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Food Corporation of India Vs. Pratap Kundu [29/11/19]

Section

Food Corporation of India Vs. Pratap Kundu

[Civil Appeal No. 9127 of 2019 arising from SLP (C) No. 21970 of 2019]

[Civil Appeal No. 9128 of 2019 arising from SLP (C) No.28248
of 2019]

M.R. SHAH, J.

1.Delay condoned. Leave granted.

2. Both these appeals which, as such, can be said to be cross
appeals arise out of the impugned judgment and order dated 12.04.2019 passed by
the High Court of Calcutta in F.M.A. No.1168 of 2017, filed by the original
appellants Food Corporation of India and others.

3. The facts leading to the present appeals in nutshell are as
under: By judgment and order dated 23.06.1998, the Calcutta HighCourt in Writ
Petition No. 1491 of 1997 filed by the contract casual labourers supplied by an
earlier contractor for the Bikna Depot directed that the contract casual
labourers would be entitled to payment of wages equivalent to Class IV
employees. The appeal filed by the Food Corporation of India (for short ‘FCI)
came to be dismissed by the Division Bench of the High Court on 16.07.1998. The
judgment and order passed by the Division Bench of the High Court dated 16.07.1998 was challenged by the
FCI before this Court by way of Civil Appeal Nos. 60646065 of 1998.

That on 16.12.1999 after the earlier contract period came to an
end, the appellant FCI floated tender for appointment of Handling and
Transport Contractor for the Bikna Depot. The respondent contractor submitted
his tender in which he quoted 471% above the schedule of rates fixed in the
tender. Appendix VIII of the tender provided the schedule of rates for the
contract and printed rates were provided on all items. The tenderer was required to quote rates above the schedule rates provided in the contract. Item No. 24 was for supply of casual labour. That the aforesaid Civil
Appeals arising out of special leave petitions were pending before this Court
so far as Item No. 24 which was for supply of casual labour and therefore it
was stated in the tender that “relevant rate of wages is to be paid and such
rate shall abide by the decision of pending SLP as filed by FCI in the Honble
Supreme Court”.

That by judgment and order dated 28.09.2000, this Court
dismissed the aforesaid Civil Appeal Nos. 60646065 of 1998 upholding the
judgment of the Division Bench of the High Court dated 16.07.1998. That vide
communication dated 17.01.2000, tender of the respondent was accepted and he
was appointed as Handling and Transport Contractor for a period of two years at
the negotiated rate of 471% ASOR (above the schedule rates). That the original
contract was meant for a period of two years, i.e., up to 16.01.2002. That
after the original contract was over, the respondentcontractor submitted a bill
dated 19.07.2002 claiming ASOR of 471% on the amount paid to the contract
casual labourers. In the meantime, one contempt petition was filed before the
High Court alleging noncompliance of the earlier judgment and order passed by
the learned Single Judge, confirmed up to this Court. The High Court vide
judgment and order dated 04.04.2003 convicted the officers of the FCI for contempt
of court and sentenced them to undergo three months imprisonment and fine for
violation of the orders for nonpayment to the contract casual labour. The order
passed by the High Court in the contempt petition was the subject matter before
this Court in Civil Appeal Nos. 94729473 of 2003.

This Court stayed the further proceedings before the High Court.
That the demand of the contractor claiming ASOR of 471% on the amount paid to
the contract casual labourers was rejected by the FCI. The contractor filed
Writ Petition No. 7790 of 2004 seeking, inter alia, additional amount for
payment of the contract casual labourers. By judgment and order dated
14.01.2010, this Court disposed of Civil Appeal Nos. 94729473 of 2003 and
directed the FCI to make payment of wages to the workmen in ScaleII, as revised from time to time, and also directed that the arrears and wages should be directly paid to the workmen and legal representatives of the workers without involving any contractor or other agency. It was also directed that once the payments were made, the sentence awarded would stand set aside.

