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B.D. Chawla Vs. Union of India - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit No. 70A of 1982
Judge
Reported in1984RLR421
ActsArbitration Act, 1940 - Sections 20
AppellantB.D. Chawla
RespondentUnion of India
Advocates: P.N. Kumar and; B.D. Sharma, Advs
Cases ReferredS.C. Konda Reddy v. Union of India
Excerpt:
the case questioned whether the petitioner was entitled to get the amount claimed for work executed for extra period under section 20 of the arbitration act, 1940, related to contract for the sewerage work - it was stated that the matter should be decided by the arbitrator - it was observed that no claim certificate was issued and demand certificate was not signed by the petitioner under pressure - also if in case any document had been executed under the undue influence or force, it would have no effect - thereforee, the court directed the respondents to appoint an arbitrator - .....for which payment has not been made. it is not disputed that the correctness of the entries in the measurement books cannot be challenged in the arbitration proceedings. clause 45 provides for recording of entries in the measurement books and the rights of the contractor if he objects to any of the entries. the decision contained in clause 45a is one of the excepted matters provided by clause 63. thereforee, the petitioner has no jurisdiction to challenge in the arbitration proceedings the correctness of the entries made in the measurement books. if there have been wrong entries made or some measurements have been omitted, then it was open to the petitioner to take recourse to the proceedings provided by clause 45. the arbitrator thereforee, while deciding this claim, will have to assume.....
Judgment:

B.N. Kripal, J.

(1) In order to decide whether any of the disputes fall within the excepted matters or not, reference may be made to clause 63. The said clause reads: (.....) This clause can be divided into two parts. The first part states that all disputes and differences of any kind whatsoever which arise between the parties out of or in connection with the contract will be referred by the contractor to the Railway which shall give a decision within a reasonable time. The first part of clause 63 has to be read along with clause 64 which provides for all disputes being referred to arbitration except those which are excepted matters referred to in clause 63. The excepted matters, which are outside the pale of clause 64 are contained in the second part of clause 63. The excepted matters are those which are decisions for which provisions have been made in clauses 18, 22(5), 39, 45A, 55, 55-A(5), 61(2) and 62 XIII(B) (c)(b)ofthe General conditions of contract or the decisions which are provided in any of the clauses in the said conditions of contract. The second part of clause 63 states that such decisions shall be deemed to be excepted matters and the decisions so given are final and binding on the contractor and are outside the purview of the arbitration clause.

(2) Coming to the various disputes which are sought to be raised in the present case, the contention of Shri Shar is that the allegations made by the petitioner are vague. It is true that some of the allegations made are vague, but one can identify the nature of the dispute which is sought to be raised.

(3) The first claim which is of rupees one lac is with regard to the work which is alleged to have been done but for which payment has not been made. It is not disputed that the correctness of the entries in the Measurement Books cannot be challenged in the arbitration proceedings. Clause 45 provides for recording of entries in the Measurement Books and the rights of the contractor if he objects to any of the entries. The decision contained in clause 45A is one of the excepted matters provided by clause 63. thereforee, the petitioner has no jurisdiction to challenge in the arbitration proceedings the correctness of the entries made in the Measurement Books. If there have been wrong entries made or some measurements have been omitted, then it was open to the petitioner to take recourse to the proceedings provided by clause 45. The arbitrator thereforee, while deciding this claim, will have to assume that the entries made in the Measurement Books are correct. It will be open to the petitioner to satisfy the arbitrator that payments have not been made to him on the basis of the entries made in the Measurement Books. If the petitioner is able to establish this, then, of course, he may be entitled to payment, otherwise he cannot get any payment in respect of work stated to have been done, but which is not recorded in the Measurement Books. The dispute raised in claim No. 1 is, thereforee, referred in the aforesaid terms.

(4) With regard to claim No. 2, it is stated by Mr. Kumar at the Bar that the claim for Rs. 3,85,000.00 is really not on account of bailing out water. His claim really is that the schedule of rates provides that with regard to excavation of soil below the sub-soil water payment at the rate of Rs. 0.00 per C.U.M. (Rs. 2.00 per cubic meter) extra is to be made. The claim, in other words, is not in respect of bailing out water from the trenches while excavating the soil. It is not disputed that claim for bailing out of water would be regarded as an extra item coming u/clause 39 of the General Conditions of Contract and would be one of the excepted items. The claim, in other words, is that payment in respect of soil so excavated from below the sub-soil water has not been made according to the rates as prescribed in the schedule of rates. To that extent the dispute is referable to arbitration.

