The Delhi High Court in the case of M/s. Classic Motors Ltd. vs.

Maruti
Udyog 1996 SCC OnLine Del 872, relying upon the judgement of North
Ocean Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. 1978 (3) All.
E.R. 170, held the following;

“(32) Let me now examine and apply the principle of the aforesaid factors in
order to test the plea of the plaintiff. The plaintiff admittedly did not make
any protest before entering into the agreement but on the other hand, went
ahead with its performance. The validity of a clause of the agreement is now
being sought to be challenged when it was terminated. Even in the earlier
two petitions filed by the plaintiff under Section 20 of the Arbitration Act,
the plaintiff did not challenge the validity of the agreement. Thus, the
plaintiff has taken full advantage under the agreement and reaped benefits
from it and now when the same was terminated, the plaintiff immediately
rushes to this court challenging the validity of the agreement. Therefore, the
first two questions are to be answered in the negative i.e. the plaintiff did
not raise any protest before entering into or soon after entering into the
agreement and also did not take any steps to avoid the agreement. Rather it
affirmed the agreement and reaped all the benefits of the agreement from
1983 onwards till it was terminated. After having done so, the plaintiff is not
entitled to challenge the agreement. In North Ocean Shipping Co. Ltd. Vs.
Hyundai Construction Co. Ltd.; reported in1978(3) All. E.R. 170, it has been
held that if the party complaining of an unfair contract does not do anything
to avoid it and accepts it then the complaining party cannot make a
grievance of the contract. Therefore, the third factor also stands answered.
So far the question of independent advice is concerned, from the facts
delineated above, it is apparent that PW1, the Chairman and Managing
Director of plaintiff is a rich and flourishing businessman having number of
properties and various businesses. He, Therefore, had full knowledge as to
the implication of the terms of the agreement and he also had access to the
best of advices and suggestions. But inspire of being placed at such an
advantageous position PW1 did not react in any manner to the terms of the
agreement, rather continued to reap the benefits under the agreement.
(33) From the facts available before me, it is crystal clear that the defendant
did not exercise any duress on the plaintiff or that the agreement was
arrived at with the plaintiff without its free consent.

(34) The aforesaid tests when applied to the facts of the present case bear
out that the agreement was free and not vitiated by any coercion or duress.”

The Supreme Court in the case of Union of India (UOI) and Ors. vs. Master
Construction Co. (2011) 12 SCC 349 held the following;

“24. In our opinion, there is no rule of the absolute kind. In a case where the
claimant contends that a discharge voucher or no-claim certificate has been
obtained by fraud, coercion, duress or undue influence and the other side
contests the correctness thereof, the Chief Justice/his designate must look
into this aspect to find out at least, prima facie, whether or not the dispute
is bona fide and genuine. Where the dispute raised by the claimant with
regard to validity of the discharge voucher or no-claim certificate or
settlement agreement, prima facie, appears to be lacking in credibility, there
may not be necessity to refer the dispute for arbitration at all.

A bald plea of fraud, coercion, duress or undue influence is not enough and
the party who sets up such plea must prima facie establish the same by
placing material before the Chief Justice/his designate. If the Chief
Justice/his designate finds some merit in the allegation of fraud, coercion,
duress or undue influence, he may decide the same or leave it to be decided
by the Arbitral Tribunal. On the other hand, if such plea is found to be an
after-thought, make-believe or lacking in credibility, the matter must be set
at rest then and there.

28. The above certificates leave no manner of doubt that upon receipt of the
payment, there has been full and final settlement of the contractor's claim
under the contract. That the payment of final bill was made to the
contractor on June 19, 2000 is not in dispute. After receipt of the payment
on June 19, 2000, no grievance was raised or lodged by the contractor
immediately. The concerned authority, thereafter, released the bank
guarantee in the sum of Rs. 21,00,000/- on July 12, 2000. It was then that
on that day itself, the contractor lodged further claims.

Mere allegation that no-claim certificates have been obtained under financial
duress and coercion, without there being anything more to suggest that,
does not lead to an arbitrable dispute.

30. The conduct of the contractor clearly shows that 'no claim certificates'
were given by it voluntarily; the contractor accepted the amount voluntarily
and the contract was discharged voluntarily.”

The Supreme Court in the case of New India Assurance Co. Ltd vs Genus
Power Infrastructure Ltd (2015) 2 SCC 424 relying upon the judgement of
Union of India vs. Master Construction Co. (2011) 12 SCC 349 held the
following;

“9. In our considered view, the plea raised by the respondent is bereft of any
details and particulars, and cannot be anything but a bald assertion. Given
the fact that there was no protest or demur raised around the time or soon
after the letter of subrogation was signed, that the notice dated 31.03.2011
itself was nearly after three weeks and that the financial condition of the
respondent was not so precarious that it was left with no alternative but to
accept the terms as suggested, we are of the firm view that the discharge in
the present case and signing of letter of subrogation were not because of
exercise of any undue influence. Such discharge and signing of letter of
subrogation was voluntary and free from any coercion or undue influence.
In the circumstances, we hold that upon execution of the letter of
subrogation, there was full and final settlement of the claim. Since our
answer to the question, whether there was really accord and satisfaction, is
in the affirmative, in our view no arbitrable dispute existed so as to exercise
power under section 11 of the Act.”

The Supreme Court of India in the case of ONGC Mangalore

Petrochemicals Ltd. vs. ANS Constructions Ltd. and Ors. (2018) 3 SCC
373 held the following;

“25. Admittedly, No-Dues Certificate was submitted by the contractee-

Company on 21.09.2012 and on their request Completion Certificate was
issued by the Appellant- Contractor. The contractee, after a gap of one
month, that is, on 24.10.2012, withdrew the No Dues Certificate on the
grounds of coercion and duress and the claim for losses incurred during
execution of the Contract site was made vide letter dated 12.01.2013, i.e.,
after a gap of 3 1/2 (three and a half) months whereas the Final Bill was
settled on 10.10.2012. When the contractee accepted the final payment in
full and final satisfaction of all its claims, there is no point in raising the
claim for losses incurred during the execution of the Contract at a belated
stage which creates an iota of doubt as to why such claim was not settled at
the time of submitting Final Bills that too in the absence of exercising
duress or coercion on the Contractee by the Appellant-Contractor. In our
considered view, the plea raised by the contractee-Company is bereft of any
details and particulars, and cannot be anything but a bald assertion. In the
circumstances, there was full and final settlement of the claim and there
was really accord and satisfaction and, in our view, no arbitrable dispute
existed so as to exercise power Under Section 11 of the Act. The High Court
was not, therefore, justified in exercising power Under Section 11 of the
Act.”