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The casual labourers shall be entitled to the wages according to the rates specified in the order &#

Food Corporation of India v. Pratap Kundu, Civil Appeal No. 9128/2019, SLP(C) No. 35242/2019-29th November, 2019

CORAM: Two judge bench comprising of Justice Ashok Bhushan and Justice M. R. Shah

The facts of this case are that the judgement & order dated 23.06.1998, in the Calcutta High Court in W.P. No. 1491/1997, was filed by the contract casual labourers who were being supplied by an earlier contractor for the Bikna Depot who directed that the contract casual labourers would be entitled to the payment of wages that is equivalent to that of Class IV Employees. The appeal which was filed by the FCI – Food Corporation of India came to be dismissed by the Division Bench of the High Court on 16.7.1998. The judgement & the order which was passed by the Division Bench of the High Court on 16.7.1998 were being challenged by the Food Corporation of India before this Court by way of Civil Appeal Nos. 6064-6065 of 1998. That on 16.12.1999 after the earlier contract period came to an end, the appellant – Food Corporation of India floated tender for appointment of Handling & Transporting Contractor for the Bikna Depot.

The respondent cum contractor had submitted his tender in which he had quoted 471% above the schedule of the rates which were being fixed in the tender.  The tenderer is required to quote rates as per Appendix VIII of the contract. The Civil Appeal arising for Item No. 24 which was for supply of casual labour was therefore stated in the tender that “relevant rate of wages” is to be paid & such rate shall abide by the decision of the pending Special Leave Petition which was filed by the Food Corporation of India in the Hon’ble Supreme Court. By the judgement & the order dated 28.09.2000, the Court dismissed the civil appeal nos. of  6064-6065 of 1998 upholding the judgement & the order which was passed by the Division Bench of the High Court on 16.7.1998. The tender of the Respondent was accepted & he was appointed as the Handling & Transport Contractor for a period of two years at the negotiated rate of 471% which was above the schedule rates (ASOR), meaning the contract is until 16.1.2002. After the original contract was over, the respondent submitted a bill dated 19.7.2002, claiming that the above the schedule rates of 471% on the amount paid to the contract casual labourers. In the meantime, a contempt petition was being filed before the High Court alleging that the non compliance of the earlier judgement & order passed by the judge confirmed up to this Court. The High Court judgement & order dated 4.4.2003 convicted the officers of the Food Corporation of India for contempt of court and sentenced them to undergo three months of imprisonment plus charging fine for the violation of the orders for non payment 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 No. 9472-9473 of 2003. This Court stayed the further proceedings before the High Court. The demand of the contractor claiming above the schedule rates of 471% on the amount paid to the contract casual labourers was rejected by the Food Corporation of India. The contractor then filed W.P. No. 7790/2004 seeking additional amount of payment for the contract casual labourers. By the judgement & order dated 14.1.2010, the Court dismissed the Civil Appeal No. 9472-9473 of 2003 & directed the Food Corporation of India to make payment of wages to the workmen of Scale – II as revised, from time to time and also directed that the arrears & the wages should be directly paid to the workmen & legal representatives of the workmen without using any contractor or other agency. It was also directed that once the payments were made, the sentence award would be set aside.

Thereafter contempt petition nos. 56-57 of 2011 were filed by the contract casual labourers alleging non compliance of order dated 14.1.2010 passed in the Civil Appeal No. 9472-9473 of 2003 passed by this Court. The same came to be dismissed by this Court by order dated 4.7.2011 The W.P. No. 7790/2004 filed by the contractor, the High Court on 8.12.11, directed the Food Corporation of India to pass a reasoned & speaking order on the grievance raised by the contractor. The Food Corporation of India passed a detailed speaking order dated 15.3.2012 holding that the contractor is not entitled to the claim raised by him regarding 471% of above the schedule rates actually paid to the casual labourers because the claim was contrary to the claim between the parties. The contractor amended the aforesaid petition. In the aforesaid petition W.P. No. 7790/2004 the contractor in the writ of Mandamus prayed for above the schedule rates to be 471%. The learned Judge of the High Court on 12.4.2016, allowed the aforesaid petition W.P. No. 7790/2004 & quashed & set aside the speaking order which was passed on 15.3.2012 passed by the CMD, FCI & directed the CMD to verify the bill & make unpaid payment of unpaid dues with liberty to deduct the payment already made. Feeling dissatisfied with the order passed in HC, the FCI appealed before the division bench of the High Court being MAT No. 1151/2016/ F.M.A 1168/2017. They disposed the appeal stating

  1. The differential daily rate of wage of labourers to be Rupees 308.85 per day between Jan & Mar 2000 & Rs. 353.19 per day between Oct to Dec 2001 respectively & the differential rate for the subsequent period f July 2004

  2. The Chairman shall determine the exact amount of wages payable, applying the SC Judgement. According to the SC Judgement, such outstanding wages is to be directly paid to the labourers/ their heirs.

Dissatisfied with the impugned judgement & order passed by the HC, both FCI & Contractor have preferred the present appeals.

The issues raised in this case are

How much the amount is representing the profit received by the respondent?

Whether the contractor is entitled to 471% ASOR for all items including item 24 for supply of casual labourers

The Appellant contended that the Division Bench of the HC has erred by referring the matter back to the chairman of the FCI to resolve the issues and to even determine the profit receivable by the contractor. They also contend that it would be a futile exercise of power by the Chairman. They also contend that both the parties are bounded by the terms & conditions of the agreement & so when the contractor submitted 471% ASOR & the same is accepted then the contractor shall be entitled to 471% ASOR. Also the contractor has to pay the provident fund over and above the wages to be paid & therefore the same is to be compensated by the FCI. Also, the contractor shall be entitled to 471% ASOR with respect to Item Nos. 1-23 & 25.

The Respondent contended that the HC in its impugned order & judgement has clearly said that the payment of the rate of wages would be as per the rate specified in that judgement & not on 471% ASOR basis. They also contended that Appendix VIII of the contract clearly shows the rate of payment of wages to be made to the labourers and that should be abided.  Also there is no schedule of rate of payment of wages for Item No. 24 which was for supply of casual labour & so payment of 471% ASOR is clearly not applicable. It was also contended that HC has erred by directing CMD to re calculate the wages. It was contended too that the contractor paid Rs. 106.38 per day& if his claim of 471% ASOR is to be accepted, it would be unjust enrichment to the contractor. It is submitted the additional claim for the contractor is Rs. 5, 34, 41,250, which is almost three times the amount due to him under the contract.

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.

The SC observed that the order dated 14.1.2010 does not appear to be left other open issues as determined

The Court held the part of the direction of the Division Bench of the HC directing the Chairman to determine the profit earned by the contractor to be quashed & set aside.

The casual labourers shall be entitled to the rate of wages specified in the order dated 14.1.2010 & FCI shall be liable to pay the wages of the casual labourers & not on 471% ASOR basis.  The contractor shall be entitled to reimbursement of payment of wages made by him.

The Civil Appeal No. 35242/2019 stands dismissed. There shall be no order as to costs.

Nardhana Ram

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