Claims After Final Bill Valid

The Supreme Court has held that merely because a contractor had accepted the final bill for the work done, it would not follow that he could not raise a further claim. The apex court was deciding a dispute between Bharat Coking Coal and Annapurna Constructions, which had gone in for arbitration of disputes.

The parties had entered into a contract for building houses and the construction was to be completed in four months. The work could not be completed within the prescribed time and disputes arose between them over penalty and other clause in the contract.

The chief engineer of Bihar was named the arbitrator. He awarded a sum in favour of the contractor with 18 per cent interest.

 

When the award was sent for the approval of the subordinate judge of Dhanbad, Bharat Coking Coal filed several objections. They were rejected by the judge and the Patna High Court.

Bharat Coking Coal argued that having accepted the final bill, a further claim by the contractor was not admissible. It was also claimed that the company had granted a 95 per cent advance without interest as a special case. Thus, the arbitrator seriously erred in giving an award in favour of the contracting company.

The latter contended that the arbitrator had given a reasoned award, and the courts should not interfere with his finding of facts.

In this case, the contractor had not stated categorically while accepting the bill that he would not raise any further claim.

In the absence of such a declaration, the contractor could not be precluded from raising any claim, the apex court emphasised. Since the disputes involved questions of fact, the apex court appointed a new arbitrator, who will re-examine the issues.