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Union Of India & Anr vs L.K. Ahuja & Co on 5 April, 1988

In Union of India v. L.K Ahuja and Co. four agreements were entered into between the contractor and the Union of India for the construction of certain quarters. All the four contracts were executed and completed by the contractor on diverse dates. The contractor accepted the four final bills and gave no Claim declaration in respect of the four contracts as in our case. Thereafter the contractor wrote a letter stating that a certain amount was due on account of the work executed and requested the authority to refer dispute to the arbitrator. A reply was sent stating that no dispute was left between the parties, and hence, there was no question of appointment of any arbitrator. The contractor subsequently filed an application under Section 20 of the Act. The Trial Court held that the application was barred by time and dismissed it. The High Court allowed the contractor's appeal. The question before the Supreme Court was whether the reference under Section 20 of the Act was time-barred. The Court while holding that the application under Section 20 was not barred by limitation held that "in order to be entitled to ask for a reference under Section 20, there must be an entitlement to money and a difference or dispute in respect of the same. It is true that on completion of the work, right to get payment normally arises and it is also true that on settlement of the final bill, the right to get further payment gets weakened but the Claim subsists and whether it does subsist, is a matter which is arbitrable." This authority no doubt states that even in a case where the payment is received on settlement of the final bill, the Claim can be made and it subsists for arbitration. However, it is not clear from the decision whether in that case the contract or had alleged that there was no accord and satisfaction in spite of the full settlement because the settlement was vitiated on one or the other ground.
Supreme Court of India Cites 14 - Cited by 87 - S Mukharji - Full Document
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