1998 (7) TMI 618 - HC - Companies Law

Summary

Issues:
1. Claim for reimbursement of increased wages under Minimum Wages Act.
2. Claim for extra overhead charges due to prolongation of contract period.
3. Claim for increase in cost of teak-wood and GI wire mesh.
4. Dispute over invoking arbitration clause due to issuance of 'No Demand Certificate'.

Analysis:

1. The applicant, a registered firm, sought reimbursement for increased wages under the Minimum Wages Act due to a revision during the construction contract. The applicant contended completion of work to the respondent's satisfaction and claimed entitlement to reimbursement. The respondent disputed liability, citing a 'No Demand Certificate' issued by the applicant post-payment. The court noted the issuance of the certificate and the lack of coercion, leading to a finding of accord and satisfaction, dismissing the claim.

2. The applicant also claimed extra overhead charges and increased costs for teak-wood and GI wire mesh due to delays attributed to the respondent. However, the respondent argued that the applicant had waived all rights to future claims through the 'No Demand Certificate.' The court found the certificate as conclusive evidence of settlement, rejecting the applicant's claims for additional charges.

3. The dispute escalated when the applicant invoked arbitration under clause 56 of the contract, which the respondent rejected, citing the 'No Demand Certificate' as a bar to arbitration. The court examined precedents, including the Supreme Court's stance on accord and satisfaction in similar cases. It emphasized that post-settlement disputes, like coercion allegations, were invalid attempts to circumvent prior settlement agreements. Consequently, the court dismissed the arbitration request due to the absence of an arbitrable dispute.

4. The court's decision was influenced by the precedent set by the Supreme Court in cases like L.K. Ahuja & Co., emphasizing the importance of honoring settlement agreements and the ineffectiveness of post-settlement disputes. The court found the 'No Demand Certificate' as a clear indication of accord and satisfaction, leading to the dismissal of the applicant's petition for arbitration. The judgment highlighted the need for parties to honor settlement agreements and discouraged attempts to revive disputes post-settlement.