Execution of discharge voucher and settlement agreements does not automatically preclude arbitration if coercion, undue influence, or fraud is alleged.

T.S.Thakur, J.

1. In this petition under Section 11(6) of the Arbitration and Conciliation Act 1996, the petitioner prays for the appointment of an independent Arbitrator to adjudicate upon the disputes that have arisen between the parties in connection with a contract for construction of civil works allotted in favour of the petitioner. It is not in dispute that in terms of the agreement executed by the parties, any dispute in relation to their rights and obligations or the interpretation of the terms of the agreement were to be decided by an Arbitrator to be nominated by mutual consent. It is also not in dispute that the petitioner had approached the Punjab State Electricity Board (respondent) for appointment of an Arbitrator but since no such appointment was made within the stipulated time. The present petition was filed for an appointment by the counsel.

2. Ms. Madhu Dayal, learned counsel, appearing for the respondent, contends that although disputes between the parties are arbitrable in terms of the Arbitration clause, any differences that have arisen between the parties, yet there is no room for making any reference to Arbitrator under Section 11 of the Arbitration and Conciliation Act 1996, keeping in view the fact, that the petitioner has during the pendency of these proceedings received full and final payment due to him. It was argued by her that immediately after invoking the arbitration clause and seeking the appointment of an Arbitrator, in terms of letter dated 24.08.2006, the petitioner had received the full and final payment due to him under the Contract and signed requisite bills, discharge vouchers and certificates. She further urged that the refund of the security amount deposited by the petitioner and execution of the discharge voucher and certificates etc. leave no arbitrable dispute outstanding between the parties to call for a reference with arbitrator.

3. Mr. P.S. Rana, learned counsel for the petitioner, however, argued that the receipt of the amount by the petitioner does not disentitle the petitioner from demanding adjudication of the disputes which entitle him to receive further payments from the respondents. He further contended that the discharge voucher, certificates and other documents got signed from the petitioner as pre-requisites for the release of the payment due to him were executed under coercion and undue influence of the respondents and that completion of any procedural formalities which was insisted upon by the respondents left no option for the petitioner but to sign on the dotted lines. The same therefore could not result in forfeiture of the petitioners rights to demand a proper adjudication of the claims that had legitimately arisen between the parties. In support of that submission, he relied upon the decision of the Supreme Court in National Insurance Co. Ltd. v. M/s. Boghara Polyfab Pvt. Ltd., 2009(1) RCR(Civil) 109 : 2008(6) RAJ 509 : AIR 2009 Supreme Court 170.

4. I have given my careful consideration to the submissions made at the bar and perused the record. The question whether a reference to the arbitrator will be maintainable even after the parties have signed a no claim and discharge certificates or other settlement agreement is no longer res-integra in the light of the decision referred to by Mr. P.S. Rana, learned counsel for the petitioner. Their Lordships of the Supreme Court have in the said case authoritatively held that if documents like discharge voucher, no claim certificate and settlement agreements are assailed by a contractor on the ground of coercion, under influence or fraud, the said aspects shall have to be decided either by the Chief Justice or his designate in the proceedings under Section 11 of the Arbitration and Conciliation Act 1996 or by the Arbitration Tribunal. The mere fact that no claim certificate has been issued or a discharge voucher, settlement agreement arrived at between the parties would not ipso facto constitute a negation of the