9911796707
TMI Blog1998 (8) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent/company and it was paid amounts in instalments. On 23-1-1996, the petitioner/firm has submitted the final bill amounting to Rs. 63,14,070. The respondent/company kept the matter pending for weeks and after repeated demands, they had a negotiation but it failed and thereafter the matter was referred to G. Satya Rao, architect, by the respondent /company for arbitration. A tripartite meeting was conducted on 24-2-1996 which was attended by the representative of the petitioner/ firm, respondent/company and G. Satya Rao, the architect. The architect has taken sides with the respondent/company and he was won over by it. The final payment was deliberately delayed to pressurise the petitioner/ firm. On 13-3-1996, the representative of the petitioner/firm was of f erred Rs. 1 lakh as the final payment though a sum of Rs. 10,71,586 was due to it. The petitioner/firm was in deep financial crisis as it had to clear the dues of other suppliers. The attitude of the Chairman/Managing Director of the respondent/company was unreasonable and harsh and, therefore, the partner of the petitioner/firm, Biju Kolleri, had no other alternative but to accept the payment of Rs. 1 lakh. He was forced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt in respect of the work done by it. On 24-2-1996, a meeting was called by the architect for discussing the additional works etc., of the rates which were finalised on 24-2-1996 only. The final bill was submitted to the architect by the applicant who issued final certificate dated 4-3-1996 in accordance with clause 31.6 of the Agreement. On 13-3-1996, the amount as stated above was paid to the petitioner/ firm in full and final satisfaction of the work done by it. On 8-4-1996, the petitioner/firm made baseless and unsustainable claims and had invoked clause 56 of the Agreement for arbitration. As there was accord and satisfaction, the arbitration clause has perished. The payment was received by the petitioner/firm voluntary- ily and without any protest and in full satisfaction for the work executed by it and the claim now made is an afterthought. The other allegations made by the petitioner/firm have also been denied. 5. In the additional affidavit, the respondent/company has alleged that the representative of the petitioner/firm had not submitted the bill for Rs. 63,14,070, but on that day, the representative of the petitioner/firm visited the respondent/company to prepare t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it is also not supported by its covering letter. Therefore, it is evident that the bill dated 23-1-1996 has not been prepared by the petitioner/firm, but it was prepared by the respondent/company with the aid of its computer, wherein the amounts have been reduced. The representative of the petitioner/firm from 4-4-1996 had started bringing to the notice of the respondent/company that full payment was not made to it and, therefore, balance amount should be paid or arbitrator should be appointed to resolve the dispute. 7. On the other hand, it has been argued on behalf of the respondent/ company that the bill, though dated 23-1-1996, was prepared by the representative of the petitioner/firm in the office of the respondent/ company on 26-2-1996 or 27-2-1996 on the basis of the rates agreed to between them in the presence of the architect on 24-2-1996. The architect had intimated through its letter dated 4-3-1996 that it has ratified the bill and, therefore, the final payment was made on 13-3-1996. An amount of Rs. 2,041 had been kept by the respondent/company towards T.D.S. and the balance amount of Rs. 1 lakh was paid to the representative of the petitioner/firm, Biju Kolleri w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sections 8,11 and 12 of the Old Act, had appointed an arbitrator at the instance of the Contractor for adjudication of the dispute between the contractor and the owner. The High Court, in revision, accepted the plea of the employer that the contractor had acknowledged the final measurement and accepted the bill in full and final settlement of the contract and, therefore, there was no subsisting contract for reference. The contractor had carried the matter to the Supreme Court. The case of Damodar Velley ( supra ) and the case of Bharat Heavy Electricals Ltd. ( supra ) , were referred in this case of P.K. Ramaiah (supra), Distinguishing these cases, the Supreme Court held that the contractor P.K. Ramaiah having acknowledged the settlement as also accepted the measurement and having received the amount in full and final satisfaction of the claim, there was accord and satisfaction and there was no existing arbitrable dispute for reference to the arbitration and rejected the subsequent allegation of the contractor of coercion on the ground that it is an afterthought and a device to get over the settlement of the dispute. 11. In the case of Nathani Steels Ltd v. