.-.^IIS;^Jt^^1 ^i^-^?^ ^^v1^..... ^^••"" IN THE HON'BLE HIGH COURT OF CHHATTISGARH AT BILASPUR ARBITRATION APPEAL N0. ° 120Qf ^^ ^ C-P...1^/- fflt? APPELLANT: Applicant ^outh Eastern Coalfields Limited, through Chairman-cum-Managing Director, SECL, Seepat Road, Bilaspur (C.G.). Versus RESPQNDENT .Non-Applicant ^<> rs Niranjan Sarkar Contractors, A partnership firm registered under the Partnership Act,1956, Durga Bhawan, Tikrapara, Bilaspur (C.G.) v<-"" Appeal valued at Rs. 35-03 LoJ<K Court fee affixed Rs. I CTDT> ^ 6^ APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT.1996 ^- ^ r-f^ HIGHC^QURTQFCHHATTISGARHAT D.B.: Hon'ble Shri Justice Satish K. Aanihotri and Hon'ble Shri Justice Radhe Shyam Sharma Arbitration Appeal No.2 of 2009 Appellant Respondent versys South Eastern Coalfields Limited M/s Niranjan Sarkar Contractors Present: Dr. N.K.Shukla, Senior Advocate with Shri Shiv Shankar Tiwari, counsel for the appellant. Shri V.R.Rao, Senior Advocate with Shri A.K.Mishra, counsel for the respondent. Arbitration Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 ORAL ORDER (Passedon 21st June, 2011) Per Radhe Shyam Sharma, J.: This appeal is directed against the order dated 3-12-2008 passed by the 1 Additional District Judge, Bilaspur in M.J.C. No.28/08, whereby the application preferred by the applicant/appellant herein under Section 34 of the Arbitration and Conciliation Act, 1996 (henceforth 'the Act, 1996') has been rejected. 2. Case of the applicant/appellant, as stated in the memo of appeal, is that a notice inviting tender was issued by the Chief Engineer, Kurasia Colliery, Chirmiri for construction of 750 quarters for which the tender submitted by the respondent was accepted and an agreement was entered into between the parties on 8-3-1991 and as per the agreement any dispute, if arises, shall be dealt with as per -l^^'r- \^.^^ A'-^^ l^'^te^^t^. ^ ^M^^^f^. v:^s'»yy'-'^'"''*y'\ ^- ^y^y "^^,_ "T!'..^^' "'i^-?^^^: %>) the terms of the agreement and the Act, 1996. The construction of the houses was completed on 20-5-1992 and the possession ofthe said houses was taken-up by the appellant in August, 1994 and 106 quarters in May, 1995. Royalty clearance certificate was submitted by the respondent on 17-10-1994 and final bill was prepared by the appellant in January, 1994 and was finally paid on 12-1-1995. At the time offinal payment, the respondent had given a no claim certificate to the effect that the respondent has received the contracted sum of money to its full and final satisfaction. After receiving the final payment, the respondent served a notice to the appellant on 19-5- 1995 claiming a huge amount of money from the appellant. Therefore, the dispute was referred by the CMD, SECL to Shri J.P.Thakur, Chief Engineer (Civil), but being left the issue in abeyance by the sole arbitrator, the matter was referred to the High Court of Chhattisgarh and in Civil Revision No.48/2005 vide order dated 8-4-2005, Hon'ble Shri Justice K.L.Shrivastava was appointed as the sole arbitrator. The learned sole arbitrator awarded Rs.3.86 Lakhs against the claim of Rs.6.50 Lakhs towards 12 mm thick cement plaster. An amount of Rs.3 Lakhs has been awarded against escalation of cement prices and a sum of Rs.2.50 Lakhs has been awarded against items No.5 and 6 which were pertaining to use of 6 mm stone chips. In total, the learned sole arbitrator awarded Rs.35.03 Lakhs along with interest at the rate of 15% till 29-5-2005 and, as awarded, if the said amount will be deposited within 100 days, the amount of interest to be given will be 12%. Being aggrieved by the said award, the appellant preferred an objection/application under Section 34 ofthe Act, 1996 before the 1st .^- ^ Additional District Judge, Bilaspur on the ground that when the final payment has been received by the respondent upto its full and final satisfaction, there was no issue left to be decided by the arbitrator. The learned 1 Additional District Judge, Bilaspur rejected the objection/application of the appellant under Section 34 of the Act, 1996 holding that the award passed by the learned sole arbitrator is not in violation of the terms and conditions of the agreement entered into between the parties. •3. The non-applicant/respondent herein submitted in its reply before the Court below that the appellant has not been consistent with regard to its stand. Grounds taken by the appellant before the commencement of arbitration proceeding were given-up before the arbitrator. The grounds raised by the appellant before the 1st Additional District Judge have not been raised in appeal. On account of delay in settlement of final bill, market dues and other dues could not be cleared and this ha'd adverse effect on the health of Shrj Niranjan Sarkar, the principal partner of the firm/respondent. There was tremendous pressure on the respondent to clear pending dues, bank and market loans. The principal partner fell ill because of mental depression. As a result thereof, the respondent was compelled to sign final bill under coercion and duress with no claim certificate. It was further submitted that in order to get payment, the respondent was required to sign on dotted line. It was prayed that the appellant be called upon to tender proof of a single contractor to whom payment was made even after protest was made. The learned sole arbitrator was justified in holding that the claimant/respondent is entitled to press its all claims. Jurisdiction of the arbitrator is not stifled by any clause prohibiting award of interest. 