JUDGMENT T. Vaiphei, J. 1. This is an application under Section 11(6) the Arbitration and Conciliation Act, 1996, ('the Act') filed by the petitioner-company for appointment of an arbitrator to decide the following disputes: 1. Payment of final bill amounting to Rs. 39,70,500 (Rupees eighty-nine lakhs seventy thousand and five hundred) only, 2. Payment of cost of Rs. 19,50,000 (Rupees nineteen lakhs and fifty thousand only) for not making available by the respondent of the site rendering the labor and other resources of the petitioner lying idle, 3. Payment of interest amounting to Rs. 4,23,840 (Rupees four lakhs twenty three thousand eight hundred and forty) only by the respondent for retaining the bank guarantee for more than four years, 4. Payment of interest on the aforesaid amounts claimed calculated at the rate of 24% per annum from the date of issue of certificate of completion of work and further interest from the date of receipt of notice till payment, etc. 2. The facts prompting the petitioner to raise those disputes in an arbitral proceeding and to pray for the appointment of an arbitrator in connection therewith, as set out in the application, are that the petitioner-firm, which is engaged in the business of interior decoration, furnishing and engineering, submitted on 11.5.2004 its offer for the work of interior decoration of the offices of the respondent situate at Shillong, which was accepted by the respondent as per the letter of intent issued on 22.7.2004. The letter of award issued on 19.7.2004 by the respondent did not mention the amount of work to be executed, but the petitioner-firm proceeded to mobilize its labor and resources whereupon the respondent had to issue the work order on 11.8.2004. In terms of this work order, the payment was to be made on pro rata basis for the work actually done and approved by the Engineer-in-Charge, and the contract amount being fixed at Rs. 1,26,60,000 (Rupees one crore twenty-six lakhs and sixty thousand) only. The petitioner-firm by its letter dated 25.9.2004 objected to this amount on the ground that it had already agreed to execute the work order at the cost of Rs. 1,32,46,054.98p (Rupees one crore thirty two lakhs forty six thousand fifty four and paisa ninety-eight only) vide Annexure-A1. 1,26,60,000 (Rupees one crore twenty-six lakhs and sixty thousand) only. The petitioner-firm by its letter dated 25.9.2004 objected to this amount on the ground that it had already agreed to execute the work order at the cost of Rs. 1,32,46,054.98p (Rupees one crore thirty two lakhs forty six thousand fifty four and paisa ninety-eight only) vide Annexure-A1. Anyway, the time specified in the said work order for completion of the work was 90 days from the date of issue of the letter award dated 19.7.2004. According to the petitioner, the execution of the work was initially delayed by the non-availability of the site, which, in turn, was due to non-completion of the offices of the respondent. In the joint meeting held on 24.8.2004, the respondent made a commitment to hand over the site to the petitioner on 20.9.2004, but it failed to do so, which led to another such meeting on 4.12.2004 in which the respondent was stated to have promised to hand over the site in parts contrary to the terms of the contract as time was of the essence of the contract. As a result, the petitioner avers, it sustained heavy losses due to escalation in the costs of raw materials, for keeping labor idle, due to increase in overhead expenses, for loss of investment, etc. Confronted with these problems, the petitioner by the letter dated 6.11.2004 requested the respondent to extend the term of the contract by one year. 3. It is the further case of the petitioner that when the site was finally made available, the respondent submitted the detailed drawings, etc. which were found to be in considerable deviation from the quantity of the works mentioned in the letter of award and the work actually to be executed. In the joint meeting held on 24.8.2004, the respondent asked the petitioner-firm to submit the preliminary deviations for its approval, which it did but the respondent did not approve the same. According to the petitioner, during the execution of the work, there were several deviations which were made by the respondents with an ulterior motive, and the respondents also changed the scope of the work. The final deviation was given to the petitioner on 3.10.2007 which pertained to the final bill and the petitioner till date did not agree to the rates and quantities mentioned in the final deviation made by the respondent. The final deviation was given to the petitioner on 3.10.2007 which pertained to the final bill and the petitioner till date did not agree to the rates and quantities mentioned in the final deviation made by the respondent. The respondent had handed over the site in parts, which was against the terms of the contract, but