JUDGMENT

% 24.09.2024

1. The Senior Divisional Engineer, Northern Railway, Firozpur, entered into an agreement with the respondent on 25 September 2000 for carrying out work on the Jalandhar-Firozpur section of the Northern Railway. The original date of completion of the work was 20 December 2000. The agreement provided for resolution of disputes by arbitration.

2. Alleging that certain payments were due to him from the Railways, the respondent approached the petitioner/Railways to appoint an arbitrator. On the petitioner not agreeing, the respondent O.M.P.26/2009 Page1of52 Signature Not Verified Signature Not Verified Digitally Signed By:AJIT Digitally Signed KUMAR By:CHANDRASHEKHARAN

approached this Court under Section 11(6) of the Arbitration and

Conciliation Act 1996, [1“the1996Act”hereinafter]

3. By order dated 5 October 2004, this Court appointed a former Director General of the Central Public Works Department as the arbitrator, who has come to pass the award under challenge in these proceedings.

4. After the learned arbitrator had entered on reference, the petitioner filed an application before this Court on 30 December 2004, for setting aside the order referring the disputes to arbitration, as the respondent had issued a No Claim Certificate² in favour of the petitioner on 13 October 2003. As the respondent had thus disclaimed any amount remaining due from the petitioner, it was submitted that there was no arbitrable dispute left for decision.

5. The said application was disposed of by this Court with liberty to the petitioner to raise the issue before the learned arbitrator.

6. The dispute has finally come to be decided by the learned arbitrator by the award dated 17 October 2008 under challenge in this petition.

7. Of the fifteen claims preferred by the respondent, the learned arbitrator has awarded only four, apart from costs and interest.

2“NCC”,hereinafter

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Signature Not Verified Signature Not Verified

Digitally Signed By:AJIT Digitally Signed

KUMAR By:CHANDRASHEKHARAN

8. Aggrieved by the award, the petitioner Railway has moved this Court under Section 34 of the 1996 Act.

9. I have heard Mr. Jivesh Tiwari, learned Counsel for the petitioner and Mr. S.W. Haider, learned Counsel for the respondent at length.

10. Learned counsel have also filed written submissions.

Rival contentions

11. Mr. Tiwari restricted his challenge to two aspects, viz., (i) the NCC issued by the respondent and its effect and (ii) the correctness of the decision of the learned arbitrator to award interest.

12. Mr. Tiwari submits that, once the respondent had signed the NCC, he was not entitled to maintain any claim against the petitioner in respect of work allegedly done but not paid. Mr. Tiwari relies on Clauses 43(a) and 51 of the GCC, which read thus:

“Clause 43(a): Signing of No Claim Certificate: The Contractor shall not be entitled to make any claim whatsoever against the Railway under or by virtue of arising out of this contract, nor shall the Railway entertain or consider any such claim, if made by the Contractor, after he shall have signed a 'No claim' certificate in favour of the Railway in such form as shall be required by the Railway, after the works are finally measured up. The contractor shall be debarred from disputing the correctness of the items covered by the 'No claim certificate or demanding a reference to arbitrationinrespect thereof."

“Clause 51, Final payment: "Payment (s) ... subject to contractor O.M.P.26/2009 Page3of52 Signature Not Verified Signature Not Verified Digitally Signed By:AJIT Digitally Signed KUMAR By:CHANDRASHEKHARAN having delivered to the Engineer either a full account in detail of all claims he may have on the Railways in respect of the works, or having delivered a“NoClaim”Certificate.”

13. He submits that, inasmuch as they are in the teeth of these clauses, the findings of the learned Arbitrator, on the implications of the NCC, are not sustainable in law.

14. On the aspect of interest, Mr. Tiwari places