Delhi High Court
Pragati Construction ... vs Ministry Of Railways on 9 July, 2018
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment decided on: 09.07.2018
+ ARB.P. 835/2017
PRAGATI CONSTRUCTION CONSULTANTS
..... Petitioner
Through Mr. Sumit Bansal and Mr.
Udaibir Singh, Advs.
versus
MINISTRY OF RAILWAYS
..... Respondent
Through Dr. Chaudhary Shamsuddin
Khan, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J (ORAL)
1. This is a petition filed under Section 11 (6) of the
Arbitration and Conciliation Act, 1996 (in short 'the Act')
seeking appointment of an Arbitrator.
2. Upon notice being issued in the petition on 22.12.2017, a
reply has been filed by the respondent. The respondent's main
defence in the reply is that by virtue of accord and satisfaction
the contract stands discharged and that no dispute survives
regarding the outstanding amounts as claimed by the petitioner.
3. The record shows and there is no dispute with regard to
the fact that upon the principal contract being executed, the
petitioner received an aggregate sum of Rs.3,76,14,229/- over
different periods.
3.1 Furthermore, in addition thereto, the petitioner has been
paid another sum equivalent to Rs.7,55,558/- towards Price
Variation Clause (PVC).
3.2 These payments were, admittedly, made to the petitioner
on 29.11.2017.
4. As per the record, as presently placed before me, it is the
stand of the respondent that the work was completed way
beyond the time provided under the principal contract dated
30.11.2013 (in short 'principal contract').
4.1 According to the respondent, the work had to be
completed on or before 28.02.2014 i.e. six months from the date
of issuance of letter of acceptance. The bid filed by the
petitioner was accepted on 29.08.2013.
5. The petitioner claims that insofar as the extra works are
concerned, its additional claim had not been paid and, therefore,
the dispute with regard to the outstanding payments arose vis-à-
vis the respondent.
6. It is, however, not disputed that upon issuance of the
completion certificate and against the final bill No.115/08/17,
dated 19.8.2017, a further sum of Rs.11,40,486/- was paid to
the petitioner.
7. It also emerges, upon perusal of the record, that under the
principal contract, there is a provision under Clause 9.8 for
execution of a supplementary agreement.
7.1 In brief, the supplementary agreement is, broadly, in the
nature of a no claim certificate which the contractor, who, in
this case is the petitioner, was required to execute to secure
release of the sum of Rs.11,40,486/- against the final bill.
8. It is the case of the petitioner that it had no choice in the
matter, that is, it had to execute the supplementary agreement
dated 17.8.2017 as without execution of the same, the said sum
i.e. 11,40,486/-, would not have been released in its favour.
9. In other words, the plea advanced on behalf of the
petitioner is that there was coercion and duress exerted on the
petitioner to have the supplementary agreement executed.
10. On the other hand, Mr. Shamshudin, who, appears for the
respondent, says that a mere perusal of the supplementary
agreement would show that there is complete accord and
satisfaction and consequent discharge of obligations contained
in the subject contract.
11. I have heard the learned counsel for the parties and
perused the record.
12. To my mind, the only issue that arises before this Court
is: as to whether there is on record, material available to show
that there is accord and satisfaction. The most crucial document,
to come to this conclusion, one way or the other, is, in fact, the
supplementary agreement itself. A bare perusal of the
supplementary agreement would show that at the point where
the contractor i.e. the petitioner's representative has appended
his signature, there is an endorsement to the effect 'signed
under coercion and duress'. This endorsement, however, as is
evident, on a bare perusal, has been scored out.
13. In my view, this aspect of the matter will have to be
examined by the learned Arbitrator as parties would need to
lead evidence qua this issue.
13.1 That the Court is empowered to request the Arbitrator to
return a finding on this aspect of the matter is an aspect which is
clearly borne out from the dicta of the judgment of the Supreme
Court in National Insurance Company Limited v. Bhogra
Polyfab Private Limited, (2009) 1 SCC 267. This judgment has
been cited with approval by the Supreme Court in the case of
ONGC Mangalore Petrochemicals Limited v. Ans
Constructions Limited and Anr., (2018) 3 SCC 373.
14. I may also indicate, as would be evident from the dates
and events referred to hereinabove, that while the
supplementary agreement was executed on 17.08.2017, the
payment under the supplementary agreement, even as per the
respondent, was released on 29.11.2017 i.e. after the execution
of the supplementary agreement.
14.1 I may also note that it is the petitioner's case, though,
that the payments were released much later i.e. on 04.12.2017.
15. Be that as it may, the sense that I have, which is prima
facie in nature, is that there has been no genuine accord and
satisfaction. This observation, though, will be subject to the
parties leading the evidence and the learned Arbitrator coming
to a final conclusion in the matter.
16. Accordingly, in my view, the petition deserves to be
allowed. It is ordered accordingly.
17. Resultantly, Hon'ble Mr. Justice Badar Durrez Ahmad is
appointed as Arbitrator in the matter.
18. Parties agree that the arbitration proceedings can be
governed by the Rules and Schedule of fee prescribed by the
Delhi International Arbitration Centre (DIAC).
18.1 The said statement is taken on record.
19. Petition is disposed of in the above terms.
20. The Registry will dispatch a copy of this order to the
learned Arbitrator as well as the DIAC.
RAJIV SHAKDHER
(JUDGE)
JULY 09, 2018
A