the petitioner still cooperated with the respondent and executed the work in piece meal manner, which greatly increased the costs and other overhead expenses. As a result of this, the petitioner raised the running bills, which were paid by the respondent from time to time for the works actually done. It is also the case of the petitioner that the final amount after payment of the running bills came to Rs. 94,83,900.40p out of which the respondent released Rs. 6,23,706 so much so that the balance of Rs. 89,70,500 is yet to be received by the petitioner and that the respondent is all along enjoying the benefit of the bank guarantee issued by it for the full amount, the duration whereof has been repeatedly extended from time to time thereby causing additional monetary loss to it. The petitioner also states that during the defect liability period of 12 months from the date of completion of the work, no defect or shortcoming in the execution of the work was ever pointed out by the respondent to it, but then the respondent deducted a sum of Rs. 8,68,884.70p without any basis. The respondent also posed liquidated damages to the order of Rs. 1,26,600 upon the petitioner contrary to the terms of the contract. These developments compelled the petitioner to issue the letter dated 26.11.2007 (Annexure-A/15) calling upon the respondent to appoint an arbitrator as per Clause 18.0 of the contract dated 11.8.2004, but the respondent refused to do so. Hence, this application. 4. The respondent resisted the application of the petitioner and filed its written objection. These developments compelled the petitioner to issue the letter dated 26.11.2007 (Annexure-A/15) calling upon the respondent to appoint an arbitrator as per Clause 18.0 of the contract dated 11.8.2004, but the respondent refused to do so. Hence, this application. 4. The respondent resisted the application of the petitioner and filed its written objection. The case of the respondent is that the claim of the petitioner that it incurred losses for the delay in executing the work is imaginary and an afterthought and that if it had been really confused as to how to proceed with the work because of the methodology to be adopted and the deviations made as per requirement of the contract, it is now too late in the day to raise such objection, particularly, when it had submitted the "No Demand Certificate" on 24.7.2007 certifying that it had received all the payments due to them out of the contract in question and that it had no claim whatsoever pending with the respondent in connection with the said contract. Though the defect liability period for the contract in question was over on 31.5.2007, once extension was granted to the petitioner for completion of the work, time was no longer of the essence of the contract. The answering respondent flatly denies that a sum of Rs. 89,70,500 is pending for payment. It is pointed out by the respondent that the value of the work contracted was to the tune of Rs. 1,26,60,000, and not Rs. 1,32,46,054.98 as claimed by the petitioner, a fact which is reinforced by the Bank Guarantee of the value of Rs. 8,83,000 on the amount of Rs. 1,26,60,000 furnished by the petitioner. It is also asserted by the respondent that the petitioner deliberately suppressed the material facts that the Bank Guarantee was returned to the petitioner on 2.1.2008 prior to the filing of this application and that it had issued the "No Demand Certificate". It is thus submitted that the notice dated 26.11.2007 issued by the petitioner is uncalled for. The respondent also denies that it compelled to the authorized representative of the petitioner to accept the amount of Rs. It is thus submitted that the notice dated 26.11.2007 issued by the petitioner is uncalled for. The respondent also denies that it compelled to the authorized representative of the petitioner to accept the amount of Rs. 6,23,706 as full and final payment of the liabilities of the respondent-corporation by threatening that in the event of failure on the part of the representative of the petitioner to sign the "No Demand Certificate", the Bank Guarantee would stand forfeited together with the amount payable to it under the final bill. The respondent also categorically denies that the signature of the authorized representative of the petitioner-firm was obtained by its officials under duress or that the signature of the representative was obtained by the respondent on some blank papers. Submitting that the petitioner does no make out any case for the interference of this Court, the respondent prays for summary dismissal of the application with costs. 