HIGH COURT OF JAMMU & KASHMIR AND LADAKH

AT JAMMU

AA No.5/2018

Reserved on: 06.02.2026

Pronounced on: 13.02.2026

Uploaded on: 13.02.2026

M/s H.P.Singh & Co.

....Petitioner(s)

Through:- Mr. Amit Gupta, Sr. Advocate with

M/s Sumit Moza, Abhay Tandon &

Pratyush Sharma, Advocates

Versus

1. Union of India

Through Chief Engineer,

Construction Northern Railways, Kashmir Gate,

Delhi.

2. General Manager, Constructions

Northern Railways Baroda House, New Delhi.

3. Deputy Chief Engineer

Northern Railway, Construction,

Northern Railways, Pathankot

4. Chief Administrative Officer

Construction Northern Railway,

Head Quarter Kashmir Gate, New Delhi.

...Respondent(s)

Through: Mr. Harshwardhan Gupta, CGSC

Coram: HON’BLE MR. JUSTICE SANJEEV KUMAR , JUDGE

JUDGMENT

1. This is a petition under Section 11 of the Jammu & Kashmir

Arbitration and Conciliation Act, 1997 [“the Act”] for

appointment of an independent arbitral tribunal/arbitrator to

settle and adjudicate upon the disputes arising out of a contract

AA No.5/2018 2

entered into between the parties, in terms of agreement No.26-

A/c/Dy.CE/C/PTK dated 15.07.2009. In terms of an order of

allotment dated 14.08.2007 issued by respondent No.3, acting

for and on behalf of the President of India, work of loading,

leading, unloading and stacking of railway material from Delhi,

Uttar Pradesh, Haryana, Punjab, Uttranchal. Jammu & Kashmir

and Rajasthan was allotted to the petitioner for a period of six

months for an amount of Rs.1,41,28,309.75. The date of

completion of the work was initially 13.02.2008 but the same

was subsequently extended upto 30.09.2009.

2. It is alleged that the railways did not provide any work order so

as to enable the petitioner to execute the contract in time despite

the fact that acceptance letter was issued to the petitioner in the

year 2007. It is submitted that the work could be started by the

petitioner only in the month of August, 2008 and, accordingly,

the contract period was further extended. The contract was

formalized by execution of a formal agreement between the

parties on 15.07.2009. It is further alleged that, though, the

contract was allotted for a period of only six months, it came to

be extended for more than ten years. The petitioner claims that

he could execute only 50% of the work, as a result, suffered

huge losses. It is, thus, case of the petitioner that due to acts of

omission and commission committed by the respondents from

time to time, he was not allowed to execute the contract in

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terms of the agreement executed and was even forced to renew

his performance guarantee, which was to the tune of

Rs.2,14,960/- and TRD of Rs. 7,06,500/-. It is submitted that

apart from the performance guarantee, the security deposit of

the petitioner to the tune of rupees five percent of the contract

value amounting approximately to Rs.4,91,456/- was illegally

retained by the respondents during the currency of the contract.

3. Without going much into the allegations made by the petitioner

in the petition, suffice it to say that a serious dispute between

the parties, arising out of the contract, arose between the parties.

In these circumstances, the petitioner claims that he approached

the respondents for appointment of an arbitrator in terms of

Clause 64(1) of the General Conditions of Contract vide letter

dated 04.09.2017. The respondents refused to refer the dispute

to the arbitrator in terms of the arbitration clause aforesaid on

the ground that the petitioner was not entitled to invoke the

arbitration clause after having signed the “Supplementary

Agreement” and “No Claim Certificate” vide communication

dated 27.11.2017.

4. Faced with the refusal on the part of the respondents to refer the

dispute to arbitration in terms of Clause 64(1) of the General

Conditions of Contract, the petitioner filed the instant petition

seeking intervention of the Lord Chief Justice or his nominee to

appoint an independent Arbitral Tribunal/Arbitrator to

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adjudicate and determine the disputes that had arisen between

the parties.

5. The petition is contested by the respondents. In the written

objections filed on behalf of the respondents, it is inter alia

contended by the respondents that the arbitration clause is not

invokable for the reason that the petitioner has, in lieu of full

and final settlement, signed a supplementary agreement along

with the final bill and has received all the due payments. It is

submitted that in view of the submission of „No Claim

Certificate‟ dated 15.06.2017 by the petitioner, no arbitrator, in

terms of the arbitration clause, could be appointed as no arbitral

dispute has arisen between the parties.

6. Having heard learned counsel for the parties and perused the

material on record, following question arises for determination

in this case:

“Whether the petitioner after having issued “No

Claim Certificate” duly singed by him and

execution of supplementary agreement dated

19.04.2017 can invoke arbitration clause i.e.