(5) The third claim is in respect of shortpayment against the work of concoction of road. It is alleged that payment has been made in part, but full payment has not been made. Here again the position is same as regards claim No. 1. It is not open to the petitioner to challenge the correctness of the entries made in the Measurement Books but it will be open to the petitioner to show to the arbitrator that he has not been paid according to the measurements as recorded in the Measurement Books and in accordance with the terms of the contract.

(6) Claim No. 4 is in respect of recoveries which are alleged to have been made by the respondents. The respondents state that they have made recoveries only to the tune of approximately Rs. 4400.00. The petitioner, however, claims that Rs. 10,000.00 have been deducted. It cannot be said that this dispute falls under the category of 'excepted maters. thereforee, this has also to be referred to arbitrator.

(7) Claim No. 5 for rupees one lac is on account of, as contended by the petitioner, the work being unnecessarily prolonged due to the fault of the respondents. It is contended by Mr. Sharma that according to clause 17 (3) it is open to the authorities to extend time for the completion of the contract and the contractor cannot claim any damages or compensation in respect thereof. It is further submitted by him that the contractor having accepted the extension of time without reserving any right to claim damages, he is debarred from such a claim and the claim does not arise from the contract. A similar question had arisen in the case of Shri Sita Ram Goel v. U; ion of India, Suit No. 1298-A of 1979 decided on May 6, 1981. There also it was held by J.D. Jain, J. that as such a claim cannot be regarded as falling under the excepted items, the same had to be referred to the arbitrator. The reference to clause 17 (3) by Mr. Sharma may be relevant, and may be a complete answer to the claim of the petitioner, but all that I have to see at this stage is whether this claim arises out of the contract or not. The contract provided for the work being completed within a stipulated period. The execution of the work was prolonged. According to the petitioner it was due to the fault of the respondents that the work had to be executed for an extra period of 15 months. Whether the petitioner is entitled to claim this amount, in view of the provisions of clause 17 (3) and of the various provisions of the Contract Act, is a matter to be decided by the arbitrator. This is a claim which is being put forth by the petitioner and is being denied by the respondents. thereforee, it can be said to be a dispute arising out of the contract which has to be referred, as the same admittedly does not fall under the category of 'excepted matters'.

(8) Claim Nos. 6 and 7 are a sequel to the aforesaid claims and, thereforee, the same have to be referred to the arbitrator. It will be open to the petitioner to claim these amounts before the arbitrator who will decide them according to law.

(9) It was contended by the learned counsel for the respondents that a no claim certificate having been given by the petitioner, the disputes cannot be referred. It has been consistently decided by this Court that in a case where it is alleged that no claim certificate was given under coercion, and such is the allegation in the present case, then this question can be decided by the arbitrator, and not by the Court, in view of the arbitration agreement between the parties. Reference in this connection may usefully be made to the cases of R.D. Gupta v. Union of India, S. No. 193-A/77 D./9.4.79, LA. No. 1019 of 1977 in S. No. 250-A/77 D./25.5.77 and Arm Const. Co. v. Union of India, 1980. Rajdhani Law Reporter 307. Mr. Sharma has, however, drawn my attention to a Division Bench authority of Karnataka High Court reported as S.C. Konda Reddy v. Union of India, Air 1982. Kar. 50. It was observed in that case as follows :-

'We may first clear the ground on the last contention urged by learned Advocate General. If, as contended by him that the appellant had given a 'No Claim Certificate', then the matter ends there. Certainly he was not entitled to claim further payment in view of Clause 43 (2) of the agreement......'.

(10) There can be no dispute with the aforesaid observations, provided the no claim certificate was given voluntarily and without any coercion. If any document had been executed under undue influence or coercion, then it will have no effect. That is why it will be for the arbitrator to find out whether the No-Claim Certificate was signed by the petitioner as a result of coercion or under duress. If it was not signed under coercion or duress, then possibly the provisions of clause 43 would be attracted.

(11) The petition is, thereforee, disposed of in the aforesaid terms. The respondents are directed to appoint the arbitrator in accordance with clause 64 within three months from today. Parties to bear their own costs.


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