4. The Court below, after hearing learned counsel appearing for the parties, rejected the application of the appellant under Section 34 of the Act, 1 996 holding that the order passed by the learned sole arbitrator is in accordance with Ihe terms and conditions of the agreement entered into between the parties. 5. Dr. N.K.Shukla, learned Senior Advocate appearing for the appellant argued that the application under Section 34 of the Act, 1996 cannot be decided by the Court of Additional District Judge. Principal Civil Court of originaljurisdiction in the District, i.e., District Judge alone gets the jurisdiction over the arbitral proceedings. Learned District Judge has no power to transfer the case to Additional District Judge. The learned Additional District Judge has no jurisdiction to deal with the application under Section 34 of the Act, 1.996, therefore, the impugned order passed by the learned Additional District Judge is without jurisdiction. Legrned Senior Advocate for the appellant further argued that the Court below did not consider the misconduct committed by tbe sole arbitrator in passing the award, which is beyond the scope of agreement. The award passed by the learned sole arbitrator is contrary to the terms and conditions ofthe agreement entered into between the parties. 6. Per contra, Shri V.R.Rao, learned Senior Advocate appearing for the respondent, reiterating the contentions raised by the respondent before the Court below, argued that the learned sole ^;.<Be-^ € ..-^ '%^,,^y (^ arbitrator is father of Shri Arvind Kumar Shrivastava, District Judge, Bilaspur (as then he was), therefore, Shri Arvind Kumar Shrivastava, the then District Judge, Bilaspur requested the Registrar General, High Court of Chhattisgarh, Bilaspur to transfer the case to another Judge. On this request, the case was transferred to the Court of1st Additional District Judge, Bilaspur. This fact was within the knowledge of the appellant and his counsel. He further argued that the learned 1 Additional District Judge, Bilaspur has rightly rejected the application of the appellant under Section 34 of the Act, 1996. Learned Senior Advocate supported the impugned order passed by the learned 1 Additional District Judge, Bilaspur. 7. We have heard learned counsel appearing for the parties and perused the record. We would first take-up the question of jurisdiction of the Additional District Judge. The appellant filed the application under Section 34 of the Act, 1996 before the District Judge, Bilaspur. Shri Arvind Kumar Shrivastava, District Judge, Bilaspur (as then he was) sent a letter of request dated 14-3-2008 to the Registrar General of this High Court for . transfer of M.J.C.No.28/2007 (South Eastern Coalfields Limited vs. M/s Niranjan Sarkar), wherein the objection under Section 34 of the Act, 1996 against the award passed by the sole arbitrator is to be decided on the ground that the sole arbitrator, who had passed the award, is his father. In view of the request, M.J.C.No.28/2007 was transferred to the Court of Shri S. Xess, 1st Additional District Judge, Bilaspur vide order dated 28-4-2008 passed by this High Court. Since the transfer order dated 28-4-2008 passed by this High Court &y was not chaltenged by the appettant and the appellant kept on appearing before the 1 Additional District Judge, Bilaspur in M.J.C.No.28/2007, therefore, the order dated 28-4-2008, transferring the case to the Court of 1st Additional District Judge, Bilaspur, attained finality. Thus, the 1 Additional District Judge, Bitaspur was very wetl competent and had jurisdiction to pass the impugned order. 8. Now the question which requires to be considered is asto whether after no claim certificate, further claim can be raised by the respondent. Learned counsel for the appellant argued that the respondent had submitted a no claim certificate before the appellant and has admitted receipt of payment to its full and final satisfaction, therefore, the award passed by the sole arbitrator is beyond his jurisdiction and on this ground only, the said award is liable to be dismissed. 