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the parties, such a dispute or difference does not remain to be an arbitrable dispute and the Arbitration clause cannot be invoked even though for certain other matters, the contract may be in subsistence. Learned counsel for the respondent, however, placed great emphasis on an earlier decision of this Court in Damodar Valley Corpn. v. K.KL Kar and in particular to the observations made in paras 11 to 13 of the judgment. It may, at the outset, be pointed out that a similar argument was advanced based on the observations made in this decision, in Ramaiah Case also (vide para 7) but the same was rejected holding that on the facts since the respondent did not give any receipt accepting the settlement of the claim, the payment made by the other side was only unilateral and hence the dispute subsisted and the Arbitration clause in the contract could be invoked. Therefore, that decision can be distinguished on facts. Even otherwise we feel that once the parties have arrived at a settlement in respect of any dispute or the difference arising under a contract and that dispute or the difference is amicably settled by way of a final settlement by and between the parties, unless t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d recorded a finding that if a party had to give 'no-claim certificate' before finalising the bills and had received the payment under coercion, misrepresentation, mis- take, duress, etc., etc., the said party has a right to raise the legitimate disputes and get the matter referred to the arbitrator for adjudication, but where the full and final settlement was accepted voluntarily and uncon-ditionally, then, subsequent claim for further amounts in respect of the same work done is not an arbitrable dispute to be referred to the arbitrator for adjudication, because, in such a case, the arbitrator will have no jurisdiction to decide the same and it is only when the Court, on facts, decides that the dispute is an arbitrable dispute, it would be referred to the arbitrator for adjudication. 14. The position of law that emerges from the above discussion is that the question whether the full and final settlement in respect of any dispute or difference in relation to a matter covered under the arbitration clause in the contract has been voluntarily done or not when undue influence or coercion etc., is alleged to have been practised on the contractor, is a question to be decided by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e undue influence. 17. It is not disputed before me that in the final bill dated 23-1-1996, Biju Kolleri as the Managing Partner of the petitioner/firm had signed on all the 10 pages of the final bill and has put the date below his signatures as 13-3- 1996. On the last page of the bill, he has not only signed and put the date but has also affixed thumb impression of his left hand on a revenue stamp. The contents above his signature and thumb impression read as under: "Accepted the sum of Rs. 1,00,000 (Rupees One Lakh only) Vide Ch. No. 347540 dt: 13-3-96 towards the final payment settlement (as per the above statement) towards the Civil Works carried out at factory site of Nectar Laboratories Limited at Plot No. 54A and 54B, Anrich Industrial Estate, Bollaram (Vill.), Jinnaram Mandal." It is also an admitted fact that another partner of the petitioner/firm namely Bimal Kolleri had obtained certificate of deduction of tax at source under section 203 of the Income-tax Act in Form No. 16-A on 18-3-1996 from the respondent/company. 18. The ground on which the petitioner/firm avoids the aforementioned final settlement of the claim in question is that the managing partner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills, the payment made on 13-3-1996 cannot be taken as full and final settlement, but no allegation regarding corecion or undue influence has been made in it. It is also noteworthy that no allegation for whatever worth had been made by the petitioner/firm against the architect A. Satya Rao. It is interesting to note that for the first time in the letter dated 25-5-1996, the petitioner/firm has alleged that the amount of Rs. 1 lakh made on 13-3-1996 was accepted due to the pressure on its financial resources lest this payment also would not have seen the light of the day. But, in this letter also there is no allegation with regard to practising of undue influence or coercion against the managing director of the respondent/company and no allegation against the architect has been made that he had been won over by the respondent/company. The petitioner/firm was a creditor. It was or was not in need of money on 13-3-1996, but the omission of allegations regarding undue influence and coercion in the aforementioned three letters belies the subsequent allega-tions made for the first time in the impugned application for appointment of arbitrator. There is no material on record to-inf er tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs. 63,14,070 along with the covering letter on its letter head or whether it has finalised the bill on 26-2-1996 or on 27-2-1996 in the office of the respondent/company on the basis of the mutual agreement regarding the rates of separate items reached on 24-2-1996, do not appear to be material for deciding whether coercion and undue influence had been practised by the respondent/company or not because the fact remains that on every page of the bill dated 23-1-1996, the managing partner of the petitioner/ firm, Biju Kolleri, had knowingly and understanding the contents therein not only signed but had also affixed his thumb impression on the revenue stamp and the other partner of the petitioner/firm Bimal Kolleri had obtained the TDS certificate on 18-3-1996 and no allegation of undue influence or coercion has been made in any of the letters written by the petitioner/firm and for the first time such allegations have been made in the affidavit filed along with the application for appointment of the arbitrator. It is also not out of place to mention that the mere recital in the subsequent letters regarding the financial crisis of the petitioner/firm is not a ground for repudiating ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