That thereafter
contempt petition Nos. 5657 of 2011 were filed by the contract casual labourers
alleging noncompliance of order dated 14.01.2010 passed in Civil Appeal Nos.
94729473 of 2003 passed by this Court. The same came to be dismissed by
this Court by order dated 04.07.2011. That in Writ Petition No. 7790 of 2004
filed by the contractor, the High Court vide order dated 08.12.2011 directed the
CMD of FCI to pass a reasoned and speaking order on the grievance raised by the
contractor. The CMD of FCI passed a detailed speaking order dated 15.03.2012
holding, inter alia, that the contractor was not entitled to claim raised by
him regarding 471% of ASOR on the wages actually paid to the casual labour
because the claim was contrary to the contract between the parties. The
contractor amended the aforesaid petition. In the aforesaid amended writ
petition No. 7790 of 2004, the contractor prayed for the following reliefs:

“b) A writ in the nature of Mandamus commanding the respondents
and their men and agents to make payment A.S.O.R as per the bill submitted by the petitioner in terms of
Clause 24 of the tender at the rate of 471% A.S.O.R. above the Schedule Rate
immediately being Annexure “P4” and “P11” to this writ petition and further
commanding the respondents to delete the liability as fixed up upon the
petitioner towards payment of E.P.F., Administrative Charges and Income Tax
liability by the District Manager, Food Corporation of India, Bankura vide his
letter dated 24.04.2004 and the statement annexed thereto being Annexure “P10″ to
the writ petition.”

3.1. That the learned Single Judge of the High Court, by judgment and order dated 12.04.2016, allowed the aforesaid Writ Petition No. 7790 of
2004 and quashed and set aside the speaking order dated 15.03.2012 passed by
the CMD, FCI and directed the CMD to verify the bill and make payment of the unpaid
dues with liberty to deduct the payment already made.

3.2 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Single Judge, the FCI preferred appeal before
the Division Bench of the High Court being MAT No. 1151 of 2016/F.M.A. 1168 of
2017. That by the impugned judgment and order, the High Court has disposed of the
appeal with the following directions:

“(a) the appellant will furnish details to the Chairman of how
the Supreme Court judgment and order dated 14th January, 2010 was applied to fix the differential daily rate of
casual labourers between Rs.308.85/per day and Rs.353.19/per day between January and March, 2000 and
October to December, 2001 respectively and the differential rate for the subsequent period up to July, 2004.

(b) the Chairman shall also determine the exact amount of wages
that was payable, applying the above Supreme Court judgment the amount that was
actually paid by the appellant directly to the labourers and the wages
outstanding, if any. According to the said Supreme Court judgment, such
outstanding wages is to be paid directly to the workers/their heirs. In fact,
the said judgment of the Supreme Court dated 14th January,
2010 has left open other issues to be determined. One such issue is the amount
representing the profit receivable by the respondent. The Chairman will determine the profit to be earned by the
respondent out of this contract, in accordance with law.He shall make the determination with intelligible reasons within
four months of communication of this order, upon hearing the parties. If any amount is determined by the Chairman
to be payable to the respondent the same shall be released by the appellant to
him within 8 weeks of making the determination.”

3.3 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, both the FCI as well as the contractor have
preferred the present appeals.

4. Shri N.K. Kaul, learned Senior Advocate has appeared on behalf of the FCI and Mrs. Meenakshi Arora, learned Senior Advocate has appeared on behalf
of the Contractor in respective appeals.

4.1 Shri N.K. Kaul, learned Senior Advocate appearing on behalf of the FCI has vehemently submitted that as such the High Court in the impugned
judgment and order has clearly given a finding that after the judgment of this
Court dated 14.01.2010, the rate of wages payable to the labourers under the
said contract would be according to the rate specified in that judgment and not
on 471% ASOR basis, still the High Court has dismissed the appeal and has
directed the CMD to calculate the amount of wages.

4.2 It is further submitted by Shri N.K. Kaul, learned Senior Advocate appearing on behalf of the FCI that it is required to be noted that the
contract specifically provided that the rate quoted by the contractor and
agreed to between the parties of 471% was above the schedule of rates provided
in Appendix VIII of the contract. It is submitted that Appendix VIII clearly
shows that such a schedule of rate was only provided regarding Item Nos. 1 to 23 and 25 of the Appendix. It is submitted against Item No. 24, which was with respect to supply of casual labourers, it was specifically
provided that “Relevant rate of wages is to be paid and such rate shall abide
by the decision of pending SLP as filed by the FCI in the Honble Supreme
Court”. It is submitted that there was no schedule of rate for Item No. 24
which was for supply of casual labour and therefore the claim of 471% above
schedule of rates (ASOR) has no application to the quotation pertaining to supply
of casual labour.

