FOOD CORPORATION OF INDIA vs. PRATAP KUNDU

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.9127 OF 2019 (Arising from SLP(C) No.21970 of 2019) Food Corporation of India …Appellant Versus Pratap Kundu …Respondent WITH CIVIL APPEAL NO.9128 OF 2019 (Arising from SLP(C) No.28248 of 2019)                         @ Diary No.35242/2019 Pratap Kundu …Appellant Versus Food Corporation of India …Respondent J U D G M E N T M.R. SHAH, J. Signature Not Verified Digitally signed by ARJUN BISHT Date: 2020.01.28 14:40:46 IST Reason: Delay condoned.  Leave granted. 1 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 High Court 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 2 471% 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 Hon’ble 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 3 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   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 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 4 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 5 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 th of how the Supreme Court judgment and order dated 14 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 6 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 th 14   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 7 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 8 the FCI in the Hon’ble 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 9 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 10 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 11 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 12 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 Hon’ble 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, 13 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.     Contempt 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 14 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. 9472­ 9473 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: 15

16 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 Court’s 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 17 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.   9472­ 9473/2003.  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. 18 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   14.01.2010 passed by this Court in Civil Appeal Nos. 9472­9473/2003, more particularly as contained in paragraph a & b of the operative portion   of   the   impugned   order.     However,   that   part   of   the 19 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] NEW DELHI; …………………………………J. NOVEMBER 29, 2019. [M.R. SHAH] 20