TMI Blog2013 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... at:- As stated by the Supreme Court in para 22.3 of the judgment in the case of National Insurance Company (supra). The issue (third category) as stated in paragraph which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal. When the facts of the case in hand are examined in the background of law as laid down by Apex Court in the case of National Insurance Company Ltd. (supra) - It cannot be said that the applicant has no prima facie case to seek a reference - The other details to which advocate Shri Godhamgaonkar wants to invite attention are disputed questions of facts and law, which can be looked into by Arbitrator - Hence, those facts and contentions or accompanying documents or evidence are kept open and it is for the Arbitrator to look into said details - The Arbitrator will also look into whether the parties have concluded the contract/transaction by recording satisfaction of their mutual right or obligation or by receiving final payment without objection or whether the claim is a dead (long barred) claim or a live claim. The issue (third category) whether the claim made falls within the arbitration clause (as for example, a matter which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstruction of the existing staircase of Foot Over Bridge, no access for executing 55 Mtr. Length of Addl. Pit line, variations during course of execution of work of substantial nature, delayed payments in gross contravention with the contractual covenants. It is further case of the applicant that without any extension and with pre-requisite condition that both parties to the contract comply with their reciprocal obligation strictly in its order of performance, without any change on the site condition, quantities of work as has been stipulated in the tender, contract work was expected to be completed within 9 calender months. It is further case of the applicant that though the time limit for completion of contract has been stipulated to be essence of the contract by virtue of various terms in the contract imposing reciprocal obligation, so also making performance of the contractor/plaintiff contingent to the successful compliance in its entirety by defendant; and due to existence of clause of extension of time, this stipulation is rendered nugatory. Thus, period of the tender work can be extended with the approval of the defendant in the event of unforeseen difficulties be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010. The said certificate would reveal that it does not provide for restriction for claiming any legitimate claims of the applicant. It does not provide that it is towards full and final satisfaction with complete accord. According to the applicant, said no claim certificate is null, void ab initio and without any legal consequences whatsoever. It is further stated that the applicant has no faith in the respondent and as such about fairness and justness and in these premises, by resorting the provisions of Section 11 of the Arbitration and Conciliation Act 1996, the applicant served notice to respondent in accordance with Section 11 (4) (a) read with Section 11 (5) of Arbitration and Conciliation Act, 1996. In para 15 of the application, the applicant has stated that, the contract inter se the parties provide for resolution of dispute vide arbitration clause, as mentioned in para 15 of the application. It is the case of the applicant that inspite of notice served upon the respondent, vide notice dated 15.10.2010, the respondent has not taken steps for redressal of claim of the applicant nor any appointment of Arbitrator so contemplated as per the Agreement entered into betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Bharat Rasiklal Ashra vs. Gautam Rasiklal Ashra and Anr, reported in (2012) 2 SCC 144 and submitted that the Supreme Court in the said judgment has considered the provisions of Section 11 subsection (6), 7 and 8 and 2(1) (b) of the said Act and held that existence of valid arbitration agreement in respect of dispute raised, has to be looked into by the Chief Justice/his designate. (d) It is submitted that in the facts of the present case, there is agreement between the parties and there is also clause in the said agreement to refer the matter to the Arbitral Tribunal in case of arbitration proceeding. It is submitted that the Supreme Court in the case of Bharat Ashra (supra) in para 12 has stated that the issues which the Chief Justice or his designate is bound to decide; issues which he can also decide, that is, issues which he may choose to decide; and issues which should be left to the Arbitral Tribunal to decide. It is submitted that the issue which the chief Justice/his designate will have to decide are whether the party making application has approached the appropriate High court, whether there is an arbitration agreement and whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief Justice/his designate may choose to decide (or leave them to the decision of the Arbitral Tribunal) are; a) whether the claim is a dead (long barred) claim or a live claim, (b) whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection. (i) It is submitted that in third category, the issue as held by the Supreme Court in the case of Bharat Ashra (supra) whether the claim made falls within the arbitration clause (as for example, a matter which is reserved for final decision of a departmental authority and excepted or excluded from arbitration). It is submitted that merits or any claim involved in the arbitration could also be decided by the Arbitrator. Therefore, according to the learned counsel appearing for the applicant, since the respondent inspite of notice, has not taken steps to refer the matter to the Arbitral Panel, this Court can appoint Arbitrator under Section 11 of the Arbitration and Conciliation Act. Learned counsel invited my attention to para 10 of the petition and submitted that the applicant has suggested the names of two retired judges o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the other contractor employed by the Railways under Sub clause (4) of clause -20 of G.C.C. the extension of time shall be considered and shall be granted having regard to the nature of period of delay and the type and the quantum of work attended thereby. It is also stipulated that in the event of such grant of extension, no compensation shall be payable for the works so carried forward to the extended period of time, the same rate terms and conditions of contract being applicable as if such extended period of time was originally provided in the original contract itself. (d) It is submitted that all the contractual payments, for the work done as per