BEFORE THE

HON’BLE

ALLAHABAD HIGH COURT

Messrs Amar Nath Chand Prakash……………………………………. Appellant

v.

Messrs Bharat Heavy Electricals Limited…………………………… Respondent

MEMORANDUM ON BEHALF OF THE RESPONDENT

SUBMITTED BY:

ABHINAV SUROLLIA

ROLL NO. 07

SECTION-C

SEMESTER – I
 TABLE OF CONTENT

List of Abbreviations i

Index of Authorities ii

List of Cases iii

Statement of Facts 1

Issues Raised 3

Summary of Arguments 4

Written Pleadings 5

Prayer For Relief 8

 LIST OF ABBREVIATIONS

Hon’ble Honourable

& And

Ltd. Limited

B.H.E.L Bhara Heavy Electricals Limited

Sept. September

Sec. Section

Co. Company (Bharat Heavy Electricals Ltd.)

Rs. Rupees

SC Supreme Court

% per cent

Recd. Received
 INDEX OF AUTHORITIES

Statute:

 The Indian Contract Act, 1872- Section 63.

Books:

 The Indian Contract Act, 1872 (Bare Act), Universal Law Publishing Co. Pvt. Ltd.
 Halsbury’s Laws of England, Vol. V, 2nd Ed.
 LIST OF CASES

 Kapur Chand Godha v Mir Nawab Himayatalikhan Azamjah, AIR 1963 SC 250.
 Hari Chand Madan Gopal v. State of Punjab, AIR 1971 SC 381.

 STATEMENT OF FACTS

 Messrs Bharat Heavy Electricals Ltd. gave a contract to Messrs Amar Nath Chand
Prakash (appellant) for making certain construction work. The work was completed by the
first week of March 1965. Messrs Bharat Heavy Electricals Ltd prepared a final bill of the
work done by Messrs Amar Nath Chand Prakash. On 29-03-1965 Messrs Amar Nath Chand
Prakash signed a no claim declaration and also gave a receipt in token of accepting the
amount found due to to Messrs Amar Nath Chand Prakash. Messrs Amar Nath Chand
Prakash raised disputes in regard to some of the items of work, alleging short payment.
 As B.H.E.L already paid the amount due to Messrs Amar Nath Chand Prakash the Company
did not respond to this allegation. Subsequently Messrs Amar Nath Chand Prakash served a
notice upon the Company requiring it to appoint an arbitrator in terms of the arbitration
clause contained in the contract. This also failed to evoke any response from B.H.E.L.
Consequently on 16th Sept. Messrs Amar Nath Chand Prakash moved an application under
Sec. 20 Arbitration Act praying that the court may require the agreement to be filed in court
& refer the disputes between the parties to arbitration in accordance with the arbitration
agreement.
 The Co. contested this application. It Pleaded that Messrs Amar Nath Chand Prakash had
given a clear no claim certificate in final settlement of his claims in respect of the work done
under the contract, & that he accepted payment of Rs. 12,373.04 by means of a cheque dated
14-12-1965 in full and final settlement of his dues. This amounted to the discharge of the
contract, along with which the arbitration agreement extinguished; as such no dispute capable
of being referred to arbitration remained in existence. The lower court held that the
application under Sec. 20 of Arbitration Act was not maintainable accepting the plea raised
in bar by the B.H.E.L.
 In response to the appeal filed by the appellant, Messrs Amar Nath Chand Prakash, the
respondent Messrs Bharat Heavy Electricals Ltd. approaches this court to put in front of this
Hon’ble court their defence against the allegations alleged by the appellants.
 The final bill has at the end a printed declaration to the following effect:- “I have no other
claim outstanding against the Heavy Electricals (India) Ltd. for work done or for labour or
materials supplied or on any other account and the payment of this bill shall be in final
 settlement of all my claims in respect of the work to which Agreement/ work order No. 3/c-
vi/64 dated 20-11-1964 with the company relates.”
 This declaration was signed by the appellant. Just after that there is a memorandum or
payment in the final bill and thereafter column No. 5 deals with the receipt of payment; and it
says, "Received Rs. 12,374.04 as final payment in settlement of demand as per details above
on account of this work by cheque No. 007805, dated 14-12-1965. This is also signed by the
appellant. The signatures defacing the stamp are dated 29-3-1965 and by the side of the
signature, the appellant wrote the words under protest. It appears that the appellant signed the
declaration as well as the column No. 5 meant for receipt of the cheque on 29-3-1965 and
also made the endorsement of 'under protest' the same day, whereas the cheque was actually
prepared and delivered on 14-12-1965
 ISSUES RAISED

