Dismissed

M/S Deva and Co. v. Northern Railway and Ors.

Punjab & Haryana HC21 Jul 2011ARB/93/2007

Case brief

AI extract

What is this about?

The High Court dismissed petitions seeking appointment of an arbitrator, holding that no arbitrable dispute existed as the respondents had paid a full and final settlement amount based on a document signed by the petitioners without evidence of fraud or coercion.

What did the court decide?

Petitions for appointment of arbitrators in cases 93 to 97 of 2007 were dismissed, maintaining the status quo of the full and final settlement.

M/S Deva and Co. Vs Northern Railway and Ors. — Arbitration | Punjab & Haryana HC (2011)

¶1

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

¶2

Date of decision: 21.7.2011

¶3

Arb. Case No. 93 of 2007 M/s Deva & Company …..Petitioner vs. Northern Railway and ors …..Respondents 2. Arb. Case No. 94 of 2007 M/s Deva Constructions Company …..Petitioner vs. Northern Railway and ors …..Respondents 3. Arb. Case No. 95 of 2007 M/s Deva Constructions Company …..Petitioner vs.

¶4

Northern Railway and ors …..Respondents 4. Arb. Case No. 96 of 2007 M/s Deva Enterprises …..Petitioner vs. Northern Railway and ors …..Respondents 5. Arb. Case No. 97 of 2007 M/s Deva & Company …..Petitioner vs. Northern Railway and ors …..Respondents

¶5

CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA

¶6

Arb. Case No. 93 of 2007

¶7

¶8

Present: - Mr. Sandeep Khungar, Advocate for the petitioner.

¶9

Mr. Jagdish Marwaha, Advocate for respondents

¶10

HEMANT GUPTA, J

¶11

This order shall dispose of Arbitration cases No. 93, 94, 95, 96 and 97 of 2007 as the common questions of law and facts are involved in all these cases. For brevity, the facts are being taken from Arbitration Case No. 93 of 2007.

¶12

The petitioner has sought appointment of an Arbitrator to resolve the disputes between the parties in respect of the work allotted to the petitioner on 15.6.1995 for a contract of Complete Track Renewal of Broad Gauge Track on Ferozepur City Fazilka Section for an approximate cost of Rs. 11,10,000/-. The work was to be completed on or before 14.11.1995.

¶13

As per the petitioner, the allotted work was completed but certain payments were not made which led to filing of the petition by the petitioner before the learned Civil Judge, (Senior Division), Ferozepur on 15.6.2002. The claim of the petitioner, inter alia, is that the petitioner has been paid @ Rs. 100/- per metre for the work done instead of the contract amount of Rs. 124/- per metre. The petitioner is entitled to interest for the period from 15.6.1995 to 30.3.2001 i.e. for 5 years and also for certain other claims including a sum of Rs.

¶14

Arb. Case No. 93 of 2007

¶15

¶16

25,00,000/- on account of non supply of ballast and prolonging the period of contract un-necessarily. Subsequent to the judgment of Hon’ble the Supreme Court State Bank of

¶17

Patiala vs. Patel Engineering Limited and another, 2005

¶18

(8)SCC 618 , the present petition was returned to the petitioner for presentation before this Court. Thus, the present petition was filed before this Court and now the same has come up for final hearing.

¶19

In reply, on behalf of respondents, it has, inter alia, been pleaded that on 30.3.2001, the petitioner has accepted the measurement as correct and also stipulated that he has no claim. Such endorsement was recorded in the measurement book. Therefore there is no dispute which is required to be referred to an Arbitrator. In support of the said averments, respondents have attached the photocopy of the measurement book wherein, the following endorsement has been recorded: -

¶20

“Measurement accepted full and final

¶21

with no claim.”

¶22

On 14.10.2010, this Court granted time to the parties to produce the affidavits to show whether the entire amount claimed in the final bill was paid or not. In pursuance of the said affidavit, respondents have filed document (Annexure R-7) which shows the detailed calculations of the amount paid and it shows that the final bill was passed for an amount of Rs. 49,630/- after giving the benefit of penalty

¶23

¶24

Arb. Case No. 93 of 2007

¶25

deducted. The said document also contains a printed endorsement that the contractor has no other claim outstanding against Northern Railway or the material supplied or any other account and payment of this bill shall be final settlement of all his claims in respect of the work.

