- (1.) IT is not disputed that the final bill was presented by the appellantcontractor on 13.2.2002. The final bill against the claim application of the Contractor in respect of the contract agreement was paid on 25.11.2003 vide Voucher No.21/1307/BR -II. The Engineer -in -Chief certified that the maintenance/guarantee period of the contract expired on 18.1.2003. The Arbitrator made an award in favour of the Contractor and against the employer by his reasoned award dated 16.7.2009. The respondents feeling aggrieved by the award filed objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short "the Act") before the District Judge, Chandigarh. The District Judge, Chandigarh has non -suited the Contractor and reversed the award by holding that the Contractor's claim was deemed to have been waived and stood extinguished by virtue of Clause 65 -A of the Contract agreement. Clause 65 -Khan Md. Firoz A reads as follows: - "65 -A. Final Bill (Applicable only to Term Contracts). - The Final Bill shall be submitted by the Contractor on I.A.F.W. -2262 in duplicate, accompanied by all supporting abstracts, vouchers, etc., except I.A.F.W. -2158 and 1833 prepared in the manner prescribed by the G.E. within three months of physical completion of the Works to the satisfaction of the Engineer -in -Charge. In respect of works orders arising out of unit requisitions or M.E.S. inspections for maintenance and repairs, any portion of such an order which remains uncompleted at the date of the next subsequent requisition or inspection may, purely to facilitate payment of completed Work and without prejudice to any other right or remedy of Government in respect of any such delay, be deleted and the Works Order, as so amended forthwith, billed for final payment. No further claims shall be made by the Contractor after submission of a Final Bill and these shall be deemed to have been waived and extinguished. The Contractor shall be entitled to be paid the full measured value of the Works Order, less the value of payments made on account and of any charges properly preferred under the Conditions of Contracts for Government Stores, etc. supplied on repayment, subject to the certification of the final bill by the When fractions of a rupee occur in the totals of bills, fractions less than half a rupee shall be disregarded and half a rupee and over taken as a rupee. No charges shall be allowed to the Contractor on account of the preparation of a final bill."
(2.) CLAUSE 65 of the Works Contract would also have some bearing on the case since it also contains disclaimer, and is, therefore, reproduced below: - "65. Final Bill (Applicable only to Measurement and Lump Sum Contracts). - The Final Bills shall be submitted by the Contractor on I.A.F.W. -2262 in duplicate within three months of physical completion of the Works to the satisfaction of the Engineer -in -Charge. It shall be accompanied by all abstracts, vouchers, etc., supporting it and shall be prepared in the manner prescribed by the G.E. No further claims shall be made by the Contractor after submission of the Final Bill and these shall be deemed to have been waived and extinguished.
(3.) THE Contractor shall be entitled to be paid the final sum less the value of payments already made on account, subject to the certification of the final bill by the G.E. No charges shall be allowed to the Contractor on account of the preparation of the final bill The contract terms and conditions require submission of the final bill within three months of physical completion of the works to the satisfaction of the Engineer -in -Charge. There is no dispute that the final bill was presented within the time prescribed. Clauses 65 and 65 -A, though set a boundary on the Contractor to submit its bill, but does not speak of the time within which the final bill is to be discharged by the employer. Admittedly, when the dispute was referred to Arbitration, the Contractor made further claims before the arbitrator which were adjudicated in arbitral proceedings after hearing the employer and the claims were by and large allowed. If the final bill was presented on 13.2.2002, and payment of the same was made belatedly on 25.11.2003 to the pecuniary disadvantage of the Contractor, then it would appear not to lie in the mouth of the Engineer -in -Charge/employer to invoke an exclusionary clause as is found embedded in Clause 65 -A. If such a clause were to operate, then it would even take away the Arbitrator's discretion and jurisdiction to award interest pendente lite and future interest etc. which the law permits and such a claim would also constitute a valid claim which can be awarded. In any case, such a clause I am inclined to think would be opposed to public policy and operate unfairly, and should be understood in the light of what the Supreme Court enunciated in Central Inland Water Transport Corporation and Anr. vs. Brojo Nath Ganguly and Anr., 1986 AIR(SC) 1571, thus expanding the sphere of the law of contracts and subjecting it to the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power. Extracts from the judgment can be profitably quoted: - "Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract entered into between parties who are not equal in bargaining power. The above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creating of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however, unfair unreasonable or unconsionable a clause in that contract or form or rules may be. This principle will not apply when the bargaining power of the contracting parties is equal or almost equal. mis principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infrastructural organisations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. The Court must judge each case on its own facts and circumstances when called upon to do so by a party under section 31(1) of the Specific Relief Act, 1963. ";