Clause 64(1)(i) of General Conditions of Contract,

1999 and seek appointment of arbitrator to

adjudicate the disputes arising out of the contract

entered into between the parties?

7. Before proceeding further to analyze the rival contentions of the

parties, it would be appropriate to set out arbitration Clause i.e.

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Clause 64(1)(i) of the General Conditions of Contract, which is

set out below:

“64(1)(i) Demand for Arbitration--- In the event of any

dispute or difference between the parties hereto as to the

construction or operation of this contract, or the respective

rights and liabilities of the parties on any matter in

question, dispute or difference on any account or as to the

withholding by the Railway of any certificate to which the

contractor may claim to be entitled to, or if the Railway

fails to make a decision within 120 days, then and in any

such case, but except in any of the „excepted matters‟

referred to n clause-63 of these conditions, the contractor,

after 120 days but within 180 days of his presenting his

final claim on disputed matters, shall demand in writing

that the dispute or difference be referred to arbitration.”

8. From a reading of the arbitration clause reproduced above, a

dispute or difference between the parties as to construction or

operation of the contract, or the respective rights and liabilities

of the parties on any matter in question, dispute or difference on

any account except in respect of “excepted matters” referred to

in Clause-63 of the General Conditions of Contract, is referable

to arbitration as provided in the arbitration clause. „Excepted

matters” mentioned in the arbitration clause in respect of which

the parties cannot seek arbitration are referable to clause 63,

which reads thus:

“63. Matters finally determined by he Railway.--- All

dispues and differences of any kind whatsoever arising out

of or in connection with the contract, whether during he

progress of the work or after its completion and whether

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befoe or after the determination of the contract shall be

referred by the contractor to the Railway and the railway

shall within 120 days after receipt of the Contractor‟s

representation make and notify decisions on all matters

referred to by the contractors in writing provided that

mattes for which provision has been made in clauses 8(a),

22(5), 39, 43, 45(a), 55, 55-A(5), 57, 57A, 61(1), 61(2) and

62(1)(b) of General Conditions of Contract or in any clause

of the Special Conditions of the Contract shall be deemed

as „excepted matters‟ and decisions of the Railway

authority, thereon shall be final and binding on the

contractor provided further that „excepted matters‟ shall

sand specifically excluded from the purview of the

arbitration clause and not be referred to arbitration.”

9. From a reading of Clause 63, it clearly transpires that the

matters for which provision has been made in Clauses 8(a),

22(5), 39, 43, 45(a), 55, 55-A(5), 57, 57A, 61(1), 61(2) and

62(1)(b) of General Conditions of Contract are deemed

“excepted matters” and taken specifically out of the purview of

the arbitration clause.

10. In the instant case, we are concerned with the matters for which

provision has been made in Clause 43(2), which, for facility of

reference is reproduced hereunder:-

“(2) Signing of “No Claim” Certificate.--- 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 Railway in

such form as shall be required by the Railway after he

works are finally measured up. The Contractor shall be

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debarred from disputing the correctness of the item covered

by “No Claim” Certificate or demanding a clearance to

arbitration in respect thereof.”

11. In view of the clear stipulation made in different clauses of the

General Conditions of Contract, which are backed by the

agreement executed between the parties in respect of the work

in question, it is beyond pale of any discussion that where

contractor has signed a „No Claim‟ Certificate in favour of the

Railways after the works are finally measured up, the contactor

shall be debarred from disputing the correctness of the items

covered by „No Claim Certificate‟ or demanding reference to

the arbitration in respect thereof.

12. The singing of „no claim certificate‟ by the contractor in lieu of

full and final settlement of his claim envisaged under Clause

43(2) of the General Conditions of Contract, is therefore, an

excepted item in terms of Clause 63 and, therefore, not

referable to arbitration under Clause 63 read with Clause

64(1)(i) of the General Conditions of Contract.

13. The petitioner has not disputed the execution of supplementary

agreement dated 19.04.2017 nor has he disputed the „No Claim

Certificate‟ signed and issued by him dated 15.06.2017. It is

also not seriously disputed by Mr. Amit Gupta, learned senior

counsel appearing for the petitioner that execution of „no claim

certificate‟ after having received the payment offered by the

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respondents is excepted matter and prima facie not arbitrable.

His contention, however, is that the supplementary agreement

as also „no claim certificate‟ was signed by the petitioner under

financial duress and, therefore, involuntary in nature.