1. Whether the acceptance of payment can be less than the actual payment which can result
in discharge of the contract?
2. Whether the acceptance of payment under protest amounts to intention of full satisfaction
which further results in discharge of contract?
 SUMMARY OF ARGUMENTS

1. The acceptance of payment can be less than the actual payment.

a) The acceptance of payment can be less than the actual payment which further results
in discharge of the contract. In accordance with Sec. 63 of The Indian Contract Act,
1872, this can be proved very easily.

Sec. 63. Promises may dispense with or remit performance of promise:

Every promisee may dispense with or remit, wholly or in part, the performance of the
promise made to him or may extend the time for such performance, or may accept instead
of it any acceptance which he thinks fit.1

Illustration (b) of Sec. 63 provides a better understanding to the above mentioned point.

Illustration (b): A owes B Rs. 5000. A pays to B, and B accepts in satisfaction of the
whole debt, Rs. 2000 paid at the time and place at which the Rs. 5000 were payable. The
whole debt is discharged.

2. The acceptance of payment under protest amounts to intention of full satisfaction

which further results in discharge of contract.
Yes, the acceptance of payment under protest amounts to intention of full satisfaction
which further results in discharge of contract. The endorsement of ‘under protest’ made
by the appellant on the bill did not change the the situation. These words have no
technical meaning, unless accompanied with a statement of circumstances, showing that
they were used by way of notice or protest.

1
The Indian Contract Act, 1872 (Bare Act), Universal Law Publishing Co. Pvt. Ltd. p.30
 WRITTEN PLEADINGS

1. THE ACCEPTANCE OF PAYMENT CAN BE LESS THAN THE ACTUAL

PAYMENT.

It is submitted that Sec. 632 allows a party to a contract to dispense with the performance of the
contract by the other party, or to extend the time for performance or to accept any other
satisfaction instead of performance. Every promisee may dispense with or remit, wholly or in
part, the performance of the promise made to him or may extend the time for such performance,
or may accept instead of it any acceptance which he thinks fit.3
A owes B Rs. 5000. A pays to B, and B accepts in satisfaction of the whole debt, Rs. 2000 paid
at the time and place at which the Rs. 5000 were payable. The whole debt is discharged. 4 The
acceptance of a less sum of money where more is due, is a good discharge of the whole of
liability. The Hon’ble Supreme Court in the case Kapur Chand Godha v Mir Nawab
Himayatalikhan Azamjah5 held that where the liability was above twenty-seven lakhs of rupees
on Hyderabad. Hyderabad having been taken over, a committee was appointed to clear matters.
It offered twenty lakhs to the creditor in full satisfaction and he accepted it. Afterwards the
creditor sued the debtor for balance. The Hon’ble SC held that the appellant having accepted the
payment in full satisfaction of his claim was not entitled to sue. Similarly, in the case Hari
Chand Madan Gopal v. State of Punjab6 The Hon’ble SC held that if the government had
decided to recover only 40% and no more. The Government’s decision would amount to
remitting a part of the debt due by the appellants. Therefore the Government cannot ask to
recover more than the 40%.
In the present case Messrs Amar Nath Chand Prakash accepted a payment less than the actual
payment from Messrs Bharat Heavy Electricals Ltd. Therefore they remit their right to ask to
recover more according to Sec. 63 of The Indian Contract Act, 1872.