¶26

Learned counsel for the petitioner has vehemently argued that the endorsement in the measurement book is only in respect of the acceptance and the correctness of the measurement of the work done and the endorsement has no relation whatsoever in respect of the financial claims of the petitioner. It is contended that the endorsement as Annexure R-7 is on a printed proforma and therefore, the said endorsement cannot be treated as a voluntary settlement of all the claims as the petitioner was made to sigh such documents before the release of payment.

¶27

Having heard learned counsel for the parties, at some length, I do not find that there is any dispute which requires adjudication by an Arbitrator. In the petition seeking appointment of an Arbitrator filed before the learned Civil Court on 15.6.2002, there is no averment that the petitioner has signed the No Due Certificate (Annexure R-7) under coercion, fraud or misrepresentation. Apart from any lack of averments in the petition, there is no other document to show that the petitioner ever disputed the calculations given by respondents in the aforesaid document. After the full and final payment was made, the security amount was also released.

¶28

Arb. Case No. 93 of 2007

¶29

¶30

The petitioner has not raised any dispute even at that point of time. It is thereafter, on 15.6.2002, the petitioner has raised certain claims which cannot be permitted to be raised after the petitioner has accepted the full and final settlement.

¶31

The issue regarding ‘No Due Certificate’ came to be considered in Arbitration Case No. 92 of 2007, M/s Natha Singh Government Contractor vs. Union of India and others decided on 23.2.2011 , wherein after considering the judgment of Hon’ble Supreme Court rendered in National Insurance Co. ltd. Vs. M/s Boghara Polyfab Pvt. Ltd. AIR 2009 SC 170, it has been held as under: -

¶32

“As per the judgment in National Insurance Co. Ltd. case (supra), the fact whether the agreement is actuated by fraud, coercion and undue influence is required to be, prima facie, examined by this Court while exercising the jurisdiction under Section 11(6) of the Act. It was held to the following effect: -

¶33

“18. What is however clear is when a respondent contends that the dispute is not arbitrable on account of discharge of the contract under a settlement agreement or discharge voucher or no-claim certificate, and the claimant contents that it was obtained by fraud, coercion or under influence, the issue will have to be decided either by the Chief Justice/his designate in the proceedings under Section 11 of the Act or by the Arbitral Tribunal as directed by the order under Section 11 of the Act. A claim, for arbitration cannot be rejected merely or solely on the ground that a settlement agreement or discharge voucher had been executed by the claimant, if its validity is disputed by the claimant.”

¶34

In view of the above, if the facts of the present case are examined, I do not find that the petitioner has made

¶35

Arb. Case No. 93 of 2007

¶36

¶37

sufficient case in support of its plea that the supplementary agreement is actuated by fraud, coercion and undue influence. Though 08.04.2007 is the date put up by the petitioner under his signatures on the said agreement as against 26.04.2007 on behalf of the respondents, but the fact remains that as against the claim of Rs.25 lac or so, the petitioner has been paid a sum of Rs.17,73,344.72/- in full and final satisfaction of its claim. The petitioner has not denied the acceptance of the aforesaid amount. After the receipt of the said amount, there is no objection raised by the petitioner that its signatures were obtained in advance as is pleaded in the rejoinder and there was any coercion, fraud or undue influence. In fact, in the notice issued after the payment was released i.e. 08.06.2007, the petitioner has not made any grievance in respect of his signatures being obtained in advance as is pleaded in the rejoinder. The petitioner has not even disclosed the signing of the agreement on 08.04.2007 in his petition under Section 11 of the Act. Such fact has been asserted for the first time in the rejoinder to the written statement filed by the respondents. The petitioner has not disputed the execution of the supplementary agreement at the first opportunity after receiving of payment; in the demand notice dated 08.06.2007 or in petition under Section 11 (6) of the Act. Therefore, the plea in the rejoinder is an after thought. Thus, the supplementary agreement cannot be said to be executed from the petitioner by fraud, coercion and undue influence.”

¶38

Still further, the endorsement referred to above not

¶39

only deals with measurements and the words full and final and no claim suggest that it relates to payment alone. Therefore, having settled the claim with the respondents, the

¶40

Arb. Case No. 93 of 2007

¶41

¶42

petitioner cannot be permitted to raise any dispute in the

¶43

present petition.

¶44

Consequently, the present petitions are dismissed.

¶45

(HEMANT GUPTA) JUDGE

¶46