M/s Jaswant Singh v. Union of India & Ors.

HON'BLE MR. JUSTICE T.S.THAKUR,CHIEF JUSTICE Present : Mr. Rajnish Narula, Advocate for the petitioner Ms. Deepali Puri, Advocate for the respondents **** T.S.Thakur, C.J.(Oral) Disputes between the parties having arisen in relation to a certain contract awarded to the petitioner-claimant for the execution of certain civil works in Mohali (Punjab), the present application seeks reference of the same to arbitration. It is not disputed that a final bill was also prepared, the payment whereof was released in favour of the petitioner, after he signed a 'No claim Certificate'. Having received the final payment, the petitioner appears to have made a request for reference of certain outstanding claims to an Arbitrator in terms of Clause 70 of the Contract executed between the parties. The said request was turned down vide communication dated 31.10.2006 Annexure R-1 to the reply filed by the respondents.

Aggrieved, the petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 ( for short ' the Act') for appointment of an Arbitrator and reference of the disputes between the parties to him for adjudication. Arbitration Case No. 111 of 2007 [2] Appearing for the petitioner, Mr. Rajnish Narula submitted that while it may be true that the petitioner had singed a final bill as also a 'No Claim Certificate', yet it was equally true that the final bill submitted to the respondents had not been paid in full. At any rate, the question whether the signing of the final bill and the receipt of the amount against the same as also the signing of 'No Claim Certificate' would debar the petitioner- claimant from making any further claim, was a matter that could be left to be determined by the Arbitrator instead of being taken as a bar at the threshold for the reference of the disputes raised by the petitioner to arbitration.

It was also argued by Mr. Narula that since the respondents had failed to make an appointment within a reasonable time and infact, refused to do so, the power vested in the competent authority under Clause 70 of the Contract between the parties, should be deemed to have been exhausted entitling the Court to appoint an independent Arbitrator. On behalf of the respondents, it was argued by Ms. Puri that in the light of 'No Claim Certificate' signed by the petitioner-claimant and the receipt of the amount against final bills, nothing is left to be determined or adjudicated upon. At any rate, the appointment of Arbitrator itself need not be taken out of the purview of Clause 70 of the Contract, according to which a serving officer, having a degree in Engineering or equivalent alone, could be appointed as an Arbitrator to adjudicate upon the dispute(s) between the parties. Reliance was placed by the learned counsel upon the decision of this Court in M/s S.P. Construction Engineers and Govt.

Contractors V. Union of India and others. Arbitration Case No. 29 of 2006 disposed of on 4.2.2008 ,where in similar circumstances, Chief Engineer, Chandigarh, was directed to appoint an Arbitrator in terms of a Arbitration Case No. 111 of 2007 [3] similar clause appearing in the contract between the parties. There is, in my view, considerable merit in the submission made by Ms. Deepali Puri, Whether or not the 'No Claim Certificate' signed by the petitioner-claimant or the payment of the amount received by him towards the final payment under the final bill, would constitute a legal bar to the making of further claim by the contractor, is a matter that can in my opinion, be left for determination by the Arbitrator after hearing both the sides and having regard to the terms of the contract as also the law on the subject. That may not, therefore, disable this Court from issuing a direction to the respondents to appoint an Arbitrator in the facts and circumstances of the case.