2
Indian Contract Act, 1872.
3
The Indian Contract Act, 1872 (Bare Act), Universal Law Publishing Co. Pvt. Ltd. p.30
4
Illustration(b),Sec.63,Indian Contract Act, 1872.
5
AIR 1963 SC 250.
6
AIR 1971 SC 381.
Hence, it is most humbly submitted that the appellant by their act remit their Right to recover
more and therefore in the present matter acceptance of payment can be less than the actual
payment.

2. THE ACCEPTANCE OF PAYMENT UNDER PROTEST AMOUNTS TO

INTENTION OF FULL SATISFACTION WHICH FURTHER RESULTS IN
DISCHARGE OF CONTRACT.

The signing of the no claim declaration and the grant of a full settlement receipt was in law the
discharge of the contract. The contractor could not thereafter raise any dispute as to the payment
under the contract. It was urged that the endorsement of 'under protest' made by the appellant on
the bill did not change the situation.
Sir Rolland Burrows in their observation of Lord Langdale, M.R. In Re:Massey(1845)7 “It is
said that the money was received by the petitioner, and the receipt given under protest. These
words are often used on these occasions, but they have no distinct technical meaning, unless
accompanied with a statement of circumstances, showing that they were used by way of notice or
protest, reserving to the party, by reason of such circumstances, a right to taxation,
notwithstanding such payment. The words have no distinct meaning by themselves, and amount
to nothing unless explained by the proceedings and circumstances”
This shows that there is no distinct meaning in the words “under protest” used by the appellant,
Messrs Amar Nath Chand Prakash on the final bill given by the respondents. Therefore they
accept the final payment and there is discharge of the contract which remits the future
performance. Thus the respondent, Messrs B.H.E.L are not liable to pay more to the appellant.
Also the intention of Messrs Amar Nath Chand Prakash is not to safeguard his right to ask to
recover more but the intention of the appellant is not to discharge the contract. The fact that he
did not exercised his right to recover in the earlier bills shows that there is no intention to protest.
His mere intention is to claim for more even after accepting the final payment which is unlawful
according to Sec 63 of The Indian Contract Act.
The Supreme Court in the case of Kapurchand Godha v. Himayatalikhan Azamjah8 throws light
on this above mentioned point. In this case the appellant at first gave a receipt stating, inter alia,

7
Halsbury’s Laws of England, Vol. V Ed.2nd, p.361.
8
AIR 1963 SC 250.
that he has recd. a sum of Rs. 8,75,000/- in full and final payment of the balance of Rs. Twenty
lacs allowed by the government in respect of his claim, reserving, however, the right to recover
the balance amount due him under the said pro note. The authorities, however, refused to make
the payment on such a conditional receipt. Thereupon the appellant recorded a satisfaction of full
payment and granted a receipt with unconditionally stated recd. payment in full. The SC held
that Sec 63 of Indian Contract Act read with illustration (c) applied in those facts and the
appellant having accepted the final payment cannot sue to recover more.
Similarly in the present mentioned facts the appellant, Messrs Amar Nath Chand Prakash having
accepted the final payment cannot sue to recover for more as they exercised their right to remit
the contract as per Sec 63 of The Indian Contract Act. Hence it is beyond doubt established that
the acceptance of payment under protest amounts to intention of full satisfaction which further
results in discharge of contract.
 PRAYER FOR RELIEF

Therefore in the lights of the facts stated, authorities cited, arguments advanced, the respondent
humbly requests the Hon’ble Court to adjudge and declare that:-

2. The decision of the lower court must be upheld &

3. The appeal must be dismissed.

And pass any other order the court may deem fit in the interests of equity, justice and good
conscience.

COUNSEL ON BEHALF OF RESPONDENT OCTOBER 17TH

ABHINAV SUROLLIA