No Claim and No Demand Certificates Bar Further Claims; Appellate Bench Declines Interference Under Section 37

A bench of Justice Anil Kshetrapal and Justice Amit Mahajan heard an appeal by M/s L and D JV challenging the Single Judge's dismissal under Section 34 of the Arbitration and Conciliation Act, 1996 of an arbitral award dated 04.07.2024. The appeal raised the limited question whether this Court, in exercise of appellate jurisdiction under Section 37, ought to have interfered with the Single Judge's order when the arbitral tribunal had found that the claimant was barred from raising claims by virtue of executed No Claim/No Demand certificates.

The Court summarised that it would not re-appreciate evidence or disturb concurrent findings of fact unless the award suffered from perversity, patent illegality or offended the fundamental policy of Indian law. The bench upheld the arbitral tribunal's conclusion that the execution of a No Claim Certificate, Full and Final Settlement Certificate and a No Demand Certificate dated 20.05.2020 "stood precluded" the appellant "from raising any further monetary claims in relation to the contract works" and treated that finding as determinative of the claim petition. The Court observed that the "operative part of the Award is one of dismissal of the claims, and not the intermediate reasoning recorded while examining individual issues." The Court, in its reasoning, observed: "At the outset, it is necessary to bear in mind the limited scope of interference by this Court while exercising appellate jurisdiction under Section 37 of the 1996 Act. It is well settled that an appeal under Section 37 is not in the nature of a regular first appeal and does not permit re-appreciation of evidence or re-examination of factual findings returned by the Arbitral Tribunal. Interference is warranted only where the order passed under Section 34, or the award itself, is shown to suffer from perversity, patent illegality apparent on the face of the record, or is in conflict with the fundamental policy of Indian law. If the view taken by the learned Arbitrator is a plausible one, the Court exercising jurisdiction under Sections 34 or 37 cannot substitute its own view merely because another interpretation may also be possible."

Background

The dispute arose from a 2013 works contract awarded by Container Corporation of India Ltd. to M/s L and D JV for earthwork and allied civil works at a Container Freight Station in Vallarpadam, Cochin. The contract was an item-rate contract governed by BOQ, General and Special Conditions. The scheduled completion was 01.01.2015, but work was certified complete on 26.06.2017. During execution, the contractor alleged that additional and rectification works had been carried out under compulsion and that payments were delayed and deductions were wrongful; the respondent denied liability, asserting compliance with contractual terms.

The appellant referred disputes to arbitration and sought amounts for extra/variation works, deductions, earnest money refund and interest on delayed payment. The tribunal framed issues and, while making some favourable observations under Issue Nos.2 and 3, ultimately found that the appellant had not substantiated extra works, that the claim for interest was time-barred, and crucially under Issue No.7 held that the executed No Claim/No Demand certificates barred the appellant from further monetary claims. The appellant challenged the award under Section 34; the Single Judge dismissed the petition, and the appellant pursued the present appeal under Section 37.

The Division Bench noted established authorities and the limited appellate scope under Section 37, rejected submissions that the award was internally inconsistent merely because intermediate findings appeared favourable, and treated the No Claim/No Demand certificates as an independent and determinative bar. On limitation, the Court agreed with the tribunal that claims for interest, raised first in 2021 though payments had been made by September 2016, were time-barred. The bench found no perversity, patent illegality or conflict with public policy and dismissed the appeal. No interim directions were issued and the pending application stood closed.

Case Details: Case No.: FAO(OS)(COMM) 10/2026 Case Title: M/s L and D JV v. Container Corporation of India Ltd. Appearances: For the Petitioner(s): Mr. Sarthak Sawhney, Advocate For the Respondent(s): Mr. R. K. Joshi, Mr. Ojusya Joshi and Mrs. Shabnam Joshi, Advocates