TaxTMI 
TaxTMI 
2004 (1) TMI 672
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....ted 19.3.90 Name of the Contractor : Reshmi Construction, T.C. 4/1298, Keston Road, Kowdiar, P.O. Trivandrum 1. This is to certify that we have received all payment in full and final settlement of the supplied and services rendered and/ or all work performed by us in respect of the above referred LOA/ Contract and we have no other claims whatsoever final or otherwise outstanding against NTPC. We further confirm that we shall have no claim/ demands in future in respect of this contract of whatsoever nature, final or otherwise." 2. We would now request you to please release our security deposit/ contract performance Guarantee." However, on the same day a letter dated 20-12-1990 was written by the respondent to the appellant stating: "We have completed the aforementioned work in the Kayamkulam Super Thermal Power Project's temporary township area at Nangiarkulangara by the end of November 1990 itself. We had submitted a pre-final bill in November itself but the authorities denied the bill and insisted final bill. But when the alleged final bill was prepared the authorities insisted that a "No Demand Certificate" should be executed by us in favour of the Corporation. They serv....
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....ctuals. We hope and request that your goodself may do the needful in the matter." [Emphasis supplied] The respondent thereafter invoked the arbitration clause by reason of a letter through his advocate dated 21.12.91 wherein the claims under several heads as enumerated in clause (a) to (p) thereof. Therein a request was made to refer all the disputes and differences to a sole arbitrator for adjudication with a direction to make and publish the award within the statutory period. The appellant herein thereafter discussed the matter at the company level and in its proceedings it was recorded: "4.0 In case of M/s. Reshmi Constructions, Trivandrum Kerala (1(c) above) and M/s. C.S. Prakash, (1(d) above) of Perumbavoor, Kerala, the total payment for the works done were effected, the final bills have been settled without protest and the no-dues certificate in the standard proforma have been submitted by the contractors. 5.0 To seek legal opinion in the matter, we have approached Mr. B.S. Krishnan, a leading advocate from Cochin. On detailed study of the claims of the agencies and considering legal conditions, the advocate has advised us to appoint arbitrator/s nominated by CMD of NTPC....
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....defective. It was so stated because of the mistaken impression that the notice is signed by your client and not by you. I stated that the mistake is in advert at and the same is regretted. I would like to bring to your notice one more fact which was omitted to be stated in the reply notice sent earlier. I have already stated that your client has issued 'no dues' certificate. The final bill is accepted by your client without any protest. This is further followed up by your client receiving the security deposit released on 21.1.92; that is after the expiry of the stipulated period reckoned from the date when the contract came to an end. In all other respects the reply notice earlier sent stands." The respondent herein filed an application under Section 20 of the Arbitration Act, 1940 before the Hon'ble Subordinate Judge's Court Mavelikkara and in terms of a judgment and order dated 30.6.1994 the said application was dismissed. Aggrieved, the respondent herein preferred an appeal before the High Court of Kerala which was allowed by reason of the impugned order. Mr. Bhatt, the learned counsel appearing on behalf of the appellant urged that as the contract itself came....
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.... instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs drawing, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works; or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the General Manager of National Thermal Power Corporation Ltd.; and if the General Manager is unable or unwilling to act: to the sole arbitration of some other person appointed by the Chairman and Managing Director; National Thermal Power Corporation Ltd. willing to act as such arbitrator. There will be no objection if the arbitrator so appointed is an employee of National Thermal Power Corporation Ltd. and that he had to deal with the matters to which the contract relates and that in the course his duties as such he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally referred being t....
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....n-Charge, shall be made within the period specified hereunder, the period being reckoned from the date of receipt of the bill by the Engineer-in-Charge: (a) Contract amount not exceeding Rs. 5 lakhs Four months. (b) Contract Amount exceeding Rs. 5 lakhs Six months. After payment of the amount of the final bills payable as aforesaid has been made, the Contractor may if he so desires, reconsider his position in respect of the disputed portion of the final bill and if he fails to do so within 90 days, his disputed claim shall be dealt with as provided in contract." [Emphasis supplied] 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. In Damodar Valley Corporation vs. K.K. Kar [(1974) 1 SCC 141],this Court held: "It appears to us that the question whether there has been a full and final settlement of a claim under the contract is itself a dispute arising 'upon' or 'in relation to' or 'in connection with' the con....
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....of the final bill, the right to get further payment get weakened but the claim subsists and whether it does subsist, is a matter which is arbitrable. [Emphasis supplied] This aspect of the matter has also been considered in Jayesh Engineerng Works (supra) wherein following L.K. Ahuja (supra) it was held: "Whether any amount is due to be paid and how far the claim made by the appellant is tenable are matters to be considered by the arbitrator. In fact, whether the contract has been fully worked out and whether the payments have been made in full and final settlement are questions to be considered by the arbitrator when there is a dispute regarding the same." In M/s. P.K. Ramaiah and Company (supra) the amount was received unconditionally. The full and final satisfaction was acknowledged by a separate receipt in writing. In that situation the following finding was recorded : "Thus there is accord and satisfaction by final settlement of the claims. The subsequent allegation of coercion is an afterthought and a devise to get over the settlement of the dispute, acceptance of the payment and receipt voluntarily given." We, however, may observe that the quotation from Russell on Arb....
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....t such a case has to be made out and proved before the Arbitrator for obtaining an award. At this stage, the Court, however, will only be concerned with the question whether triable issues have been raised which are required to be determined by the Arbitrators. Circumstances leading to passing an order by the courts of law directing the parties to get their disputes determined by domestic tribunal selected by them having regard to the correspondences exchanged between the solicitors came up for consideration in Goodman Vs. Winchester and Alton Rly [(1984) 3 All ER 594] wherein it was held: "As I have already recounted, the plaintiff's solicitor may have had in mind that if there were an arbitration clause various matters could be sorted out cheaply and quickly under it. There is no evidence, in my judgment, that when he drafted the terms of the arbitration clause he had in mind that it would not apply to a repudiation of the contract by the defendants. He is a solicitor; he is clearly an experienced solicitor; and he should have appreciated (and I feel certain he did) that the arbitration clause which he drafted, and which was accepted by the defendants, would cover every as....
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....ean without prejudice to the position of the writer of the letter if the terms he proposes are not accepted. If the terms proposed in the letter are accepted a complete contract is established, and the letter, although written without prejudice, operates to alter the old state of things and to establish a new one.' Although this definition was not necessary for the facts of that particular case and was therefore strictly obiter, it was expressly approved by this court in Tomlin v Standard Telephones and Cables Ltd. [1969] 3 All ER 201 at 204, 205, [1969] 1 WLR 1378 at 1383, 1385 per Danckwerts LJ and Ormrod J. (Although he dissented in the result, on this point Ormrod J agreed with the majority.) The definition was further cited with approval by both Oliver and Fox LJJ in this court in Cutts v. Head [1984] 1 All ER 597 at 603, 610, [1984] Ch. 290 at 303, 313. In our judgment, it may be taken as an accurate statement of the meaning of 'without prejudice', if that phrase be used without more. It is open to the parties to the correspondence to give the phrase a somewhat different meaning, e.g. where they reserve the right to bring an offer made 'without prejudice'....
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....s, (2) that fresh proceedings according to law were not barred." 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. In Halsbury's Laws of England, 4th Edition, Vol.16 (Reissue) para 957 at page 844 it is stated: "On the principle that a person may not approbate and reprobate a special species of estoppel has arisen. The principle that a person may not approbate and reprobate express two propositions: (1) That the person in question, having a choice between two 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 has taken a benefit under or arising out of the course of conduct, which he has first pursu....