J&K&L High Court Dismisses Contractor's Arbitration Plea Against Railways After He Issued Unconditional No Claim Certificate

The Jammu & Kashmir& Ladkah High Court on 13 February 2026 held that once a contractor voluntarily executes a supplementary agreement rescinding the original contract and issues an unconditional “No Claim Certificate,” no arbitral dispute survives.

A Bench of Justice Sanjeev Kumar dismissed the petition filed by H.P. Singh & Co. under Section 11(6) of the J&K Arbitration and Conciliation Act, 1997, seeking appointment of an independent arbitrator against the Union of India and Northern Railways.

The Bench held noted that “permitting the petitioner to now raise claims would amount to allowing him to 'approbate and reprobate.'"

The petitioner had entered into a contract in 2007 for loading, unloading, and stacking railway materials across several northern states for approximately Rs. 1.41 crore. The petitioner alleged that the Railways failed to provide work orders on time, causing a project intended for six months to extend for over ten years, with only 50% of the work executed. They also claimed that performance guarantees and security deposits, totaling roughly Rs. 4.91 lakh, were illegally retained.

On 19 April 2017, both parties executed a Supplementary Agreement expressly superseding and rescinding the principal contract, including the arbitration clause. Thereafter, the petitioner received the final payment, release of earnest money and security deposits, and executed an unconditional “No Claim Certificate” on 15 June 2017.

The petitioner later contended that these documents were signed under coercion and financial duress. The Court, however, noted that there was no material to support this claim. It held that the petitioner had accepted the full and final settlement “with eyes wide open” and that allowing arbitration at this stage would be contrary to established legal principles.

The Court relied on Mayavati Trading and National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd. to note that where discharge vouchers or No Claim Certificates are voluntarily signed and the contract is superseded, no arbitrable dispute survives.

Since the petitioner had voluntarily executed the supplementary agreement rescinding the arbitration clause and subsequently issued a No Claim Certificate without protest, the dispute was deemed settled by accord and satisfaction.

Accordingly, the Court dismissed the petition under Section 11(6), holding that no arbitral dispute remained for adjudication.