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2001 DIGILAW 1433 (RAJ)

UOI v. AJAY CONSTRUCTION CO.

2001-09-11

PRAKASH TATIA

body2001
Judgment PRAKASH TATIA, J. ( 1 ) HEARD learned counsel for the parties. In this case, there is no dispuie with respect to the relevant facts. The contract is dated 28th August, 1993 between the applicant-respondent and non-applicant-appellant. As per the copy of the final bill the work commenced on 21st Sept. , 1993 and completed on 30th August, 1993. It is a case of the respondent-applicant that the respondent-claimant is entitled for seeking a direction from the court for appointment of the arbitrator because there arises a dispute between the parties because the appellant-non-applicant failed to make the payment as claimed by the applicant-respondent. ( 2 ) THE applicant-respondent submitted an application under Section 8 of the Arbitration and Conciliation Act, 1996 on the ground mentioned above. The appellant-non-applicant submitted a reply to the claim raised by the respondent-claimant by saying that since the applicant has accepted the payment of the final bill with clear receipt of full and final satisfaction of the claim, therefore, there is no dispute between the parties and no arbitrator can be appointed as the contract has come to an end. It is also submitted that the applicant has withdrawn the amount from the non-applicant-appellant without there being any protest. ( 3 ) THE learned trial court, after going through the submissions and the perusal of the relevant provision of law and the situation, held that the claimant before withdrawing the amount and before signing the full and final satisfaction receipt, the claimant raised his protest by letter dated 27th Feb. , 1995, which document is also not disputed by the appellant-non-applicant. The claimant also gave a notice dated 7th August, 1995 to the non-applicant-respondent. Therefore, the court below held that the claimant has not waived his right for the claim and, therefore, dispute survives and is referable to the arbitrator. Therefore, directed Chief Engineer to appoint the arbitrator by order of dated 6th July, 1999. The claimant also gave a notice dated 7th August, 1995 to the non-applicant-respondent. Therefore, the court below held that the claimant has not waived his right for the claim and, therefore, dispute survives and is referable to the arbitrator. Therefore, directed Chief Engineer to appoint the arbitrator by order of dated 6th July, 1999. ( 4 ) LEARNED counsel for the appellant vehemently submitted that in view of unequivocal admission of the claimant in this respect on the back of the final bill and on receipt for payment to the claimant that there is no claim of the claimant and the amount is being received in full and final satisfaction of the claim and there is no other demand of the claimant, the contract has come to an end and the claimant is estopped from raising dispute and seeking direction for appointment of the arbitrator. Learned counsel for the appellant relied upon the judgment of the Honble Apex court delivered in M/s. P. K. Ramaiah and Company v. Chairman and Managing Director, national Thermal Power Corpn. and the judgment of the Honble Apex Court delivered in Wild Life Institute to India v. Vijay Kumar garg wherein according to learned counsel for the appellant the Honble Apex Court held that voluntary and unconditional written acceptance of payment in full and final settlement of the contract debars the claimant from seeking relief of reference of dispute to the arbitrator. ( 5 ) LEARNED counsel for the respondent vehemently submitted that the claimant-respondent before signing the above receipt gave a letter dated 27th Feb. , 1995 to the appellant-non-claimant which is relevant and is quoted hereinbelow :"to, garrison Engineer (P) No. 1 jodhpur. Sub : C. A. No. CWE (A)/jodh/06 of 93-94 Completion of Incomplete works for 50 JCOS/300 ORS at jodhpur. Dear Sir, kindly find enclosed herewith the amendment No. 1 duly signed by us. We find that the financial effect has not been correctly calculated before arriving at the revised Deviation limit. Number of D. O. which were due to us have not been accounted for and the dos considered in the said Deviation limit have not been correctly priced, so many items have been left while preparing DOs. We find that the financial effect has not been correctly calculated before arriving at the revised Deviation limit. Number of D. O. which were due to us have not been accounted for and the dos considered in the said Deviation limit have not been correctly priced, so many items have been left while preparing DOs. In order to get the bill finalised at this belated stage, we have signed the amendment without any reservation, we however, reserve the right to claim the differences through other channels at later stage. Thanking your. Yours faithfully, for M/s. Ajay Constn. Co. Sd/-partner. Copy to-cwf (Army) Jodhpur-for information please. "therefore, according to learned counsel for the respondent when there was a protest already before the appellant-non-claimant then it cannot be said that above so-called certificate of full and final settlement of the claim was without protest from the applicant-respondent and the judgment cited by the learned counsel for the appellant has no application. ( 6 ) LEARNED counsel for the respondent relied upon the judgments of the Honble Apex court delivered in Damodar Valley Corporation v. K. K. Kaur and Union of India and Am v. M/s. L. K. Ahuja and Co. and, in addition to above submission that the payment was received under protest, learned counsel for the respondent submitted that even whether that was a receipt of full and final satisfaction estopping the claimant from raising dispute or claiming the amount is also the subject matter, which can be decided only by the arbitrator as the language employed in the arbitration clause between the parties is wide enough. The learned counsel for the respondent finds support from the judgment of the Honble Apex court of Damodar Valleys case (supra ). ( 7 ) IT is clear from the facts that there is no dispute with respect to the contract between the parties containing the arbitration clause. When a lawful