9. In R.L. Kalathia and Company vs. State of Gujarat, (2011) ^ 2 SCC 400, the Hon'ble Supreme Court has observedin paragraphs 12and 13as under: "12. In National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267, the question involved was whether a dispute raised by an insured, after giving a full and final discharge voucher to the insurer, can be referred to arbitration. The following conclusion in SCC para 26 is relevant: (SCC pp. 284-85) "26. When we refer to a discharge of contract by an agreement signed by both the parties or by execution of a full and final discharge voucher/receipt by one of the \^ parties, we refer to an agreement or discharge voucher \^ which is validly and voluntarily executed. If the party ^ which has executed the discharge agreement or discharge voucher, alleges that the execution of such discharge agreement or voucher was on account of fraud/coercion/undue influence practised by the other party and is able to establish the same, then obviously the discharge of the contract by such agreement/voucher is rendered void and cannot be acted upon. Consequently, any dispute raised by such party would be arbitrable." 13. From the above conclusions of this Court, the following principles emerge: (/') Merely because the contractor has issued "no-dues certificate", if there is an acceptable claim, the court cannot reject the same on the ground of issuance of "no-dues certificate". - " (/7) Inasmuch as it is common that unless a discharge certificate is given in advance by the contractor, payment of bills are generally detayed, hence such a clause in the contract would not be an absolute bar to a contractor raising claims which are genuine at a later date even after submission of such "no-claim certificate". (///) Even after execution of futl and final discharge voucher/receipt by one of the parties, if the said party is able to establish that he is entitled to further amount for which he is having adequate materials, he is not barred from claiming such amount merely because of acceptance of the final bill by mentioning "without prejudice" or by issuing "no-dues certificate"." 10. In the aforesaid observations made by the Hon'ble Supreme Court, the law is well settled that no claim certificate is not conclusive when other claims have completely been ignored or the •^'\ S^S^ " ^i./ ^' g>r no claim certificate was granted under other adverse circumstances, not in normal course. In the case on hand, it appears that the no claim certificate was a part of printed form wherein he had to sign, without striking or deleting a part ofthe printed form. 11. In Delhi Development Authority vs. R.S.Sharma and Company, New Delhi, (2008) 13 SCC 80, the Hon'ble Supreme Court has observed as under: "17. The grounds/circumstances mentioned in sub- section (2) of Section 34 have been considered by this Couri: in various decisions. In Grid Corpn. of Orissa Ltd. v. Balasore Technical Sc/?oo/, (2000) 9 SCC 552, this Court in para 3 held as under: (SCC pp. 556-57) , "3. In this case, the High Court is of the view that a civil court does not sit in appeal against the award and the power of the court when an award is challenged is rather limited. The award of the arbitrator is ordinarily final and conclusive as long as the arbitrator has acted within his authority and accordfng to the principle of fair play. An arbitrator's adjudication is generally considered binding between the parties for he is a tribunal selected by the parties and the power of the court to set aside the award is restricted to cases set out in Section 30 of the Arbitration Act. It is not open to the court to speculate where no reasons are given by the .arbitrator, as to what impelted him to arrive at his conclusion. If the dispute is within the scope of the arbitration clause it is no part of the province of the court to enter into the merits of the dispute. If the award goes beyond the reference or there is an error apparent on the face of the award it would certainly be open to the court to interfere with such an award. ........." ,A£. ~'<^« ^ ltey:::^ v....^ ^s^Sia^^^ ^8 12. The ratio of law, as aforestated, makes it clear that the award of the arbitrator is ordinarily final and conclusive as long as the arbitrator has acted within his authority and according to the principle of fair play. An arbitrator's adjudication is generally considered binding between the parties for he is a tribunal selected by the parties. The question, now, arises for determination in the instant case, is whether the sole arbitrator exceeded his jurisdiction or has travelled beyond the agreement. 13. In the light of the above principles laid down by the Hon'ble Supreme Court and from the material on record, we are convinced that in the instance case, the award passed by the sole arbitrator is a well-reasoned and speaking award and was very well within his jurisdiction and there is no evidence on record that the arbitrator has exceeded his jurisdiction or has travelled beyond the agreement. Therefore, the impugned order passed by the learned 1s Additional District Judge, Bilaspur rejecting the objection/application of the appellant under Section 34 of the Act, 1996 does not suffer from any infirmity and does not call for any interference by this Court. Gdpal 14. Accordingly, the order under appeal, being unexceptionable, is affirmed and the appeal is dismissed. There shall be no order as to costs. Sd/- Satish K. Agnihotri Judge Sd/- R.S. Sharma Judge