- (1.) PETITIONER entered into a contract with the Wheel and Axel Plant, railway Administration, Bangalore. No claim certificate was given by the petitioner stating "we do hereby declare that no other claim is outstanding against the Wheel and Axel Plant, railway Administration, Bangalore, for the work done or for labour or for material supplied or any other account and the payment of this bill shall be in final settlement in respect of the work". This certificate appears to have been issued on 13-12-1997. Thereafter bill was prepared and it was mentioned that the bill was accepted under protest for claim. In the letter dated 26-11-1997, request was made to make the payment immediately. It is also stated that on completion of casting and curing of the tank 25% and on completion of other finishing works at 10% payment based on the schedule have not been made as per the agreement. Petitioner has written a letter on 15-12-1997 pointing out that a penalty of Rs. 4,14,950/-being 20% of the contract value have wrongly been imposed on him. The bill was signed under protest. Prayer was made to operate clause 17 (4) of the General Conditions of the contract. Under this clause, the time was to be extended subject to certain penalty.
(2.) THE conditions of the contract provide the procedure for settlement of disputes. Clause 43 (2) provides as under : "43 (2 ). The contractor shall not be entitled to make any claim whatsoever against the Railway under or by virtue of or arising out of this contract, nor shall the Railway entertain or consider any such claim, if made by the contractor, after he shall have signed a "no-claim" certificate in favour of the Rail-way in such form as shall be required by the Railway, after the works are i\na\\y measured up". Reliance is placed on the decision given in the"-case of Damodar Va/ley Corporation v K. K. Kdr1, wherein it was observed as under. : "it appears to us that the question whether there has been a full and final settlement of claim under the contract is itself a dispute arising 'upon' or in relation to or 'in connection with the contract. These words are wide enough to cover the dispute sought to be ' referred. The respondent's contention is that the contract has been repudiated by the appellant unilaterally as a result of which he had no option but to accept that repudiation because if the appellant was not ready to receive the goods he could not supply them to htm or force him to receive them. In the circumstances, while accepting the repudiation, without conceding that the appellant had a right to repudiate the contract, he could claim for damages for breach of contract. Such a claim for damages is a dispute or difference which arises between himself and the appellant and is 'upon' or in relation to or 'in connection with' the contract". Reliance is also placed on the decision of the apex Court in the case of Union of India and another v M/s. L. K. Ahuja and Company. In that case also the appellant accepted the full and final payments of the agreements which had been executed by it and no claim declaration was given. It was" contended that since there is no dispute, the application filed under section 45 of the Arbitration Act is not maintainable. The Apex Court interpreted the provisions of Section 20 to find out as to whether there was any valid claim and it was observed: "8. In view of the well-settled principles we are of the view that it will be. entirely wrong to mix up the two aspects, namely, whether there was any valid claim for reference under Section 20 of the Act, and, secondly, whether the claim to be adjudicated by the Arbitrator, was barred by lapse of time. The second is a matter which the Arbitrator would decide unless, however, if on admitted facts a claim is found at the time of making an order under Section 20 of the Arbitration Act, to be barred by limitation. In order to be entitled to ask for a reference under Section 20 of the act, there must be an 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 the final bill, the right to get further payment would normally arise and it is also true that on settlement of the final bill, the right to get further payment gets weakened but the claim subsists and whether it does subsist, is a matter which is arbitrable. In this case, the claim for reference was made within three years commencing from April 16, 1976 and the application was filed on December 18, 1976. We are therefore of the view that the High Court was right in this case. See in this connection, the observations of this Court in Major (Retd.) Inder singh Rekhi v. Delhi Development authority. In the case of Re Eyre and Corporation of leicester, it was observed when the Court is satisfied that there is a dispute within the submission; the parties have failed to concur in the appointment of an Arbitrator; there has been a proper notice given; the Court may appoint an Arbitrator, The word 'may' was interpreted as 'must' and it was observed that there is no discretion and the Court below ought not to have the power to say there is to be an arbitration or not. but only to decide as to the choice of an Arbitrator".
(3.) ACCORDING to the submission of the learned Counsel for the petitioner, the power which has been conferred under Section 11 of the Arbitration and Conciliation Act. 1996, is only for the appointment of an Arbitrator and therefore, whether a dispute exists or not cannot be examined at this stage.;