5. In the reply-affidavit filed by the petitioner, it denies the execution of the said "No Demand Certificate" and asserts that when the respondent did not clear the final bill amount for more than 18 months after the completion period thereby putting to grave financial condition, the final bill was unilaterally settled by the respondent. It is reiterated that the respondent compelled and forced its authorized representative to execute the said "No Demand Certificate" on the pain of forfeiture of the Bank Guarantee as well as the amount which they were paying to it under the final bill. In other words, according to the petitioner, its representative was forced to execute the "No Demand Certificate" under undue influence and/or coercion inasmuch as if the "No Demand Certificate" were not executed, the final bill would not have been paid to it Alternatively, the petitioner claims that the "No Demand Certificate" is no document in the eye of law as the same was executed by an incompetent person. 6. The sole question which falls for consideration in this application is whether, on the facts and circumstances of the case this Court can appoint an arbitrator to adjudicate the disputes raised by the petitioner. 6. The sole question which falls for consideration in this application is whether, on the facts and circumstances of the case this Court can appoint an arbitrator to adjudicate the disputes raised by the petitioner. The power of this Court to appoint an arbitrator under Section 11(6) of the Act and the manner in which the appointment of an arbitrator is to be made, and the principles to be followed for such appointment, are no firmly settled by the constitution Bench of the Apex Court in SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 . It is held therein that while exercising the power under this section, the Chief Justice or his designate has to consider whether the conditions laid down by the section for the exercise of that power or the conditions for performance of that duty exist. Unless the Chief Justice (or his designate) satisfies himself that the conditions for the exercise of the power exist, he could not accede to a request made to him for the exercise of the conferred power. While exercising such powers, the chief justice or his designate shall necessarily have to decide (i) whether has jurisdiction to entertain the request, in the sense, whether the party making the motion has approached the right High Court, (ii) whether there is a valid arbitration agreement in terms of Section 7 of the Act, (iii) whether the person before him with the request is a party to the arbitration agreement, (iv) whether there was no dispute subsisting which is capable of being arbitrated upon, (v) whether the claim is a dead one; or a long barred claim that is sought to be resurrected, (vi) whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection and (vii) if an arbitrator is to be appointed, who is the fit person, in terms of the provision. These are adjudications which affect the rights of parties. Merely because the main purpose under the section is the constitution of an Arbitral Tribunal, it cannot be taken that the exercise of power therein is an administrative power. These are adjudications which affect the rights of parties. Merely because the main purpose under the section is the constitution of an Arbitral Tribunal, it cannot be taken that the exercise of power therein is an administrative power. The Apex Court further holds therein that it is also not correct to say that by the mere constitution of an Arbitral Tribunal the rights of the parties are not affected and that dragging a party to an arbitration where there existed no arbitration agreement or when there existed no arbitrable dispute, can certainly affect the right of that party and even on monetary terms, impose on him a serious liability for meeting the expenses of the arbitration, even if it be the preliminary expenses and his objection is upheld by the Arbitral Tribunal. Therefore, it is crystal clear that the function of the chief justice (or his designate) is not to act as the post office between the party making the request for arbitration and the arbitral tribunal; it cannot thus be said that once such a request is made, the chief justice is under ah obligation to pass an order for appointing an arbitrator like a rubber stamp. 7. It is against the backdrop of the legal principles laid down by the Apex Court that I propose to examine the instant case. The admitted position of the parties is that the No Demand Certificate was executed on 24.7.2007, though the petitioner has raised a dispute that it was either executed by its representative under duress or the document was, at any rate, executed by its official who had no authority or competence to execute a document of such nature. It is also not in dispute that the notice to the respondent to appoint an arbitrator to decide the disputes raised by it was issued on 14.2.2008. This was followed by its letter dated 15.2.2008 addressed to the Chief Vigilance Officer of the respondent, which, among others, requested him to direct the ED(NR) for appointment of an arbitrator. The question which calls for consideration