UNION OF INDIA Vs. CHARLES C GEORGE

JUDGEMENT

(1.) This appeal is preferred by Union of India and the Divisional Railway Manager, Southern Railway against the judgment in OS (Arb.) No. 15 of 1994 of the 2nd Addl. Sub Judge, Ernakulam, directing them to file the original agreement No. 34 / TVC / 90 dated 7.5.1990 and directing the parties to file a joint panel of arbitrators so as to appoint an arbitrator for settling the disputes and difference between the parties.

(2.) The work in question related to "rationalization of watering arrangements provision of 225 Kilo Litres ground level reservoir, 90 Kilo Litres RCC High level tank near South Over Bridge and alternation to distribution pipe lines." Formal agreement was executed by the parties on 7.5.1990. The work was not completed in time, which according to the contractor was due to the default on the part of the Railways. Railways however, maintained the stand that the time for competition of the work had to be extended because of the delay in completing the work by the contractor. Both sides raised their respective contentions before the the court below highlighting the default committed by each other. Contractor submitted an amount of Rs. 6,66,300/- is still due to him under various heads. Railways denied all the claims. Railways submitted that the contractor had failed to return large quantities of excess M.S. rods supplied to him and consequently there was delay in settling the final bill. It was stated though the work was completed and the final measurement was taken on 15.3.92 the payment could not be made since the claimant did not return the M.S. rods in time. The contractor returned the M.S. rods only on 15.9.1992 and after that payment was effected. The claimant then received the final payment on furnishing a "no claim certificate". Security deposit received from the contractor was also released to him on the strength of "no claim certificate". Railways submitted after having received the amount and the security deposit etc. the claimant is estopped from raising any further claim. Counsel also referred to Clause.43(2) of the general conditions of contract entered into between the parties.

(3.) Counsel appearing for the contractor however, submitted that even if final bill was settled by furnishing "no claim certificate" the contractor is still entitled to raise his claims. Counsel submitted mere fact that the final bill had been cleared would not mean that there is accord and satisfaction within the meaning of S.63 of the Contract Act. Counsel placed reliance on the decisions of the Apex Court in Kishorilal Gupta's case ( AIR 1959 SC 1362 ), Damodar Valley v. K.K. Kar ( AIR 1974 SC 158 ), Bharat Heavy Electricals Ltd. v. Amar Nath Bhan Prakash ( 1982 (1) SCC 625 ), Union of India v. M/s. L.K. Ahuja & Co. ( AIR 1988 SC 1172 ), Jayesh Engineering Works v. New India Assurance Co. Ltd., ( 2000 (10) SCC 178 ) ETC. Counsel submitted that the decisions of the Apex Court in AIR 1988 SC 1172 and (2000 (10) SCC 178) are squarely applicable to the facts of this case. Counsel also placed decisions of the Apex Court in P.K. Ramath's case (1994 Suppl. 3 SCC 126), Nathani Steels Ltd. v. Associated Constructions (1995 Supp. (3) SCC 324) and in Union of India v. Popular Builders 2000 (8) SCC 1 . Counsel also submitted in any view of the matter the question whether there is accord and satisfaction and whether the contract has been fully worked out and whether the payments have been effected in full and final settlement are questions to be decided by the arbitrator and not by the Sub Court. Counsel also made reference to the decision of this Court in Ittyarah v. State of Kerala ( ILR 1987 (1) Ker. 182 ) and also in Union of India v. M/s. Asian Techs Ltd. ( ILR 2002 (2) Ker. 501 . Reference was also made to the decision of this court in Aby Abraham Mathew v. Hindustan News Print Ltd. ( 2001 (1) KLT 517 ). Counsel appearing for the Railways placed reliance on the decision of the Apex Court in Wild Life Institute of India, Dehradun v. Vijay Kumar Garg ( 1997 (10) SCC 528 ).