- (1.) This appeal which arises out of a judgment and order dated 23-11-2001 passed by the High Court of Kerala at Ernakulam revolves round the question as to whether an arbitration clause in a contract agreement survives despite purported satisfaction thereof.
(2.) The parties to this appeal entered into an agreement for a project at Kayamkulam. Upon completion of the work the respondent herein submitted final bill which was allegedly not accepted by the appellant, whereafter they themselves prepared the final bill and forwarded the same along with a printed format being a "No Demand Certificate." The said "No Demand Certificate" was signed by the respondent herein which is in the following terms : NO DEMAND CERTIFICATE Name of package : Earth filling in Temporary Township Part-II Letter of award : LOA No. KYM/CS/89/022/NIT- 005/LOA-065 dated 19-3-1990 Name of the Contractor : Reshmi Construction, T.C. 4/- 1298, Keston Road, Kowdiar, P.O. Trivandrum-3 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."
(3.) 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 Nagiarkulangara 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 served us with a printed specimen of the document and insisted that it should be typed in our own letterhead and submitted to the N.T.P.C. We refused to submit such a document. But the authorities of N.T.P.C. threatened that unless and until we execute the said document in favour of the Corporation, the N.T.P.C. would not effect payment of our bill. More than six lakhs of rupees is pending for payment vide the alleged final bill. We have incurred huge losses in the execution of the work purely due to the laches and lapses of the Corporation. Moreover lakhs and lakhs of rupees has to be paid to our Bankers, creditors suppliers, workers, truck owners etc. etc. Under such a situation we have no other way other than budging to the coercion of the authorities of N.T.P.C. Ltd., to get whatever they give merely for the necessity of our survival. We have to comply with the instructions of authorities of N.T.P.C. Ltd. out of our helplessness in order to receive payment. Hence this letter. The certificates, undertakings, etc. as aforesaid have been executed without prejudice to our rights and claims whatsoever on account of the alleged final bill. The money invested in the work comprises loans from the Federal Bank Ltd., private financiers, etc. as well the Firm's own funds. Those additional sums raised by loans have to be paid to the Bank, financiers, etc. hence under duress, coercion and under undue influence we are signing the bill and execute such documents as aforesaid to receive payment. Under such coercive circumstances the alleged final bill cannot be constructed as final bill. We are signing the alleged final bill under coercion, under undue influence and under protest only without prejudice to our rights and claims whatsoever. There is no accord and satisfaction between the contracting parties. You are therefore requested to kindly pass the final bill incorporating all the measurements of the items such as sinkage, in and under water execution of works, compensation for suspension of works, reimbursement of cost escalation due to price hike of petroleum products, cost of idling, enhanced rates for quantities executed beyond the contractual period, market rate for excess quantities, extra additional items etc. besides the losses and damages by way of idling of tools and plants, workmen, staff, establishment costs, capital outlay, interest etc. as per actuals. We hope and request that your goodself may do the needful in the matter." (Emphasis supplied);