14. Mr. Amit Gupta, however, raised a legal argument to come out

of the disability to seek reference to arbitration and submits that

the issue as to whether or not „no claim certificate‟ was signed

by the petitioner under financial duress is a question of fact,

which needs to be left to be determined by the arbitrator. He

would argue that once the Court is convinced with regard to the

existence of arbitration agreement, other issues, more

particularly the issues of facts, should be left to be determined

by the arbitrator.

15. Per contra, Mr. Harshwardhan Gupta, learned counsel

appearing for the respondents, would argue that in the instant

case, there is prima facie material on record to show that „no

claim certificate‟ was issued by the petitioner voluntarily and

under no duress and, therefore, an excepted matter. He would,

therefore, argue that arbitration clause in respect of the excepted

matter cannot be invoked nor arbitrator could be appointed to

arbitrate disputes which are rendered non-existent by signing

„no claim certificate‟.

AA No.5/2018 9

16. We have given thoughtful consideration to this aspect of the

matter as well. Supplementary agreement between the parties,

which is duly signed by the petitioner and the respondents, was

executed on 19.04.2017 in which the parties agreed that in

consideration of the payment already made, under the

agreement, the Principal Agreement would stand finally

discharged and all the terms and conditions including

arbitration clause rescinded. By virtue of the supplementary

agreement not only the parties agreed to supersede and rescind

the principle agreement but they also agreed to rescind all terms

and conditions thereof including arbitration clause. This was

followed by a „No Claim Certificate‟ issued on 15.06.2017. In

lieu of release of earnest money and security deposit and

issuance of completion certificate by the respondents and

receipt of final payment of the contract in question, the

petitioner executed an unconditional and unequivocal „No

Claim Certificate‟ for the said work.

17. We could not find any material or communication issued by the

petitioner between 19.04.2017 to 15.06.2017 ruing the

execution of supplementary agreement and discharge of the

Principal Agreement including terms and conditions thereof

including the arbitration clause. Rather, the petitioner with his

eyes wide open acknowledged the receipt of final payment of

the work and signed „No Claim Certificate” unconditionally and

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unequivocally. It is only after the petitioner got all the payments

under the contract including his earnest money and security

deposit etc, he raised the dispute by way of its communication

dated 22.06.2017. However, as per reply affidavit submitted by

the respondents, it was only on 04.09.2017 when the petitioner

sent a communication to the respondents for appointment of

arbitrator, which was duly replied by the respondents vide

communication dated 27.11.2017.

18. Be that as it may, the petitioner has not placed on record any

substantial evidence or material to demonstrate that signing of

„supplementary affidavit‟ and „no claim certificate‟ by the

petitioner was under financial duress or coercion by the

respondents. On the contrary, the respondents have, by placing

on record supplementary agreement dated 19.04.2017 and no

claim certificate dated 15.06.2017, have clearly proved that the

petitioner received the full and final payment under the contract

voluntary and executed the supplementary agreement

superseding the Principal Agreement along with terms and

conditions thereof including arbitration clause. They have also

successfully demonstrated that on receipt of full and final

payment under the Contract and in lieu of release of earnest

money and security deposit, the petitioner also executed „No

Claim Certificate” in terms of Clause 43(2) of the General

Conditions of Contract.

AA No.5/2018 11

19. That being the clear position emerging from the material on

record, it is difficult to believe and accept the contention of the

learned senior counsel appearing for the petitioner that the issue

as to whether or not the supplementary agreement and no claim

certificate were executed by the petitioner under financial

duress are disputed questions of fact required to be referred to

arbitration for determination.

20. Both sides have relied on respective case law to substantiate

their contentions. However, it would be suffice to say that these

proceedings have arisen under the J&K Arbitration and

Conciliation Act, 1997, which did not contain provision like

Subsection 6A, which was inserted in Section 11 of the

Arbitration and Conciliation act, 1996 (“Central Act”) by an

amendment Act of 2015. Section 6A, which was added by

amendment reads thus:

“11(6A) The Supreme Court or, as the case may be, the

High Court, while considering any application under sub-

section (4) or sub-section (5) or sub-section (6), shall,

notwithstanding any judgment, decree or order of any

Court, confine to the examination of the existence of an

arbitration agreement.”

21. This amendment made in Section 11 was omitted by an

Amendment Act of 2019 but Section 3 of the Amendment Act,

2019, insofar as it pertains to the omission has not yet been

AA No.5/2018 12

brought into force. The position in respect of the Central Act is,

therefore, that Section 6A continues to exist in the statute.

