Case: R.L. Kalathia &amp; Co Vs. State of Gujarat

Conditions of Contract, the same is meant to be a safeguard as against frivolous claims after final measurement. Having regard to the decision in Reshmi Constructions it can no longer be said that such a clause in the contract would be an absolute bar to a contractor raising claims which are genuine, even after the submission of such no-claim certificate.19. We are convinced from the materials on record that in the instant case the appellant also has a genuine claim which was considered in great detail by the arbitrator who was none other than the Counsel of the respondent Railways.” 8. In National Insurance Company Limitedv. Boghara Polyfab Private Ltd., VIII (2008) SLT 368=(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 para 26 is relevant: “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.” 9. From the above conclusions of this Court, the following principles emerge: (i) Merely because the contractor has issued “No Due Certificate”, if there is acceptable claim, the Court cannot reject the same on the ground of issuance of “No Due Certificate”. (ii) Inasmuch as it is common that unless a discharge certificate is given in advance by the contractor, payment of bills are generally delayed, 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”. (iii) Even after execution of full and final discharge voucher/receipt by one of the parties, if the said party able to establish that he is entitled to further amount for which he is having adequate materials, is not barred from claiming such amount merely because of acceptance of the final bill by mentioning “without prejudice” or by issuing ‘No Due Certificate’. 10. In the light of the above principles, we are convinced from the materials on record that in the instant case, the appellant/plaintiff also had a genuine claim which was considered in great detail by the trial Court and supported by oral and documentary evidence. Though the High Court has not adverted to any of the factual details/claim of the plaintiff except reversing the judgment and decree of the trial Court on the principle of estoppel, we have carefully perused and considered the detailed discussion and ultimate conclusion of the trial Judge. Though we initially intend to remit the matter to the High Court for consideration in respect of merits of the claim and the judgment and decree of the trial Court, inasmuch as the contract was executed on 5.6.1970 and work had been completed in August, 1973, final bill was raised on 31.3.1974 and additional claim was raised on 16.7.1976, to curtail the period of litigation, we scrutinized all the issues framed by the trial Court, its discussion and ultimate conclusion based on the pleadings and supported by the materials. The trial Court framed the following issues: “The following issues were framed at Ex. 16:1. Whether Plaintiff proves that he executed extra work of change and entitled to claim Rs. 3,600/-?2. Whether Plaintiff proves that he did extra work of C.O.T. filing and hence entitled to claim Rs. 1,800/-?3. Whether Plaintiff is entitled to claim Rs. 15,625/- in connection with excavated stuff?4. Whether Plaintiff is entitled to claim Rs. 7,585/- for guide bunds?5. Whether Plaintiff is entitled to claim Rs 5,640/- for pitching work?6. Whether Petitioner is entitled to claim Rs. 13,244/- for providing sand filter in river.?7. Whether Plaintiff is entitled to claim Rs. 1,375/- for waster weir back filling?8. Whether Plaintiff is entitled to claim Rs. 30,600/- for extra item of masonry?9. Whether Plaintiff is entitled to claim Rs. 14,339.84 for breach of condition and irregular payment?10. Whether Plaintiff is entitled to claim Rs 12,386.64 ps. for providing heavy gate?11. Whether Plaintiff is entitled to claim Rs. 1,37,478.17 ps for rising of prices?12. Whether Plaintiff is entitled to claim Rs. 30,000/- for establishment charges?13. Whether Plaintiff is entitled to claim Rs. 93,049.76 towards interest?14. Whether notice under Section 80 of the CPC is defective?15. Whether Plaintiff is estopped from filing suit in view of fact that he has signed and accepted bills prepared by Defendant?16. Whether suit is barred by time?17. Whether Court has jurisdiction to decide the present suit?18. What order and decree?” 11. We have already considered and answered the issue relating to No. 15 in the earlier paragraphs and held in favour of the plaintiff. In respect of other issues relating to execution of extra work, excavation, construction of guide bunds, pitching work, providing sand filter in river, waste weir back filling, extra masonary, providing heavy gate, additional amount due to raising of prices, additional amount towards establishment charges, interest etc., the trial Court based on the materials placed accepted certain items in toto and rejected certain claims and ultimately granted a decree for a sum of Rs. 2,27,758/- with proportionate costs and interest @ 6 per cent per annum from the date of the suit till realization. On going through the materials placed, relevant issues framed, ultimate discussion and conclusion arrived at by the trial Court, we fully agree with the same and the plaintiff is entitled to the said amount as granted by the trial Court.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]28. Further, necessitas non habet legem is an age-old maxim which means necessity knows no law. A person may sometimes have to succumb to the pressure of the other party to the bargain who is in a stronger position.A glance at the said clause will immediately indicate that a no-claim certificate is required to be submitted by a contractor once the works are finally measured up. In the instant case the work was yet to be completed and there is nothing to indicate that the works, as undertaken by the contractor, had been finally measured and on the basis of the same a no-claim certificate had been issued by the appellant. On the other hand, even the first arbitrator, who had been appointed, had come to a finding that no-claim certificate had been given under coercion and duress. It is the Division Bench of the Calcutta High Court which, for the first time, came to a conclusion that such no-claim certificate had not been submitted under coercion and duress.18. From the submissions made on behalf of the respective parties and in particular from the submissions made on behalf of the appellant, it is apparent that unless a discharge certificate is given in advance, payment of bills are generally delayed. Although, Clause 43(2) has been included in the General Conditions of Contract, the same is meant to be a safeguard as against frivolous claims after final measurement. Having regard to the decision in Reshmi Constructions it can no longer be said that such a clause in the contract would be an absolute bar to a contractor raising claims which are genuine, even after the submission of such no-claim certificate.19. We are convinced from the materials on record that in the instant case the appellant also has a genuine claim which was considered in great detail by the arbitrator who was none other than the Counsel of the respondent Railways.In National Insurance Company Limitedv. Boghara Polyfab Private Ltd., VIII (2008) SLT 368=(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 para 26 isWe have already considered and answered the issue relating to No. 15 in the earlier paragraphs and held in favour of the plaintiff. In respect of other issues relating to execution of extra work, excavation, construction of guide bunds, pitching work, providing sand filter in river, waste weir back filling, extra masonary, providing heavy gate, additional amount due to raising of prices, additional amount towards establishment charges, interest etc., the trial Court based on the materials placed accepted certain items in toto and rejected certain claims and ultimately granted a decree for a sum of Rs. 2,27,758/- with proportionate costs and interest @ 6 per cent per annum from the date of the suit till realization. On going through the materials placed, relevant issues framed, ultimate discussion and conclusion arrived at by the trial Court, we fully agree with the same and the plaintiff is entitled to the said amount as granted by the trial Court.