The main legal point established is that the submission of a 'no claim certificate' does not necessarily foreclose the right to raise further claims, and disputes involving such certificates are arbitrable.

ORDER :

Heard Mr.Kilashnath PSS, learned counsel for the applicant and Mr.C.V.Rajeeva Reddy, learned counsel for respondent No.1. Also heard Mr.Gadi Praveen Kumar, learned counsel for respondent No.2.

2. This application has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (briefly, ‘the 1996 Act’, hereinafter) for appointment of arbitrator.

3. Applicant is a company engaged in the business of civil and structural, infrastructural and electrical engineering services.

4. First respondent which is a Government of India enterprise, issued tender notice inviting tenders for the work “construction of laboratory, buildings, animal house, security block including internal roads, compound wall, underground sump, water supply, sanitary, internal electrification and other ancillary works at site ‘A’ and construction of hostel building, residential blocks, Director’s bungalow, internal roads, underground sump, water supply, sanitary, internal electrification and other ancillary works at site ‘B’ for the Centre for DNA Fingerprinting and Diagnostics at Uppal X Roads, Hyderabad”. Tender submitted by the applicant was accepted by the first respondent on 25.03.2013 for a total contract price of Rs.50,03,16,920-04, with completion period being 24 months.

5. Pursuant thereto, both the parties i.e. applicant and respondent No.1 entered into an agreement on 17.05.2013 at Hyderabad.

6. Though the stipulated date of completion was 24 months, with expiry date being 21.04.2015, there were extensions from time to time for reasons completely beyond applicant’s control. According to the applicant, the execution of the work was extended beyond the contract period for a further period of 691 days.

7. Because of such extension and associated escalation of price, applicant issued notice to the first respondent on 23.04.2015 for additional payment. This was followed by letters dated 05.07.2015 and 01.07.2016. However, respondents did not agree with such claim of the applicant.

8. Be that as it may, applicant completed the execution of the work on 31.12.2016 to the full satisfaction of respondent No.1. Last bill was submitted by the applicant on 24.08.2017.

9. When applicant enquired about payment to be made to it, it was informed that unless applicant furnished a ‘no claim certificate’ in the prescribed format to the first respondent, it would not receive the remaining payment. However, according to the applicant, submission of no claim certificate along with the final bill was not envisaged in the agreement. But, because of the dominant position of the first respondent and also on account of the fact that applicant was in dire need of money, it had submitted a no claim certificate on 07.03.2018, which it is stated was under coercion and duress. Two days after the no claim certificate was submitted, payment was made to the applicant on 09.03.2018.

10. Applicant thereafter issued letter to the first respondent regarding additional payment which was, however, rejected by respondent No.1 on the ground that applicant had submitted no claim certificate. Applicant has stated that all disputes arising out of the contract are governed by Clause 25 of the general conditions of contract. Accordingly, applicant had submitted its claim to the first respondent, vide letter dated 30.07.2018. The details of claim are mentioned in paragraph No.10 of the affidavit and in annexure IX.

11. Respondent No.1 denied all the claims of the applicant through its letter dated 21.08.2018 since applicant had signed and filed a no claim certificate. Being aggrieved by the rejection letter of respondent No.1 dated 21.08.2018, applicant wrote back to the first respondent on 30.08.2018 stating that though the final bill was submitted on 24.08.2017, it was informed that unless a no claim certificate was furnished in a prescribed proforma, the final bill would not be paid. Applicant was directed to submit a no claim certificate in a proforma handed over, though submission o