22. In that view of the matter, the position of Section 11 of the J&K

Arbitration and Conciliation Act, 1997 in respect of question of

law raised in this petition is the same as was obtaining before

23.10.2015 when Section 6A came to be inserted in section 11

of the Central Act and the legal position on the point is

elaborately discussed and laid down by the Supreme Court in

the case of Mayavti Trading Pvt. Ltd. v. Pradyuat Deb

Burman, (2019) 8 SCC 714. The Supreme Court took note of

the position of law as it was existing prior to the insertion of

Section 6A to Section 11 by the Amendment Act, 2015 and

referred with advantage paragraph Nos. 20 and 21 of the

judgment rendered in United India Insurance Company

Limited v. Antique Art Exports Private Limited, (2019) 5

SCC 362. Paragraph Nos. 20 and 21 of the judgment (supra) are

set out herein below:-

“20. The submission of the learned counsel for the respondent

that after insertion of sub-section (6-A) to Section 11 of the

Amendment Act, 2015 the jurisdiction of this Court is denuded

and the limited mandate of the Court is to examine the factum of

existence of an arbitration and relied on the judgment in Duro

Felguera, S.A. v. Gangavaram Port Ltd. [(2017) 9 SCC 729 :

(2017) 4 SCC (Civ) 764] The exposition in this decision is a

general observation about the effect of the amended provisions

which came to be examined under reference to six arbitrable

agreements (five agreements for works and one corporate

guarantee) and each agreement contains a provision for

arbitration and there was serious dispute between the parties in

reference to constitution of Arbitral Tribunal whether there has

to be Arbitral Tribunal pertaining to each agreement. In the facts

AA No.5/2018 13

and circumstances, this Court took note of sub-section (6-A)

introduced by the Amendment Act, 2015 to Section 11 of the Act

and in that context observed that the preliminary disputes are to

be examined by the arbitrator and are not for the Court to be

examined within the limited scope available for appointment of

arbitrator under Section 11(6) of the Act. Suffice it to say that

appointment of an arbitrator is a judicial power and is not a

mere administrative function leaving some degree of judicial

intervention; when it comes to the question to examine the

existence of a prima facie arbitration agreement, it is always

necessary to ensure that the dispute resolution process does not

become unnecessarily protracted.

21. In the instant case, prima facie no dispute subsisted after the

discharge voucher being signed by the respondent without any

demur or protest and claim being finally settled with accord and

satisfaction and after 11 weeks of the settlement of claim a letter

was sent on 27-7-2016 for the first time raising a voice in the

form of protest that the discharge voucher was signed under

undue influence and coercion with no supportive prima facie

evidence being placed on record in absence thereof, it must

follow that the claim had been settled with accord and

satisfaction leaving no arbitral dispute subsisting under the

agreement to be referred to the arbitrator for adjudication.”

23. The Supreme Court also held that the jurisdiction of the Chief

Justice or his nominee considering an application under Section

11(6) need not be confined merely to the examination of

existence of an arbitration agreement but could also extend

getting into certain preliminary questions such as stale claims,

accord and satisfaction having been reached etc etc. Hon‟ble

Supreme Court placed reliance on the judgment of SBP & Co

v. Patel Engineering Ltd. and another, (2005) 8 SCC 618 and

ONGC Mangalore Petrochemicals Limited v. ANS

Constructions Limited and another, (2018) 3 SCC 373.

Paragraph No. 31 of the ONGC Manglore Petrochemicals

Ltd (supra) is relevant for our purpose and is set out below:-

“31. Admittedly, no-dues certificate was submitted by the

contractee company on 21-9-2012 and on their request

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completion certificate was issued by the appellant

contractor. The contractee, after a gap of one month, that

is, on 24-10-2012, withdrew the no-dues certificate on the

grounds of coercion and duress and the claim for losses

incurred during execution of the contract site was made

vide letter dated 12-1- 2013, i.e. after a gap of 3 ½ (three-

and-a-half) months whereas the final bill was settled on 10-

10-2012. When the contractee accepted the final payment

in full and final satisfaction of all its claims, there is no

point in raising the claim for losses incurred during the

execution of the contract at a belated stage which creates

an iota of doubt as to why such claim was not settled at the

time of submitting final bills that too in the absence of

exercising duress or coercion on the contractee by the

appellant contractor. In our considered view, the plea

raised by the contractee company is bereft of any details

and particulars, and cannot be anything but a bald

assertion. In the circumstances, there was full and final

settlement of the claim and there was really accord and

satisfaction and in our view no arbitrable dispute existed so

as to exercise power under Section 11 of the Act. The High

Court was not, therefore, justified in exercising power

under Section 11 of the Act.”

