Full and final settlement bars arbitration unless pleadings specifically allege coercion, fraud, misrepresentation, or lack of free consent

A petition seeking reference to arbitration was held not maintainable where the claimant had earlier issued a written full and final settlement acknowledgement and did not specifically plead coercion, fraud, misrepresentation, mistake, or lack of free consent. A settlement letter accepted willingly carries legal effect and cannot be disregarded merely because arbitration is later invoked. In the absence of a categorical challenge to the settlement in the pleadings, no subsisting arbitrable dispute was shown, and the court would not permit a roving inquiry into settled accounts. The dispute was therefore not referred to arbitration.

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Issues: Whether a petition under section 20 of the Arbitration & Conciliation Act, 1996 is maintainable when the claimant had issued a letter acknowledging receipt of payment as full and final settlement, but the petition does not specifically plead coercion, fraud, mistake, or absence of free consent in relation to that letter.

Analysis: A full and final settlement letter, where issued willingly, has legal efficacy and cannot be ignored merely because the claimant later seeks arbitration. The exception is where the pleading itself clearly sets out facts showing that the settlement was obtained under coercion, fraud, misrepresentation, mistake, or other circumstances negativing free consent. In the absence of such a specific and categorical challenge, a bare invocation of arbitration does not preserve a subsisting arbitrable dispute. The petition also cannot be used for a roving inquiry into settled accounts when the foundational plea against the settlement is absent.

Conclusion: The petition was not maintainable and the claim for reference to arbitration failed.

Final Conclusion: The Court refused to refer the dispute to arbitration because the claimant had not specifically assailed the full and final settlement letter in the pleadings.

Ratio Decidendi: Where a party has accepted a full and final settlement in writing, arbitration is not maintainable unless the pleadings specifically assert and support vitiating factors such as coercion, fraud, misrepresentation, or absence of free consent.

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