BHARAT SANCHAR NIGAM LTD Vs. BWL LTD

JUDGEMENT

(1.) THIS Appeal assails the concurrent findings of the Arbitral Tribunal as well as the learned Single Judge. The Respondent had challenged the deduction from its Running Bills of a sum of Rs. 1,32,04,290/- inclusive of interest. The Appellant made these deductions on the ground of liquidated damages. An Advance Purchase Order was placed by the Appellant on the Respondent on 23.10.1996 for the supply of (a) 21 nos. 60 M Tubular Tower and (b) 108 nos. 80 M Tubular Towers. Eventually, on 19.11.1996, the Appellant placed a Purchase Order on the Respondent for the aforementioned numbers of total value of Rs. 9,10,49,192. The terms, inter Towers for a alia, were that the supplies would be effected only after issuance of Quality Approval by the DOT and secondly that these supplies would be completed within six months, that is, on or before 28.5.1997. The necessary Drawings were supplied by the Appellant to the Respondent on 9.12.1996.

(2.) CLAUSES 16.1 and 16.2 of the Contract, which deals with the imposition and recovery of liquidated damages, read thus:- 16.1 The date of delivery of the stores stipulated in the acceptance of tender should be deemed to be the essence of the contract and delivery must be completed not later than the dates specified therein. Extension will not be given except in exceptional circumstances. Should, however, deliveries be made after expiry of the contract delivery period, without prior concurrence of the Purchaser, and be accepted by the consignee, such deliveries will not deprive the Purchaser of his right to recover liquidated damages under clause 16.2 below. However, when supply is made within 21 days of the contracted original delivery period, the consignee may accept the stores and in such cases the provision of clause 16.2 will not apply.

(3.) WE are of the opinion that failure to record an objection cannot, ipso facto, and without more, inexorably lead to the conclusion that any demur thereafter is unjusticiable. This proposition, having been stated so widely and broadly, must be rejected. There is an abundance of decisions of the Hon'ble Supreme Court to the effect that if a party is left with no option but to go along with the whims or demands of the other party which enjoys a superior and dominating position, it is, at best, an acquiescence which can subsequently be withdrawn. Their Lordships have clarified that even though a Receipt had been given stating that monies had been accepted in full and final settlement, since the parties were not in pari delicto, the disadvantaged party could subsequently assert the absence of a complete accord and satisfaction. Private parties are very often forced and compelled to acquiesce the dictates of the Government or other authorities in order to minimize their losses or protect their profits. At the highest, a failure to object can be seen as evidence substantiating a particular position. Such evidence cannot be conclusive or total self-sustainable, impervious to or intolerant of proof to the contrary. It shall be open for the Arbitral Tribunal to go into the question and give a determinative finding as to whether the accord and satisfaction given by the party was free of any extraneous circumstances or was obtained under force or coercion by the party in a domination position. It has been held in Nathani Steels Ltd. ?vs- Associated Constructions, 1995 Supp(3) SCC 324 and Union of India ?vs- Popular Builders, Calcutta, (2000) 8 SCC 1 that where a party has accepted the Final Bill without any protest and the Court is satisfied that the accord and satisfaction had been arrived at by the execution of a full and final receipt and/or a final bill, in the absence of any fraud, duress, coercion or the like, the Arbitration Clause would have come to its logical end and no proceedings under the Arbitration and Conciliation Act, 1996 (AandC Act for short) would be called for. A reading of NTPC ?vs- Rashmi Constructions, Builders and Contractors, (2004) 2 SCC 663 is further illustrative on this issue and it holds that the existence of any fraud, coercion or undue influence can be gone into by the Arbitral Tribunal which is competent to determine all questions of law and facts including construction of the contract agreement. If on a consideration of the evidence collected by it, there are reasons to conclude that the accord and satisfaction granted by a party before it had been arrived at by free will, it should record it and refrain from proceeding further. If, however, the evidence before it reveals that such an accord and satisfaction was not born out of the free will of the party, it shall be its duty to enter reference and decide conclusively on the claims despite the purported accord and satisfaction.