent judicial pronouncements of the Hon’ble Supreme Court on the aspect of non-arbitrability of the dispute and scope of judicial review with regard to non-arbitrability of the dispute.

8. In the case of Indian Oil Corporation Limi