Case: Chairman &amp; M.D., N.T.P.C Vs. M/S. Reshmi Constructions,Builders&amp;Cont

as thereby waived or lost, except in so far as may be expressly conceded or decided. See, also Dismissal Without Prejudice.Similarly, in Whartons Law Lexicon the author while interpreting the term without prejudice observed as follows:The words import an understanding that if the negotiation fails, nothing that has passed shall be taken advantage of thereafter; so, if a defendant offers, without prejudice to pay half the claim, the plaintiff must not only rely on the offer as an admission of his having a right to some payment.The rule is that nothing written or said without prejudice can be considered at the trial without the consent of both parties - not even by a Judge in determining whether or not there is good cause for depriving a successful litigant of costs - The word is also frequently used without the foregoing implications in statutes and inter partes to exclude or save transactions, act and rights from the consequences of a stated proposition and so as to mean not affecting, saving or excepting.In short, therefore, the implication of the term without prejudice means (1) that the cause or the matter has not been decided on merits, (2) that fresh proceedings according to law were not barred." 36. The appellant has in its letter dated 20th December, 1990 has used the term without prejudice. It has explained the situation under which the amount under the No Demand Certificate had to be signed. The question may have to be considered from that angle. Furthermore, the question as to whether the respondent has waived its contractual right to receive the amount or is otherwise estoppel from pleading otherwise will itself be a fact which has to be determined by the arbitral tribunal). 37. In Halsburys Law of England, 4th Edition, Vol. 16 (Reissue) para 957 at page 844 it is stated: "On the principle that a person may not appropriate and reprobate a special species of estoppel has arisen. The principles that a person may not approbate and reprobate express two propositions:(1) That the person in question, having a choice between to courses of conduct is to be treated as having made an election from which he cannot resile.(2) That he will be regarded, in general at any rate, as having so elected unless he had taken a benefit under or arising out of the course of conduct, which he has first pursued and with which his subsequent conduct is inconsistent." 38. In American Jurisprudence, 2nd Edition, Volume 28, 1966, Page 677-680 it is stated: "Estoppel by the acceptance of benefits: Estoppel is frequently based upon the acceptance and retention, by one having knowledge or notice of the facts, of benefits from a transaction, contract, instrument, regulation which he might have rejected or contested. This doctrine is obviously a branch of the rule against assuming inconsistent positions.As a general principles, one who knowingly accepts the benefits of a contract or conveyance is estopped to deny the validity or binding effect on him of such contract or conveyance.This rule has to be applied to do equity and must not be applied in such a manner as to violate the principles of right and good conscience." 39. The fact situation in the present case, would lead to the conclusion that the arbitration agreement subsists because;(i) Disputes as regard final bill arose prior to its acceptance thereof in view the fact that the same was prepared by the respondent but was not agreed upon in its entirety by the appellant herein;(ii) The appellant has not pleaded that upon submission of the final bill by the respondent herein any negotiation or settlement took place as a result whereof the final bill, as prepared by the appellant, was accepted by the respondent unequivocally and without any reservation therefor;(iii) The respondent herein immediately after receiving the payment of the final bill, lodged its protest and reiterated its claims.(iv) Interpretation and/ or application of clause 52 of the agreement would constitute a dispute which would fall for consideration of the arbitrator.(v) The effect of the correspondences between the parties would have to be determined by the arbitrator, particularly as regard the claim of the respondent that the final bill was accepted by it without prejudice.(vi) The appellant never made out a case that any novation of the contract agreement took place or the contract agreement was substituted by a new agreement. Only in the event, a case of creation of new agreement is made out the question of challenging the same by the respondent would have arisen.(vii) The conduct of the appellant would show that on receipt of the notice of the respondent through its advocate dated 21.12.1991 the same was not rejected outright but existence of disputes was accepted and the matter was sought to be referred to the arbitration.(viii) Only when the clarificatory letter was issued the plea of settlement of final bill was raised.(ix) The finding of the High Court that a prima facie in the sense that there are triable issues before the Arbitrator so as to invoke the provisions of Section 20 of the Arbitration Act, 1940 cannot be said to be perverse or unreasonable so as to warrant interference in exercise of extraordinary jurisdiction under Article 136 of the Constitution of India.(x) The jurisdiction of the arbitrator under the 1940 Act although emanates from the reference, it is trite, that in a given situation the arbitrator can determine all questions of law and fact including the construction of the contract agreement. (See Pure Helium India Pvt. Ltd. vs. Oil and Natural Gas Commission reported in 2003(8) SCALE 553).(xi) The cases cited by the learned counsel for the appellant (P.K. Ramaiah and Company (supra) and Nathani Steels (supra) would show that the decisions therein were rendered having regard to the finding of fact that the contract agreement containing the arbitrator clause was substituted by another agreement. Such a question has to be considered and determined in each individual case having regard to the fact situation obtaining therein.

