M/S Rakesh Kumar Jain vs. The General Manager

Held

The Court held that the Petitioner's claim for arbitration was not maintainable. The Court found it significant that the Petitioner did not raise any grievance regarding deductions in the final bill immediately after receiving payment on 24.01.2018. Instead, a letter dated 09.02.2018 was sent, thanking the Respondent for releasing the final bill and only raising a grievance concerning the release of the Performance Guarantee and Fixed Deposit Receipts. The Court noted that the Petitioner's plea of submitting the "No Claim Certificate" under compulsion was raised only in the rejoinder-affidavit, after the Respondent pointed it out. The Court reasoned that if the Petitioner genuinely had grievances about deductions, they would have been articulated soon after payment. The subsequent claim was considered an afterthought, especially in light of the "No Claim Certificate" and the letter dated 09.02.2018, which indicated voluntary acceptance of the payment. Therefore, the alleged dispute raised subsequently could not be entertained. The application was rejected.

Facts

M/s Rakesh Kumar Jain (Petitioner), a railway contractor, entered into a contract agreement with South Eastern Central Railway (Respondent) on 19.12.2014 for work valued at Rs. 8,74,72,604/-, to be completed by 12.10.2015. The final bill amount was paid to the petitioner on 24.01.2018, after which the petitioner issued a "No Claim Certificate." Subsequently, on 28.05.2018, the petitioner invoked the arbitration clause, claiming entitlement to Rs. 12,51,736/- due to illegal deductions, GST payment release, and compensation. The Respondent rejected the arbitration request, citing the "No Claim Certificate" and specific clauses in the contract excluding such matters from arbitration.

Key Issues

1. Whether the Petitioner's claim for Rs. 12,51,736/- is maintainable for arbitration, given the "No Claim Certificate" issued and the Respondent's reliance on Clause 43(2) and Clause 63 of the General Conditions of Contract, which allegedly exclude such claims from arbitration? Petitioner's contention: The Petitioner argued that the "No Claim Certificate" was submitted under duress, as it was a prerequisite for processing bills and receiving payment. Therefore, it cannot be construed as a voluntary acceptance of the final payment without demur. The Petitioner relied on the principle that a certificate given under compulsion does not preclude a party from raising disputes later. Respondent's contention: The Respondent contended that the arbitration request was rejected because the Petitioner had signed a "No Claim Certificate" in terms of Clause 43(2) of the General Conditions of Contract. Furthermore, the claim lodged was an "Excepted Matter" under Clause 63 of the General Conditions of Contract, which are specifically excluded from the arbitration clause. The Respondent argued that the Petitioner voluntarily accepted the payment and thanked the Respondent for releasing it, as evidenced by a letter dated 09.02.2018, and the subsequent claim was an afterthought.