24. Aforesaid discussion on the law leaves no manner of doubt that

law prior to 2015 Amendment, whereby Subsection 6A was

inserted to the Central Act was clear and unequivocal. The

Court exercising its jurisdiction under Section 11(6A) was not

denuded of its power to go into whether accord and satisfaction

had taken place. This legal position was, however, legislatively

overruled by insertion of Subsection 6A to Section 11 by way

of Amendment Act, 2015. Since no amendment ever took place

in the J&K Arbitration and Conciliation Act, 1997, as such, the

law laid down prior to 2015 Amendment to the Central Act

would be the law governing the instant case. As is clarified by

the Supreme Court in the case of National Insurance Co. Ltd.

AA No.5/2018 15

v. Boghara Polyfab Pvt. Ltd., (2009) 1 SCC 26, the scope of

intervention by the Court exercising jurisdiction under Section

11 of the Act is classified in three categories---

1. First category contains the issues which the Chief

Justice/ his designate will have to decide and these issues

are:-

a) Whether the party making the application has

approached the appropriate High Court?

b) Whether there is an arbitration agreement and

whether the party who has applied under Section

11 of the Act, is a party to such an agreement?

2. The second category of issues which the Chief

Justice/his designate may choose to decide are:

a) Whether the claim is a dead (long barred) claim or

a live claim?

b) Whether the parties have concluded the

contract/transaction by recording satisfaction of

their mutual rights and obligations or by receiving

the final payment without objection?

(Underlined by me)

3. Third category of issues which the Chief

Justice/his designate should leave exclusively to the

arbitral tribunal:

a) Whether a claim falls within the arbitration clause

(as for example, a matter which is reserved for

final decision of a departmental authority and

excepted or excluded from arbitration)?

b) Merits of any claim involved in the arbitration.

25. The instant case clearly falls in Clause (b) of second category of

issues and, therefore, it lies in the discretion of the Chief

Justice/his designate to either decide it himself or refer it to the

AA No.5/2018 16

arbitrator for adjudication. Obviously, in a case where the issue

with regard to recording of satisfaction of the mutual rights and

obligation by the parties is a disputed question of fact requiring

evidence for determination, it would be advisable to leave such

matter to be determined by the arbitral tribunal. However,

where there is no dispute with regard to the signing of/

acknowledgment of the discharge certificate/no claim certificate

and it is clearly demonstrable that such discharge voucher/no

claim certificate was signed by the party without any demur or

protest, the Chief Justice/his designate would not refer the

parties to arbitration when such matter is specifically excluded

from the purview of arbitration.

26. From voluntary singing of supplementary agreement

superseding the Principal Agreement including arbitration

clause contained therein and subsequent signing of „No Claim

Certificate‟ without any demur or protest, it is abundantly clear

that the dispute has been settled with accord and satisfaction

leaving no arbitral dispute subsisting under the agreement to be

referred to arbitrator for adjudication.

27. The petitioner, having executed the supplementary agreement to

which we have referred hereinabove at more than one places

and subsequently having issued „No Claim Certificate‟ without

any demur or protest, cannot be permitted to turn around and

AA No.5/2018 17

raise the dispute that, too, after he has derived all the benefits

under the supplementary agreement and the „no claim

certificate‟. Permitting the petitioner to raise the dispute with

regard to execution of these documents under financial duress

or otherwise would be allowing the petitioner to approbate and

reprobate. By executing these documents and, in lieu thereof,

the petitioner not only received the final payment in respect of

the work in question but also got the earnest money and security

deposit released in his favour. He raised the dispute with the

respondents only after receiving the benefits under the

supplementary agreement and the certificate of „no claim‟

executed by him.

28. The judgments cited by Mr. Amit Gupta, learned senior counsel

holding that while appointing arbitrator under section 11(6) of

the Act, the power and jurisdiction of the Chief Justice/his

designate is limited only to the determining of existence of

arbitration clause and all other questions should be left to be

determined by the arbitrator only elucidate the exposition of law

by the Supreme Court after insertion of Subsection 6A to

Section 11 of the Arbitration and Conciliation Act, 1996 by

2015 Amendment Act.

29. I have stated it earlier and is reiterated here that provisions

similar to Subsection 6A of Section 11 of the Central Act did

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not exist in the J&K Arbitration and Conciliation Act, 1997

(now repealed) and, therefore, the law, as it was laid down by

the Supreme Court, prior to 2015 Amendment, would govern

the case on hand.

30. For the going reasons, I find this petition under section 11(6) of

the J&K Arbitration and Conciliation Act, 1997 not

maintainable and the same is, accordingly, dismissed.

(Sanjeev Kumar)

Judge

JAMMU

13.02.2026

Vinod, Secy Whether the order is speaking : Yes

Whether the order is reportable: Yes