is whether the petitioner has made out a prima facie case that the "No Demand Certificate" was executed by its representative under duress/coercion/undue influence or whether the document in question was executed by its official without having the competence to execute the same? The question which calls for consideration is whether the petitioner has made out a prima facie case that the "No Demand Certificate" was executed by its representative under duress/coercion/undue influence or whether the document in question was executed by its official without having the competence to execute the same? At this stage, it will not be out of place to refer to the disputed "No Demand Certificate", which is as under: "NO DEMAND CERTIFICATE" CONTRACTOR (TO BE ISSUED BT CONTRACTOR) Name of Package Interior Decoration Work of RHQ Lapalang, Shillong Letter of Award/Contract No. & Date NESH/CSM/08/871/583 dated 11.8.2004 Name of Contract M/s MAC Associates, New Delhi Project POWER GRID Township, Lapalang, Schillong. This is to certify that we have received all payments due to us in respect of the above referred LOA/Contract and we have no claim whatsoever pending with POWER GRID for this contract. We further confirm that we shall have no claim against this contract in future also. GAUHATI LAW REPORTS Date Signature Sd Illegible 20.7.2007 Place Name Siddhinath Yadav Designation Supervisor (Not below Manager) Through Name Illegible Designation.... (Not below the Chief Manager) (Italics mine) 8. The No Demand Certificate reproduced in the foregoing, assuming the same to be valid, evidently shows that the petitioner-company acknowledged the received of all payments due to them in connection with the work in question; that they had no claim present or future claim against the respondent on the date of execution of the document in question. If this be correct factual position, the instant application filed by it is liable to be rejected at the very threshold as there is no arbitrable dispute. Since the petitioner is making a case that the "No Demand Certificate" was executed by its representative under coercion or was executed by its official having no competence, I have taken the pain of going through the materials on record including the contemporaneous documents and correspondences exchanged between the parties. In this context, the letter dated 23.8.2007 issued by the Chief Manager (C&M), Power Grind Corporation Ltd., North Eastern Region (Annexure-A/13) is interesting and illuminating and is reproduced thus: REF: NESH/CSM/08/871/1008/650 Dated 23 August, 2007 To, M/s MAC Associates H-30, L.G.F, Kailash Colony New Delhi-110048 Kind Attn: Shri U.C. Mac Sub: Final Time Extension against the contract for Interior Decoration Work of RHQ Building at Lapalang, Shillong. Ref: (1) LOA No. NESH/CSM708/S71/15S3 dated 11.8.2004. Ref: (1) LOA No. NESH/CSM708/S71/15S3 dated 11.8.2004. (2) Your Letter No. MAC: PGCIL: SLG: 2006-07: 856 dated 27.6.2007. Dear Sirs, 1.0 In reference to the above, final time extension for completion of the subject contract as per the actual work completion date is accorded up to 15.5.2006. 1.1 We would like to inform you that the final time extension as accorded up to 15.05.2006 is with imposition of token Liquidated Damages of Rs. 1,26,600.00 (Rupees One Lakh Twenty-six Thousand Six Hundred only) and waiver of the balance amount. However, no price variation shall be paid in the extended period and POWERGRID shall not have any additional liability and/or obligation during the extended period. It may also be noted that the extension of the completion schedule does not mean that POWERGRID have accepted the actual completion schedule as contractual completion schedule and therefore, POWERGRID shall not, entertain any claim whatsoever on this account. 2.0 Save and except the above, all other terms and conditions of the contract and its subsequent amendment shall remain unchanged. 3.0 This letter is being issued to you in duplicate. Duplicate copy may please be returned to us duly signed and stamped as taken of acknowledgement within 15 days. Thanking you. Yours faithfully, Sd/- D.D. Basumatary Ch. Manager (C&M). The aforesaid letter speaks of final extension against the Contract for Interior Decoration Work of RHQ Building at Lapalang, Shillong apparently with reference to the letter of the petitioner-company dated 27.6.2007. However, this letter, which is dated 23.8.2007, nowhere mentioned the execution of the "No Demand Certificate" allegedly executed by the petitioner. Nor did it make any whisper of allegation that the petitioner company by virtue of the "No Demand Certificate" executed by it was barred from making any claim for payments from them in connection with the works contract in question. On the other hand, if the petitioner had requested extension of time for execution of the contract in question in its letter dated 27.6.2007 and if such request