AI Structured Summary
Not yet generated for this judgment
Judgment
A ""No claim declaration"" made by appellant contractor has proved his undoing. His application seeking reference of a dispute to Arbitrator
under section 20 of the J&K Arbitration Act has been rejected by the learned District Judge, Udhampur on this ground. He is in appeal against
this.
Appellant was allotted contract of construction of a road and some culverts at Udhampur. He completed the work on March 20,1975 and
signed the Final bill. In page No. VIII of the bill, he declared as under:
Received Rs. 75,971.71 (Rs. seventy five thousand, nine hundered, seventy one and paise seventy one). This payment is in full and final settlement
of all moneys due and I have no further claim in respect of the contract.
After making this declaration, he addressed a communication to the concerned Garrison Engineer complaining that an amount of Rs. 10,642.76
has been wrongly deducted in the bill. He there after approached the Chief Engineer and sought appointment of Arbitrator, but he was told that his
request could not be granted in the face of his no further claim certificate. Exhausting all other evenues he approached the court below seeking
reference of the dispute to Arbitrator. His last ditch effort failed. What is the effect of his ""No claim Declaration""? Does it close all doors for him?
That is the interesting question which falls for declaration.
According to Mr. Bakshi, RP for appellant, it is immaterial and does not bar appellant from raising any fresh dispute arising out of the
controversy. He derives support from AIR 1988 SC: 1172, AIR 1974 SC: 158 and AIR 1981 Cal. 101.
On a cursory view, it appears as if ""No claim declaration"" puts an end to all claims for all times to come, but on a close look it becomes clear
that the very question whether a claim subsists in the fact of ""No claim declarations"" raises a dispute, which is abatable. That being so, it becomes
immaterial whether or not the contractor has signed the final bill in full and final settlement of all his claims. Even if he has, nothing bars him from
preferring a claim, provided the same arises out of the contract and is covered by the arbitration clause. He could be making the claim from a weak
position, but that does not disentitle him from raising the dispute. A similar matter fell far consideration by the Supreme Court in AIR 1988 SC:
1172 and it was held as under:
In order to be entitled to ask for a reference u/s 20 of Arbitration Act, there must be entitlement to money and a difference or dispute in respect of
the same. It is true that on completion of the work, right to get payment would normally arise and it is also true that on settlement of final bill, right
to get further payment is weakened. But the claim subsists and whether it subsists is a matter which is arbitrable"".
Learned District Judge was, therefore, in error in rejecting appellant's application on the ground that no dispute subsisted in view of ""No claim
certificate"" executed by him.
For the reasons stated, I allow this appeal, set aside the order impugned and direct the District Judge, Udhampur to decide the application in the
light of observation made hereinabove after notice to parties. Record be returned.