P K RAMAIAH AND COMPANY Vs. CHAIRMAN AND MANAGING DIRECTOR NATIONAL THERMAL POWER CORPN

JUDGEMENT

(1.) Leave granted.

(2.) The appellant had a contract with the respondent on 7/02/1979 to complete the site levelling and grading for Ramagundam Super Thermal Power project, Ramagundam, Karimnagar Dist. , A. P. , for a sum of Rs. 1,74,33,334. 00 and the work had to be completed within 15 months. According to the appellants, he completed the work on 30/12/1980. His claim for further amounts was rejected on 12/08/1981. Therefore, he wrote a letter on 13/04/1984 requesting the respondent to settle his claim within a period of one month from the date of its receipt. Though the respondent promised in their letters dated 10/11/1984 and 7/03/1987 to refer the dispute for arbitration, no action in that behalf was taken under clause 57 of the contract. On his application under S. 8, 11 and 12 of the Arbitration Act, 1940 for short 'the Act', 5th Additional Judge, City Civil court, Hyderabad, after hearing the parties, appointed Shri P. Chennakesava Reddy, retired chief justice, Gauhati high court as an Arbitrator. The A. P. High court in C. R. P. Nos. 838 and 839 of 1990 by judgment dated 31/10/1991 held that the appellant had acknowledged the final measurement and accepted the payment in full and final settlement of the contract on 19/05/1981, therefore, there was no subsisting contract for reference. The learned Judge also found that after 3 years from the date of rejecting the claim, the claim was barred by limitation, and set aside the order of the civil court giving rise to this appeal.

(3.) Shri A. N. Parekh, the learned Senior Counsel for the appellant, contended that the appellant had not unconditionally acknowledged the full and final settlement of the claim and that he immediately wrote a letter on 1/06/1981 disputing the settlement and thereafter number of representations were made requesting the respondent to refer the dispute for arbitration. The Chiefconstruction Manager in his letter dated 16/11/1984 admitted that the respondent was taking steps to refer the dispute to the arbitration. Therefore, the respondents are estopped from assailing the appointment of arbitrator. The full and final settlement of the claim was not unconditional and the respondent had obtained it by coercion which itself is referable to arbitration. In support thereof, he placed reliance on Damodar Valley Corpn. v K. K. Kar , Bharat Heavy electricals Ltd. v. Amar Nath Bhan Prakash , Union of India v. L. K. Ahuja and co and a judgment of the Calcutta High court in Calcutta Metropolitan development Authority v. Gouranga Lal Chatterjee. Shri Sanghi, learned senior Counsel for the respondent, contended that the arbitration would arise only when there is a subsisting dispute or difference between the parties. Once there is a settlement of the claims admittedly made by the appellant, there is no pending dispute and the question of arbitration of the dispute thereafter does not arise. In view of the fact that the appellant admittedly accepted the payment in full and final settlement, there is no arbitrable dispute for reference. He also contends that the claim is barred by limitation.