ISLAMABAD: The Supreme Court on Wednesday ruled that an unconditional No Demand Certificate (NDC) signed by a contractor constitutes a final settlement of all claims and cannot subsequently be challenged.
The ruling came from a three-judge bench headed by Chief Justice of Pakistan (CJP) Yahya Afridi and comprising Justice Irfan Saadat Khan and Justice Aqeel Ahmed Abbasi, which dismissed an appeal filed by Messrs Ghulam Siddiqi, Ghulam Habib and Company (Pvt) Ltd, Peshawar, against a Feb 29 order of the Peshawar High Court (PHC).
The SC also observed that, while exercising its jurisdiction under Article 185(3) of the Constitution, it would not interfere with concurrent findings of fact unless they were shown to suffer from gross misreading or non-reading of evidence, perversity or arbitrariness.
The case arose from a 1993 contract awarded to Messrs Ghulam Siddiqi, Ghulam Habib and Company (Pvt) Ltd for the construction of a 240-bed facility at Hayatabad Medical Complex, Peshawar. Disputes emerged during the project over delays and claims for idle charges and price escalation.
Following the project’s completion in 1999, the company signed an NDC explicitly acknowledging receipt of more than Rs88 million as full and final payment for all services rendered.
In 2008, the company sought to reopen the matter by filing an application under Section 20 of the Arbitration Act, 1940, seeking referral of the disputes to arbitration. However, both the civil court and the PHC dismissed the application, a decision that was upheld by the Supreme Court.
Authored by Justice Irfan Saadat Khan, the six-page judgement explained that the execution of the NDC amounted to a conscious representation that no further payment remained due.
The judgement noted that the petitioner failed to produce any evidence that the certificate had been signed under coercion or as a result of fraud, pointing to the absence of any contemporaneous protest or reservation.
Referring to Article 114 of the Qanun-e-Shahadat Order, 1984, which embodies the doctrine of estoppel, the court observed that a party cannot deny a fact after inducing another party to rely upon it.
The judgement emphasised the commercial importance of NDCs in public procurement, stating that such certificates enable employers to close accounts and bring contractual relationships to a final conclusion.
Allowing parties to reopen settled matters, the court said, would undermine the sanctity of final settlements, create uncertainty in concluded commercial transactions and expose public funds to stale and belated claims.
“The commercial significance of an NDC cannot be understated,” the judgement observed, adding that its execution ordinarily marks the culmination of the contractual relationship between the parties, allowing employers to settle liabilities and proceed on the legitimate assumption that no further claims remain outstanding.
The court stressed that commercial certainty and finality were indispensable attributes of contractual dealings, particularly where public funds were involved. Courts, it added, should be reluctant to allow a party to reopen a concluded transaction after unequivocally accepting final payment unless the acknowledgement was obtained through fraud, coercion, misrepresentation or any other legally recognised vitiating circumstance.
Concluding the judgement, the SC held that it had found no illegality or irregularity in the concurrent findings of the lower courts. It therefore declined to grant leave to appeal, declaring the petition devoid of merit and dismissing it.
Published in Dawn, August 6th, 2026