INDIAN OIL CORPORATION LIMITED versus NCC LIMITED

Citation: [2022] 13 S.C.R. 660 · Decided: 20-07-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Disposed off

Cited by 2 judgment(s) · cites 12 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 13 S.C.R.
   [2022] 13 S.C.R. 660
660
INDIAN OIL CORPORATION LIMITED
v.
NCC LIMITED
(Civil Appeal No. 341 of 2022)
JULY 20, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Arbitration and Conciliation Act, 1996 – ss.11(6), 11(6-A),
16 – High Court in exercise of powers u/s.11(6) appointed the
Arbitrators to adjudicate and resolve the disputes between the
parties arising out of the respective contracts – Correctness of –
Held: The issue w.r.t ‘accord and satisfaction’ of claims is seriously
disputed and is debatable – Whether, in view of the acceptance of
Rs.4,53,04,021/- by the respondent which was released by petitioner
on the offer/letter made by the respondent there is an instance of
‘accord and satisfaction’ of the claims is a good and reasonably
arguable case – It cannot be said to be an open and shut case –
Therefore, even when it is observed and held that such an aspect
with regard to ‘accord and satisfaction’ of the claims may/can be
considered by the Court at the stage of deciding s.11 application, it
is always advisable and appropriate that in cases of debatable and
disputable facts, good reasonably arguable case, the same should
be left to the Arbitral Tribunal – Therefore, High Court committed
no error in observing that aspects with regard to ‘accord and
satisfaction’ of the claims or where there is a serious dispute will
have to be left to the Arbitral Tribunal – However, at the same time,
the conclusion arrived at by the High Court that after the insertion
of Sub-Section (6-A) in s.11 scope of inquiry by the Court in petition
is confined only to ascertain as to whether or not a binding
arbitration agreement exists qua the parties before it, which is
relatable to the disputes at hand is not agreed with – Though, the
Arbitral Tribunal may have jurisdiction and authority to decide the
disputes including the question of jurisdiction and non-arbitrability,
the same can also be considered by the Court at the stage of deciding
s.11 application, if the facts are very clear and glaring and in view
of the specific clauses in the agreement binding between the parties,
whether the dispute is non--arbitrable and/or it falls within the
excepted clause – Even at the stage of deciding s.11 application,
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the Court may prima facie consider even the aspect with regard to
‘accord and satisfaction’ of the claims – In Civil Appeal No.341/
2022, the Arbitrator shall first decide the aspect with regard to
‘accord and satisfaction’ of the claims and arbitrability of the
disputes with regard to such claims by deciding an application u/
s.16 which is reportedly pending – Arbitrator shall first decide the
jurisdiction of the Arbitral Tribunal and the arbitrability of the claims
– In Civil Appeal No.342/2022, impugned judgment and order
passed by the High Court referring the dispute between the parties
to arbitration and appointing the Arbitrator is set aside – Similarly,
in Civil Appeal No.343/2022, , the impugned judgments and orders
are set aside – Further, in Civil Appeal No.344/2022, impugned
judgment and order passed by the High Court is modified – Only
one claim of the respondent which is declared by the General
Manager as a Notified Claim shall have to be referred to arbitration
and the Arbitrator shall adjudicate only that claim which is declared
by the General Manager as a Notified Claim and the Arbitral
Tribunal shall not have any jurisdiction to adjudicate on any other
claims which as such are not declared as Notified Claims.
Disposing of the appeals, the Court
HELD: 1.1 It is the case on behalf of the petitioner IOCL
that the IOCL had settled the claim of respondent – NCCL
accepting NCCL’s offer to grant extension of time; not to give
price adjustment of over 4% of the total contract value and
consequently IOCL condoned the delay of 1493 days and granted
extension of time without applying any price discount. Further
for the delay of 65 days, IOCL applied the price discount of
Rs.6,44,40,021/- i.e. 4% of the total value of contract and
thereafter IOCL released the payment of Rs.4,53,04,021/- against
NCCL’s final bill (adjusting price discount of Rs.6.4 Crores as
against Rs.14.8 Crores) and also returned NCCL’s Bank
Guarantee which came to be fully accepted by the respondent
NCCL. It is the case of IOCL that thereafter, it was not open for
the respondent to raise any further claim. Therefore, it is the
case on behalf of the petitioner that, there being ‘acco

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