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

Explanation:
0[ds]16. The issues are required to be determined having regard to the facts as which arise for consideration whether by reason of the act of the parties the old contract was substituted by a new contract. Only in the event a new contract came into being, the arbitration agreement cannot be invoked.We, however, may observe that the quotation from Russell on Arbitration may not be apt inasmuch as at the stage of reference what would be a good defence is not a matter to be taken into consideration.25. Yet again, in Nathani Steels Ltd. (supra) the disputes and differences were amicably settled by and between the parties and in that view of the matter it was held that unless and until the statement is set aside, the arbitration clause cannot be invoked. Such is not the position here.The appellant herein did not raise a question that there has been a novation of contract. The conduct of the parties as evidenced in their letters, as noticed hereinafter, clearly go to show that no only the final bill submitted by the respondent was received but another final bill was prepared with a printed format that a "No Demand Certificate" has been executed as other final bill would not be paid. The respondent herein, as noticed hereinbefore, categorically stated in its letter dated 20.12.1990 that as to under what circumstances they were compelled to sign the said printed letter. It appears from the appendix appended to the judgment of the learned Trial Judge that the said letter was filed even before the trial court. It is, therefore, not a case whether the respondents assertion of under influence or coercion" can be said to have been taken by way of an afterthought.27. Even when rights and obligations of the parties are worked out the contract does not come to an end inter alia for the purpose of determination of the disputes arising thereunder, and, thus, the arbitration agreement can be invoked. Although it may not be strictly in place but we cannot shut out eyes to the ground reality that in the cases where a contractor has made huge investment, he cannot afford not to take from the employment the amount under the bills, for various reasons which may include discharge of his liability towards the banks, financial institutions and other persons. In such a situation, the public sector undertakings would have an upper hand. They would not ordinarily release the money unless a No Demand Certificate is signed. Each case, therefore, is required to be considered on its own facts.We may, however, hasten to add that such a case has to be made out and proved before the Arbitrator for obtaining an award.The fact situation in the present case, would lead to the conclusion that the arbitration agreement subsists because;(i) Disputes as regard final bill arose prior to its acceptance thereof in view the fact that the same was prepared by the respondent but was not agreed upon in its entirety by the appellant herein;(ii) The appellant has not pleaded that upon submission of the final bill by the respondent herein any negotiation or settlement took place as a result whereof the final bill, as prepared by the appellant, was accepted by the respondent unequivocally and without any reservation therefor;(iii) The respondent herein immediately after receiving the payment of the final bill, lodged its protest and reiterated its claims.(iv) Interpretation and/ or application of clause 52 of the agreement would constitute a dispute which would fall for consideration of the arbitrator.(v) The effect of the correspondences between the parties would have to be determined by the arbitrator, particularly as regard the claim of the respondent that the final bill was accepted by it without prejudice.(vi) The appellant never made out a case that any novation of the contract agreement took place or the contract agreement was substituted by a new agreement. Only in the event, a case of creation of new agreement is made out the question of challenging the same by the respondent would have arisen.(vii) The conduct of the appellant would show that on receipt of the notice of the respondent through its advocate dated 21.12.1991 the same was not rejected outright but existence of disputes was accepted and the matter was sought to be referred to the arbitration.(viii) Only when the clarificatory letter was issued the plea of settlement of final bill was raised.(ix) The finding of the High Court that a prima facie in the sense that there are triable issues before the Arbitrator so as to invoke the provisions of Section 20 of the Arbitration Act, 1940 cannot be said to be perverse or unreasonable so as to warrant interference in exercise of extraordinary jurisdiction under Article 136 of the Constitution of India.(x) The jurisdiction of the arbitrator under the 1940 Act although emanates from the reference, it is trite, that in a given situation the arbitrator can determine all questions of law and fact including the construction of the contract agreement. (See Pure Helium India Pvt. Ltd. vs. Oil and Natural Gas Commission reported in 2003(8) SCALE 553).(xi) The cases cited by the learned counsel for the appellant (P.K. Ramaiah and Company (supra) and Nathani Steels (supra) would show that the decisions therein were rendered having regard to the finding of fact that the contract agreement containing the arbitrator clause was substituted by another agreement. Such a question has to be considered and determined in each individual case having regard to the fact situation obtaining therein.