was neither rejected nor accepted by the respondents, there is no evidence to that effect, it is highly doubtful as why the petitioner could have executed the "No Demand Certificate" within a month or so of making the request for extension of time. Be that as it may, the questions whether the "No Demand Certificate" was executed by the petitioner-company and whether this, ipso facto, would operate as bar against its claim, will prima facie constitute arbitrable disputes. At any rate, in the absence of any plea by the respondent in the letter dated 23.8.2007 about the execution of the "No Demand Certificate", it cannot be safely concluded that the pities had concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payments without protest. It will thus be not possible at this stage to decide whether the live claim made is one which comes within the purview of the arbitration clause; it will be more appropriate to leave that question to be decided by an arbitral tribunal by taking evidence, along with the claims involved in the arbitration. 9. Refuting the contention of Mr. M.Z. Ahmed, the learned senior Counsel for the respondent that the execution of the "No Demand Certificate" by the official of the petitioner has sealed the fate of the petitioner-company with respect to its claim and that the principle of estoppel operates as a bar against the application for referring the disputes raised by them before an arbitrator, Mr. D. Senapati, the Learned Counsel for the petitioner, heavily relies on the decisions of the Apex Court rendered in (1) Chairman and M.D., NTPC Ltd. v. Reshmi Constructions AIR 2004 SC 1330 and (2) Union of India v. L.K. Ahuja and Co. AIR 1988 SC 1172 on the legality of appointing an arbitrator in a case of this nature. L.K Ahuja (supra) was a case where four agreements were entered into between the contractor and Union of India for the construction of certain quarters. All the contracts were executed and completed by the contractor on diverse dates. The contractor accepted the four final bills and gave no claim declaration in respect of the four contracts. The contractor thereafter wrote a letter to the Additional Chief Engineer stating that certain amount was due on account of the work executed and requested him to refer the dispute to the arbitrator. The Additional Chief Engineer rejected the request contending that there was no dispute between the parties. The contractor thereafter wrote a letter to the Additional Chief Engineer stating that certain amount was due on account of the work executed and requested him to refer the dispute to the arbitrator. The Additional Chief Engineer rejected the request contending that there was no dispute between the parties. Thereupon, the applicant made the claim for reference within three years (i.e., under the Arbitration Act, 1940) and, subsequently, an application was filed under Section 20, which was rejected by the trial court holding that it had no jurisdiction under Section 20 as the applicant had accepted full and final payment without making any claim declaration in respect of the same. When the matter finally reached the Apex Court by special leave, the top court held that it is true that on completion of the work, right to get payment would normally arise and it is also true that on settlement of the final bill, the right to get further payment gets weakened but the claim subsists and whether it does subsist, is a matter which is arbitrable. 10. In R.C. Builders and Contractors (supra), the material facts of the case are that upon-completion of the work, the respondent-contractor submitted final bill which was allegedly not accepted by the appellant-corporation whereafter they themselves prepared the final bill and forwarded the same along with a printed format being a "No Demand Certificate". The "No Demand Certificate" was signed by the respondent. However, on the same day a letter was written by the respondent to the appellant stating that they were signing the alleged final bill under coercion, under undue influence and under protest only without prejudice to their rights and claims whatsoever. There was no accord and satisfaction between the contracting parties. Thus disputes as regards final bill arose prior to its acceptance thereof in view of the fact that the same was prepared by the respondent but was not agreed upon in its entirety by the appellant. The appellant had not pleaded that upon submission of the final bill by the respondent, any negotiation or settlement took place as a result whereof the final bill, as prepared by the appellant, was accepted by the respondent unequivocally and without any reservation therefore. The appellant never made out a case that any novation of the contract agreement took place or the contract agreement was substituted by a new agreement. The appellant never made out a case that any novation of the contract agreement took place or the