Summary
Applying the Section 11 framework discussed in this 2018 decision, the Supreme Court set aside appointment of an arbitrator because the contract had been discharged by accord and satisfaction. ANS had signed the final bill and no-claim certificate and voluntarily accepted final payment. Its later allegation of coercion lacked particulars or prima facie support. A genuinely disputed discharge obtained through fraud or coercion could permit arbitration, but a bare allegation did not suffice on these facts.
Issues
- Whether a later allegation of financial duress displaced the no-claim certificate and final settlement so as to justify appointing an arbitrator.
Held
- The Court applied the then-discussed Section 11 authorities requiring prima facie assessment of allegations that a discharge voucher or no-claim certificate resulted from fraud, coercion or undue influence. A voluntary, valid discharge could conclude the dispute; a credible challenge to voluntariness could justify adjudication or reference. Mere execution of a certificate was not an absolute bar regardless of circumstances. (¶¶ 17, 18, 19, 20, 21)
- Here both parties mutually signed the final bill after measurement and valuation, and ANS accepted the final payment of Rs. 20.34 crore in full settlement. The record did not establish prima facie coercion or duress. Its subsequent withdrawal of the certificate and later loss claim were held to be an afterthought rather than a supported challenge to free consent. (¶¶ 23, 24, 25)
- On these facts full and final settlement constituted accord and satisfaction, leaving no arbitrable dispute for exercise of Section 11 power. The High Court’s appointment order therefore could not stand. This was the determination of the historic appointment dispute, rather than a finding that all no-claim certificates necessarily preclude arbitration. (¶¶ 19, 24, 25, 26)
Result
Appeal allowed; High Court’s order dated 12 January 2015 appointing an arbitrator set aside because no arbitrable dispute survived the established accord and satisfaction.