Business Law: Forcibly obtained "No Claim Certificate" from contractor does not prevent him from going to Court

Many Government Contractors face this problem. While releasing last Bill, the government often insist on a No Claim Due Certificate from contractor.


To get payment of last bill, the contractors often sign such certificates.


Thereafter if contractor goes to Court, the Government shows 'No Due Certificate' signed by Contractor.


The Court dismisses case of Contractor saying that, since the contractor has already signed a "No Due No Claim Certificate", his case is not maintainable.


Supreme Court took notice of this general practice and said that, even if No Claim Certificate is issued, if contractor is able to establish his claim by oral and documentary evidence, his claim should be considered.


Case of R.L. Kalathia & Co V/s Gujarat 2011 (1) SCALE 441


Haresh Raichura

16/6/12