agreement, were made to the contractor. Final bill and security deposits were also released after obtaining no claim certificate from the applicant, as per clause 43(2) of G.C.C., which reads as under. The contractor shall not be entitled to make any claim whatsoever against the Railway under or by virtue of or arising out of this contract, nor shall be railway entertain or consider any such claim, if made by contractor, after he shall have signed a No claim Certificate in favour of the railway in such form as shall be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d my attention to clause 63 of G.C.C. It is submitted that the applicant has signed and submitted no claim certificate with eyes wide opened and without any compulsion. Therefore, the applicant is precluded from raising any dispute, claims to be referred to the arbitration. It is submitted that the application of the applicant that no claim certificate is obtained by Railway under pressure is totally baseless and unfounded. It is submitted that the applicant-contractor was allowed to complete the work by giving reasonable extension of time without levying any penalty, as provided by clause 17(A) of G.C.C. of completion of work done as per the agreement, final bill and recurring deposit were also released after the applicant submitted no claim certificate . Therefore, learned counsel appearing for the respondent relying upon the affidavit in reply, contentions in the agreement, judgments cited across the bar would submit that the application is devoid of merits and the same may be rejected. 5. I have given careful consideration to the submissions of learned counsel appearing for the parties. With the able assistance of counsel for the parties, perused the entire material place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in the case of National Insurance Company Ltd., the Chief Justice or his designate will have to decide whether the party making an application has approached the appropriate High Court. In the present case, the applicant is ordinary resident of Nanded city, which is within the jurisdiction of this Court. Therefore, the applicant has approached the appropriate High Court. There is arbitration agreement between the applicant and the respondent. The applicant did send notice to the respondent for appointment of the Arbitrator invoking the relevant clause of the agreement which provides for referring the matter to the Arbitrator in case of dispute between the parties. However, the respondent refused to appoint the Arbitrator on the ground that the applicant has finally settled the matter and issued no claim certificate and matter is covered under excepted matter and therefore, in view of clause 63 of the G.C.C. the matter cannot be referred to the Arbitrator. Therefore, the applicant herein has filed application under Section 11 of the said Act. The applicant is party to the agreement with the respondent. Therefore, in the facts of the present case, the applicant has approa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 43 of G.C.C., the applicant/contractor shall not be entitled to make any claim whatsoever against the Railway under or by virtue of or arising of the contract since he has signed a no claim certificate. The contention of the respondent is that in view of the provisions of clause 63 of G.C.C. also the applicant is barred from praying for referring the matter to the Arbitrator since the case falls under excepted category. In this respect, it would be apposite to refer to para 52 from the judgment of the Supreme Court in the case of National Insurance Company Limited , which reads thus:- 52. Some illustrations (not exhaustive) as to when claims are arbitrable and when they are not, when discharge of contract by accord and satisfaction are disputed, to round up the discussion on this subject : (i) A claim is referred to a conciliation or a pre-litigation Lok Adalat. The parties negotiate and arrive at a settlement. The terms of settlement are drawn up and signed by both the parties and attested by the Conciliator or the members of the Lok Adalat. After settlement by way of accord and satisfaction, there can be no reference to arbitration. (ii) A claimant makes sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes the claim. The claimant who is keen to have a settlement and avoid litigation, voluntarily reduces the claim and requests for settlement. The respondent agrees and settles the claim and obtains a full and final discharge voucher. Here even if the claimant might have agreed for settlement due to financial compulsions and commercial pressure or economic duress, the decision was his free choice. There was no threat, coercion or compulsion by the respondent. Therefore, the accord and satisfaction is binding and valid and there cannot be any subsequent claim or reference to arbitration. 9. Upon careful perusal of correspondence dated 29.8.2008, 10.11.2009 and 15.11.2010 made by the applicant herein to the General Manager, South Central Railway, Secundarabad (A.P.) i.e. the respondent herein, the applicant herein has stated that the alleged no claim certificate is specifically denied by the applicant. No claim certificate has not signed by the applicant. It is only the signatures which were obtained by the Officers of the respondent under the threats to the applicant that all his payment would be withhold if he does not sign on the blank papers provided by the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the contention of the counsel appearing for the respondents that the case of the applicant would fall in clause II of para 52 from the said judgment, cannot be accepted. Upon careful reading of the averments in the application and contents of the notice/letter/correspondence by the applicant with the respondent, it prima facie appears that said no claim certificate is under financial duress on account of condition of the employer that unless such certificate is issued by the applicant/contractor, he is not entitled to get the payment. 12. The other contention raised by the respondents which leads to disputed questions like whether the claim made falls within arbitration clause or not, can be taken care of by the Arbitrator. As stated by the Supreme Court in para 22.3 of the judgment in the case of National Insurance Company (supra) . The issue (third category) as stated in paragraph which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal. 13. When the facts of the case in hand are examined in the background of law as laid down by Apex Court in the case of National Insurance Company Ltd. (supra), it cannot be said that the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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