4.3 It is further submitted by Shri N.K. Kaul, learned Senior Advocate
appearing on behalf of the FCI that the High Court has failed to consider the
fact that after the order passed by the Supreme Court dated 14.01.2010, a
contempt petition was filed which came to be dismissed by this Court on
4.7.2011 as the order passed by this Court was complied with. It is submitted that
therefore the High Court has materially erred in passing the impugned judgment
and order, more particularly directing the CMD to recalculate the wages.

4.4 It is further submitted by Shri N.K. Kaul, learned Senior Advocate
appearing on behalf of the FCI that the High Court has materially erred in
directing the Chairman to determine the profit to be earned by the contractor out
of his contract. It is submitted that while passing such a direction, the High
Court has not properly appreciated and considered the order passed by this Court
dated 14.01.2010. It is submitted that in the order dated 14.01.2010 passed by
this Court, this Court never kept an issue left open, more particularly with
respect to profit received by the contractor. It is submitted that therefore
the High Court has clearly erred in directing the CMD to determine the profit
to be earned by the contractor.

4.5 It is further submitted by Shri N.K. Kaul, learned Senior Advocate
appearing on behalf of the FCI that, in fact, the contractor paid the wages @
Rs.106.38/per day and if his enhanced claim of 471% ASOR on the wages paid to
the casual labour is accepted, in that case, there would be unjust enrichment
to the contractor. It is submitted that the additional claim of the contractor
for Item No. 24 is Rs. 5,34,41,520/. It is almost three times the amount due to
him under the contract. It is submitted that in any case this Court having
decided the rate of wages to be paid to the casual labour and in view of the direction
to pay the same directly to the labour without any intermediary, there was no
question of payment of any further amount as per the additional claim made by
the contractor of 471% ASOR on the wages paid to the casual labour.

5. Ms. Meenakshi Arora, learned Senior Advocate appearing on behalf
of the contractor has vehemently submitted that as such the Division Bench of
the High Court has materially erred in referring the matter back to the
Chairman of the FCI to decide certain issues and even consider to determine the
profit receivable by the contractor. It is submitted that referring the matter
back to the Chairman of the FCI would be nothing but a futile exercise of power
by the Chairman, who has already rejected the claim of the contractor by its
order dated 15.03.2012.

5.1 It is further submitted by Ms. Meenakshi Arora, learned Senior
Advocate appearing on behalf of the contractor that even otherwise the Division
Bench of the High Court has materially erred in interfering with the decision
of the learned Single Judge in which the learned Single Judge rightly held that
Clause 24 of the agreement of wages of the casual labourers is covered by 471%
of ASOR, which the FCI was obliged to pay to the contractor as per the terms of
the agreement.

5.2 It is further submitted by Ms. Meenakshi Arora, learned Senior
Advocate appearing on behalf of the contractor that, as such, both the parties
were bound by the terms and conditions of the agreement and therefore when the
contractor submitted the tender with 471% ASOR and the same was accepted, the contractor
shall be entitled to 471% ASOR on every item including the supply of the casual
labourers.

5.3 It is further submitted by Ms. Meenakshi Arora, learned Senior
Advocate appearing on behalf of the contractor that, as such, the contractor
had to pay provident fund etc. over and above the wages to be paid and
therefore the same was required to be compensated by the FCI. It is submitted
therefore that the FCI authorities are obliged to pay ASOR at the tune of 471%
for supply of casual labourers, as categorically laid down in the agreement.

5.4 It is further submitted by Ms. Meenakshi Arora, learned Senior
Advocate appearing on behalf of the contractor that even according to FCI the
contractor shall be entitled to 471% ASOR with respect to Item Nos. 1 to 23 and
25. It is submitted that therefore there is no question of not paying 471% ASOR
with respect to supply of casual labourers. It is submitted therefore that the
demand of the contractor making the claim of 471% ASOR with respect of supply
of casual labourers is absolutely just and proper and as per the agreement
between the parties, which the learned Single Judge rightly appreciated. It is submitted therefore
that the Division Bench of the High Court has materially erred in interfering
with the judgment and order passed by the learned Single Judge which was
absolutely in consonance with the terms and conditions of the agreement.