agreement/contract is between the parties it becomes a sacrosanct document and binds the parties. The effect of sancrosanct document is that even a clause containing arbitration provision permits arbitrator to give award, which is executable like decree of a civil court and all the rights are decided by the arbitrator because of the agreement between the parties in the contract. The effect of sancrosanct document is that even a clause containing arbitration provision permits arbitrator to give award, which is executable like decree of a civil court and all the rights are decided by the arbitrator because of the agreement between the parties in the contract. Heere in this case, when there is no dispute with respect to the contract and arbitration clause then to exclude a person from invoking his right for seeking relief of appointment of arbitrator is required to be seen in the facts of the case and the exclusion of jurisdiction of arbitrator cannot be readily inferred. ( 8 ) THE document dated 27th Feb. , 1995 as quoted above, is a letter written by the applicant to the respondent stating very clearly that financial effect has not been correctly calculated before arriving at the revised deviation limit and also stated that number of D. O. , which were due to the claimant have not been accounted for and the DOs considered in the said deviation limit have not been correctly priced and so many items have been left while preparing DOs. Therefore, the correctness of the bill was disputed by the claimant. In addition to above the applicant very clearly mentioned that "in order to get the bill finalised at this belated stage, we have signed the amendment without any reservation, we however reserve the right to claim the differences through other channels at later stage". Therefore, by this letter not only the correctness was disputed but the claimant asserted his right to claim the amount and also shown his willingness of availing remedies available to the claimant applicant. After this letter dated 27. 2. 1995 the final bill was signed as stated by both the counsels on 28. 2. 95. I perused the copy of the final contract bill wherein there is a printed line which is as under :-"i/we have no further claim under this w. O. No. 1 and DON. 21013 beyond the net amount of this bill. "the next document relied upon is the receipt signed by the claimant-applicant, which is as under :"this payment is full and final settlement of all money due under CA No. . . . . . . . . . . . . . and have no further claim in respect of the W. O. No. . . . . . . . . . . . . . . . . . . . . . and have no further claim in respect of the W. O. No. . . . . . . . . . " ( 9 ) ACCORDING to learned counsel for the appellant the receipt was signed by the claimant-applicant without mentioning any protest, therefore, that receipt is also binding upon the claimant-applicant and the claimant-applicant could have mentioned his protest in order to the above two documents. When the claimant failed to make protest on these documents, he cannot ask for reference to the arbitrator. ( 10 ) 1 am unable to accept submission made by learned counsel for the appellant. In view of the judgment cited by both the counsels, the position of law is very clear that when there is an unequivocal and unconditional acceptance of the payment and if there is a unequivocal and unconditional waiver of right to claim any amount given in the receipt then it can be said that the claimant was satisfied with the claim and has no right to claim more than the amount given in the receipt or the bill. ( 11 ) HERE in this case, the relationship of the parties cannot be ignored. The appellant was in dominating position. The respondent-claimant was at receiving end. The money of the claimant was lying with the appellant. The claimant-applicant when in such a position gave a letter in writing to the appellant non-applicant raising dispute then it was the duty of the appellant-non-claimant to intimate the claimant-respondent that the appellant has rejected the protest or are not prepared to make payment in view of the protest and they have right to withheld the amount. Here in this case, if the appellants were fair enough, they should have mentioned this fact over the receipt specifically that the protest will not be permitted to carry on after getting the sign of the claimant over a receipt so that claimant could have come to know that in case he will sign the document even after his letter dated 27-2-95 he will lose his right to claim any amount and the contract will come to an end. Therefore, simply because claimant has signed the above two documents for final bill and receipt, the letter dated 27-2-95 cannot be ignored. Therefore, simply because claimant has signed the above two documents for final bill and receipt, the letter dated 27-2-95 cannot be ignored. The raising of dispute is sufficient by the claimant and submitting a protest is also sufficient and subsequent acceptance of the amount or signing a receipt itself cannot be said to be withdrawal of the earlier letter in each and every case. Here in this case, no reason has been shown what prevailed over the claimant so as to withdraw his protest immediately after writing letter dated 27-2-95. Therefore, the protest was in force at the time of signing the above final bill and the receipt. The learned trial court very carefully looked into the documents and rightly relied upon the judgment for holding that the claimant has not waived his right under the contract nor he has relinquished his claim nor the contract has come to an end between the parties. ( 12 ) IN view of the above discussion, 1 do not find any illegality in the order passed by the court below and the direction -issued by the learned trial judge, for issuance direction to the Chief Engineer, Jaipur to appoint arbitrator in accordance with the rules, is just and proper and in accordance with law. ( 13 ) THE Chief Engineer, MES is directed to appoint the arbitrator within one month from the date of receipt of this order and the respondent may supply the copy of the order to the concerned authority for appointment of the arbitrator. ( 14 ) IN view of the above observations the appeal of the appellant is dismissed. Appeal dismissed.