Charge of coercion must be proved

A mere allegation by a contractor that he issued a ‘no-dues certificate’ under duress and coercion cannot be accepted, provided there is sufficient evidence for it, the Supreme Court stated last week, while allowing the appeal of ONGC Mangalore Petrochemicals Ltd against the order of the Karnataka High Court. The high court had appointed an arbitrator in the dispute between ONGC and ANS Constructions Ltd. After completing the work, ONGC paid all dues and the contractor issued the no-dues certificate. But 12 days later, the firm withdrew the certificate, alleging that it was coerced to do it due to financial constraints. It moved the high court for arbitration and its prayer was allowed. ONGC appealed before the Supreme Court. It said that a bald assertion of coercion would not warrant appointment of an arbitrator when all dues have been paid by ONGC and accepted by the contractor.