contract agreement was substituted by a new agreement. The conduct of the appellant would show that on receipt of the notice of the respondent through its advocate the same was not rejected outright but existence of disputes was accepted and the matter was sought to be referred to the arbitration. Only when the clarificatory letter was issued, the plea of settlement of final bill was raised. Thus the finding of the High Court that a prima facie case in the sense that there are triable issues before the arbitrator so as to invoke the provisions of Section 20, cannot be said to be perverse or unreasonable so as to warrant interference by the Apex Court in exercise of extraordinary jurisdiction under Article 136 of the constitution of India. This is what the Apex Court at paras 26 and 27 of the judgment: 26. Even when rights and obligations of the parties are worked out the contract does not come to an end inter alia for the purpose of determination of the disputes arising thereunder, and, thus, the arbitration agreement can be invoked. Although it may not be strictly in place but we cannot shut our eyes to the ground reality that in the cases where a contractor has made huge investment, he cannot afford not to take from the employer the amount under the bills, for various reasons which may include discharge of his liability towards the banks, financial institutions and other persons. In such a situation, the public sector undertakings would have an upper hand. They would not ordinarily release the money unless a "No Demand Certificate" is signed. Each case, therefore, is required to be considered on its own facts. 27. Further, necessitas non-habet legen is an old age maxim which means necessity knows no law. A person may sometimes have to succumb to pressure of other party to the bargain who is on a stronger position. 11. In the instant case, the notable facts are that the petitioner did not immediately lodge a complaint with the respondent corporation stating that the "No Demand Certificate" was signed by its official under coercion/undue influence, and therefore, could not accept the same but then it is their case that no such certificate was executed by them. 11. In the instant case, the notable facts are that the petitioner did not immediately lodge a complaint with the respondent corporation stating that the "No Demand Certificate" was signed by its official under coercion/undue influence, and therefore, could not accept the same but then it is their case that no such certificate was executed by them. Alternatively, it is pleaded by them that the certificate was executed by their official under duress or by their official who has no competence. However, the fact that the petitioner sought for final extension of time in their letter dated 27.6.2007 is quite incompatible with the possibility of their executing the "No Demand Certificate" on 20.7.2007. It must be remarkable contractor to seek for extension of time for completing the contract on 27.6.2007 and then proceeded to execute a "No Demand Certificate" within a month or so thereafter, that too, even before the respondents took a decision on their request for extension of time thereby disclaiming any payment out of the contract. Nevertheless, what clinches the issue in favor of the petitioner is the absence of any reference by the respondents in the letter dated 23.8.2007 to the execution of the "No Demand Certificate" by the petitioner-company. Prima facie, if the "No Demand Certificate" was actually executed by the petitioner as alleged by the respondents, this must have found a place in that letter communicated to the petitioner within a month or so of the execution thereof. On the facts thus found by me, I am of the opinion that the ratio laid by the Apex Court in Reshmi Constructions (supra) and R.C. Builders and Contractors (supra) are broadly applicable to the facts of the instant case. The petitioner is thus entitled to a reference of the disputes raised by them before the arbitral tribunal. 12. The result of the foregoing discussion is that this application succeeds. I hereby appoint the Hon'ble Mr. Justice D. Biswas, a retired judge of this Court, to act as the sole arbitrator, subject to his consent and on such terms as he fixes, to adjudicate the disputes raised by the petitioner in this application. Needless to say, nothing stated in the foregoing paragraphs shall be construed as observations on the merits of the case, and the arbitrator is to decide all aspects of the disputes independently. Needless to say, nothing stated in the foregoing paragraphs shall be construed as observations on the merits of the case, and the arbitrator is to decide all aspects of the disputes independently. Both the parties shall approach the sole arbitrator for the arbitral proceeding of the reference within a month from today. There shall be no order as to costs for this application. Application allowed.