6. We have heard the learned counsel for the respective parties at length. At the outset, it is required to be noted that the controversy centres
around the interpretation of Clause 24 of the agreement and the dispute is
whether the contractor is entitled to 471% ASOR in respect of all items
including item No. 24 for supply of casual labourers? It is required to be
noted that the original contract period was from 18.01.2000 to 17.01.2002 and
it was extended till 13.07.2004. It is also required to be noted that at the
time when the contract between the FCI and the contractor was entered into, there was already a dispute pending with respect
to the rate of wages to be paid to the casual labourers. Therefore, so far as
Item No.24 for supply of casual labourers is concerned, it was provided that
“relevant rate of wages is to be paid and such rate shall abide by the decision
of pending SLP as filed by the FCI in the Honble Supreme Court”. It is also
required to be noted that in Appendix VIII with respect to other items, namely
item nos. 1 to 23 and 25, specific rates were mentioned, however, with respect
to Item No. 24 supply of casual labourers, it was blank and with respect to
Item No. 24, it was specifically provided that the wages to be paid to the
casual labourers shall abide by the decision of the pending SLP.The contractor
paid the wages to the casual labourers at the rate of Rs.106.38 per day.

The first SLP came to be dismissed by this Court on March 29, 2004. However, still the dispute continued. ontempt proceedings were initiated which ultimately reached this Court
by way of Civil Appeal Nos. 94729473 of 2003. Civil Appeal Nos. 94729473 of
2003 came to be finally disposed of by this Court on 14.01.2010 and it was
directed that the FCI shall fix the pay of the casual labourers as also of the
deceased workers, who were petitioners in the first or second case filed in the
High Court, in ScaleII, as revised from time to time (as on 1.1.1997, the scale
was Rs.43207330). This Court also directed that all the payments shall be made
to the workers and legal representatives of the deceased workers directly
without involving any contractor and other agency. Therefore, the dispute with
respect to wages came to be finally settled/disposed of by this Court by its
order dated 14.01.2010 passed in Civil Appeal Nos. 94729473 of 2003.

Therefore, the casual labourers were entitled to the wages as
per the final order passed by this Court dated 14.01.2010 in Civil Appeal Nos.
94729473 of 2003, and as per the terms and conditions of the contract, more
particularly with respect to Item No. 24 the wages were required to be paid as
per the determination in the pending SLP, i.e., Civil Appeal Nos. 94729473 of
2003.

6.1 At this stage, it is also required to be noted that even subsequently
the workers filed contempt petition before this Court which came to be
dismissed as this Court was of the opinion that order dated 14.01.2010 passed
in Civil Appeal Nos. 94729473 of 2003 has been complied with. That thereafter
the contractor made the claim claiming 471% ASOR with respect to supply of
casual labourers at 471% ASOR as per the claim the contractor claimed between
Rs.607.43 to Rs.1225.19 per day. The FCI determined and paid the wages as per
the direction issued by this Court in the order dated 14.01.2010 ranging between
Rs. 308.85 to 391.35 per day. The statement with respect to claim made by the
contractor and the amount paid to the casual labourers as determined and paid
by the FCI is as under:

Period

Bill raised by
Pratap Kundu,
HTCpaid by
FCI (per
day/Casual
Labourer

Now being
Claimed by
Contractor
Pratap Kundu
@ 471% on
wages raised

Amount paid
to Casual
Labourers for
the contract
period of
Pratap Kundu
(18.01.2000 to
13.07.2004)
after order
dated
14.01.2010 of
Honble
Supreme
Court in SLP
No. 94729473
of 2003 filed
by FCI v. Bijoy
Kumar Singh Ors.

