Orissa High Court
(Through Hybrid Mode) vs State Of Orissa And Another on 11 August, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.05 of 2014
(Through Hybrid mode)
Nilachakra Constructions .... Appellant
Mr. Santanu Kumar Sarangi, Senior Advocate
-versus-
State of Orissa and another .... Respondents
Mr. Tarun Kumar Pattanaik, Advocate
(Additional Standing Counsel)
CORAM: JUSTICE ARINDAM SINHA
ORDER
Order No. 11.08.2022
09. 1. This appeal was moved on 14th July, 2022, when it was
contended on behalf of appellant that price variation claim
under contract clause 44.2 awarded, was erroneously set aside
in the challenge. On behalf of respondent, impugned judgment
dated 20th January, 2014 was defended on contention that in
award dated 3rd October, 2009 itself there was record of
upward revision of estimated contract value from
Rs.1,54,90,884/- to Rs.1,75,44,698/-.
2. Mr. Sarangi, learned senior advocate appears on behalf
of appellant and had earlier pointed out, upward revision of
value of contract was on account of deviation.
3. Mr. Pattnaik, learned advocate, Additional Standing
Counsel submits, appellant had given clear undertaking of 'no
claim' in obtaining settlement and payment of final bill. He
could not thereafter make claim. He relies on judgment of the
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Supreme Court in United India Insurance Company
Limited v. Antique Art Exports Private Limited, reported
in (2019) 5 SCC 362, inter alia, paragraph 15. Said paragraph
is reproduced below.
"15. From the proposition which has been
laid down by this Court, what reveals is that a mere
plea of fraud, coercion or undue influence in itself
is not enough and the party who alleged is under
obligation to prima facie establish the same by
placing satisfactory material on record before the
Chief Justice or his Designate to exercise power
under Section 11(6) of the Act, which has been
considered by this Court in New India Assurance
Co. Ltd. case as follows: (SCC p.429, para 9)
"9. It is therefore clear that a bald plea of
fraud, coercion, duress or undue influence
is not enough and the party who sets up a
plea, must prima facie establish the same
by placing material before the Chief
Justice/his designate."
He submits, this declaration of law was pursuant to earlier
declaration in National Insurance Company Ltd. v.
Boghara Polyfab (P) Ltd., reported in (2009) 1 SCC 267.
4. Mr. Sarangi in reply submits, the arbitrator found from
the undertaking itself that his client had further claims, even
after settlement of final bill. He submits further, the appeal is
otherwise covered by order dated 12th July, 2022 passed in
ARBA no.4 of 2014 (parties' own case).
5. It appears from the award, issues were framed. They are
quoted below.
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"(i) Whether the Claimant is entitled to
balance unpaid work done of the value of
Rs.85,361/- ?
(ii) Whether the Claimant is entitled to
reimbursable price variation to the tune of
Rs.28,61,517/- ?"
(iii) Whether the Claimant is entitled to
compensation as claimed ?
(iv) Whether the Claimant is entitled to
interest as claimed ?"
The arbitrator went on to deal with the contention based on the
'No Claim Certificate' on extracting content of it in the award.
The extract is reproduced below.
"The CCE, KKAAPL has submitted the
Final Bill for the above noted work. I have
accepted the final measurements and final bills
certified by the CCE, KKAAPL & duly scrutinized
by E.U. I have no other outstanding claims.
The final bill along with other withheld
amount may be released at an early date."
6. The arbitrator relied on earlier judgments of the
Supreme Court in Union of India v. L.K. Ahuja, reported in
AIR 1998 SC 1172 and Damodar Valley Corporation v.
K.K. Kar, reported in AIR 1974 SC 158 on the question
being that while it is true, that on settlement of final bill, right
to get further payment gets weakend but, the claim subsists
and whether it does subsist is a matter which is arbitrable.
Furthermore, whether there was full and final settlement of a
claim under the contract is itself a dispute 'upon' or 'in
relation to' or 'in connection with' the contract. That being so,
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the arbitration proceeded on the question, depending on
contention raised by the parties in the Tribunal.
7. Facts in United India Insurance (supra) were that
there was a claim on an insurance policy, upon happening of
two fire incidents respectively on 25th September, 2013 and
25th October, 2013. Two claims were raised under the policy.
By mail dated 5th May, 2016 the insurer informed settlement
of the claims at Rs.2,81,44,413/- upon requisition made
therein of, inter alia, deposit of reinstatement premium and
execution of discharge voucher. The insured by reply of same
date said the insurer could deduct the reinstatement premium
from the settled claim and discharge voucher duly executed by
it and endorsed by the bank was attached for doing needful. It
is thereafter, the insured made queries regarding survey
consequent to the fire incident and obtaining information
raised claims. In those facts the Supreme Court said as quoted
in paragraph 15 above, regarding omission to render prima
facie satisfaction on the request for appointment of arbitrator
made and appointment of arbitrator by the High Court. The
case is clearly distinguishable on facts.
8. Issues arise at variance of pleadings. Even if claimant
had not pleaded fraud or coercion or undue influence or
dominant position of the employer regarding execution of the
'No Claim Certificate', respondent had denied the claim on
basis of the certificate and the arbitrator dealt with the
contention. It appears from the award that neither party
disputed arbitrability of claims by reason of the 'No Claim
Certificate' as could not be arbitrated on absence of plea of
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fraud, coercion or undue influence. As aforesaid, the arbitrator
already found that the claims, in spite of the certificate, were
arbitrable. He proceeded to arbitrate on the claims. This
appears to have happened also on the arbitrator having taken
view that the certificate itself, on the face of it, implied that
appellant had other withheld amounts already due to him.
9. For reasons aforesaid, the appeal succeeds. Impugned
order is set aside to that extent and the award claim restored.
10. The appeal is disposed of.
(Arindam Sinha)
Judge
RKS
