2006 (11) TMI 668 - SC - Indian Laws

Summary

Issues involved:
The issues involved in this case are delay in completion of work, extension of time application, settlement of disputes by arbitration, submission of a No Claim Certificate, appointment of arbitrator, setting aside of award, challenge under Section 34 of the Arbitration and Conciliation Act, interpretation of General Conditions of Contract, coercion and duress in signing the No Claim Certificate, consideration of claims by the arbitrator, and the effect of Clause 43(2) of the General Conditions of Contract.

Delay in Completion of Work and Extension of Time Application:
The appellant submitted a tender for certain works which was accepted with a completion date of 30th June, 1993. Due to delays, the appellant requested an extension of three months, which was eventually denied. The appellant suffered losses and submitted a No Claim Certificate to recover its security deposit.

Appointment of Arbitrator and Setting Aside of Award:
After the respondent failed to appoint an arbitrator, the appellant filed an application under Section 11 of the Arbitration and Conciliation Act. An arbitrator was appointed, who found the No Claim Certificate was signed under duress but disallowed certain claims. Both parties filed applications to set aside the award, which was ultimately set aside and a new arbitrator was appointed.

Challenge under Section 34 and Interpretation of General Conditions of Contract:
The respondent challenged the new award under Section 34 of the Arbitration and Conciliation Act, arguing that the No Claim Certificate precluded further claims. The Single Judge upheld the award, but the Division Bench set it aside based on Clause 43(2) of the General Conditions of Contract, stating there was no proof of coercion in signing the certificate.

Coercion and Duress in Signing No Claim Certificate:
The Division Bench found that there was no evidence of coercion in signing the No Claim Certificate, leading to the setting aside of the award. The appellant argued that circumstances forced them to submit the certificate to recover their security deposit, citing the maxim "Necessitas non habet legem."

Effect of Clause 43(2) of the General Conditions of Contract:
Clause 43(2) states that once a contractor signs a No Claim Certificate, they cannot raise further claims. However, the Court found that in this case, the certificate was submitted under duress, and the appellant was entitled to claim a reference under the contract despite the clause. The Division Bench's decision was overturned, and the appeals were allowed with no order as to costs.