Jan-Mar,00

Rs.106.38

Rs. 607.43

Rs.308.85

Apr-May,00

Rs.106.38

Rs. 607.43

Rs.306.31

June, 2000

Rs.106.38

Rs.607.43

Rs.317.42

July-Sept, 00

Rs.106.38

Rs.607.43

Rs.321.46

Oct-Dec., 00

Rs.106.38

Rs.607.43

Rs.325.31

Jan-Mar, 01

Rs.106.38

Rs.607.43

Rs.333.88

Apr-Jun, 01

Rs.106.38

Rs.607.43

Rs.331.92

Jun-Sept 01

Rs.106.38

Rs.607.43

Rs.334.08

Oct-Dec, 01

Rs.106.38

Rs.607.43

Rs.343.00

Jan-Mar, 02

Rs.106.38

Rs.607.43

Rs.353.19

Apr-Jun, 02

Rs.106.38

Rs.607.43

Rs.352.54

July-Sept., 02

Rs.106.38

Rs. 607.43

Rs.353.85

Oct-Dec., 02

Rs.106.38

Rs.607.43

Rs.360.73

Jan-Mar, 03

Rs.106.38

Rs.607.43

Rs.372.23

Apr-Jun, 03

Rs.206.73

Rs.1180.42

Rs.369.96

JulS-ept, 03

Rs.209.96

Rs.1198.87

Rs.374.96

Oct-Dec, 03

Rs.213.23

Rs.1217.54

Rs.379.96

Jan-Mar, 04

Rs.214.58

Rs.1225.25

Rs.389.23

Apr-Jun, 04

Rs.214.57

Rs.1225.19

Rs.390.19

July, 04

Rs.214.57

Rs.1225.19

Rs.391.35

The aforesaid claim has been rejected by the Chairman of the FCI
and according to us the same was rightly rejected by the Chairman as the wages
to the casual labourers were required to be determined and paid as per the
order passed by this Court dated 14.01.2010 in Civil Appeal Nos. 94729473/ 2003.
Therefore, as such, the Division Bench of the High Court has rightly observed
and held that after this Courts judgment and order dated 14.01.2010, the rate
of wages payable to the labourers under the subject contract would be according
to the rate specified in that judgment and not on 471% ASOR basis. We are in
complete agreement with the said finding recorded by the Division Bench. Therefore, it is observed and held that the contractor
shall not be entitled to the wages to be paid to the casual labourers on 471%
ASOR basis and the wages to be paid to the labourers would be at the rate
specified in the order dated 14.01.2010 in Civil Appeal Nos. 94729473/ 2003.

However, the Division Bench of the High Court was of the
opinion that there is no clarity how judgment and order dated 14.01.2010 has
been applied by the FCI to calculate the wages of the casual labourers, therefore,
the Division Bench of the High Court has referred the matter back to the
Chairman of the FCI to consider how the differential rate of casual labourers
between Rs. 308.85/per Day and Rs.353.19/per day between January and March,
2000 and October to December, 2001 respectively and the differential rate for
the subsequent period up to July, 2004 has been determined and the Chairman is
directed to determine the exact amount of wages that was payable, applying the
judgment and order passed by this Court dated 14.01.2010 in Civil Appeal Nos.
94729473/ 2003.

6.2 So far as the direction issued by the Division Bench of the High Court directing the Chairman to determine the profit earned by the contractor
out of his contract is concerned, the same is not sustainable at all. The
Division Bench of the High Court has observed that the judgment and order of
this Court dated 14.01.2010 has left open other issues to be determined. We do not
find anything in the order dated 14.01.2010. On bare reading of the order dated
14.01.2010 there does not appear to be left open other issues to be determined,
as observed by the High Court in the impugned judgment and order. Under the circumstances,
that part of the direction issued by the Division Bench directing the Chairman
to determine the profit earned by the contractor deserves to be quashed and set
aside.

7. In view of the above and for the reasons stated above, the appeal filed by the FCI being Civil Appeal arising from SLP (C) No. 21970 of 2019 is
hereby partly allowed. It is observed and held that the casual labourers shall
be entitled to the wages according to the rates specified in the order dated
14.01.2010 passed by this Court in Civil Appeal Nos. 94729473/ 2003 and the contractor
shall not be entitled to 471% ASOR basis with respect to supply of casual
labourers as claimed by him. Therefore, it is specifically observed and held that
the FCI shall be liable to pay the wages payable to the casual labourers under the subject contract
according to the rates specified in the judgment and order dated 14.01.2010
passed by this Court in Civil Appeal Nos. 94729473/ 2003 and not on 471% ASOR
basis.

It goes without saying that the contractor shall be entitled to
reimburse the wages paid by him, i.e., Rs.106.38 per labourer, if the same is
not reimbursed/paid to the contractor. Therefore, remand to the Chairman of the
FCI shall be restricted to the determination of the wages as per the judgment
and order dated 14.01.20120 passed by this Court in Civil Appeal Nos. 94729473/
2003, more particularly as contained in paragraph ab of the operative portion of the impugned order. However, that part of the direction issued by the Division Bench in the operative portion of the order by which the
Chairman is directed to determine the profit earned by the contractor, the same
is hereby quashed and set aside. The appeal preferred by the FCI is partly allowed
in terms of the above. Consequently, the appeal preferred by the contractor
being Civil Appeal arising out of Diary No. 35242/2019 stands dismissed. There
shall be no order as to costs.

……………………….J. [ASHOK BHUSHAN]

……………………….J. [M.R. SHAH]

NEW DELHI;

NOVEMBER 29, 2019.

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