Gujarat High Court
Gujarat State Electricity Corporation ... vs Makol Of Femw Works And Registered ... on 9 August, 2023
Author: Ashutosh Shastri
Bench: Ashutosh Shastri
NEUTRAL CITATION
C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 630 of 2002
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI : Sd/-
and
HONOURABLE MR. JUSTICE DIVYESH A. JOSHI : Sd/-
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1 Whether Reporters of Local Papers may YES
be allowed to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the
fair copy of the judgment ? NO
4 Whether this case involves a
substantial question of law as to the
interpretation of the Constitution of NO
India or any order made thereunder ?
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GUJARAT STATE ELECTRICITY CORPORATION LIMITED. & 1
other(s)
Versus
MAKOL OF FEMW WORKS AND REGISTERED PARTNERSHIP FIRM
AS CONSTITUTED AND ITS PARTNER & 4 other(s)
=====================================================
Appearance:
MR VIRAL J DAVE for the Appellant(s) No. 1,2
MR ASPI M KAPADIA for the Defendant(s) No. 2,3,4,5
MRS KETTY A MEHTA for the Defendant(s) No. 1
MS DELSHAD A KAPADIA for the Defendant(s) No. 2,3,4,5
=====================================================
CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
and
HONOURABLE MR. JUSTICE DIVYESH A. JOSHI
Page 1 of 56
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NEUTRAL CITATION
C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023
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Date : 09/08/2023
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE DIVYESH A. JOSHI)
1. The appellant Gujarat electricity Corporation Limited is the original defendant and the respondent, Makol FEMW Works, a registered partnership firm is the original plaintiff in the main proceedings and for the sake of brevity and convenience they shall hereinafter be referred to as original defendants and plaintiffs.
2. The plaintiff firm has filed suit before the Court of learned Civil Judge, Senior Division, Surat, Camp at Bardoli, being Special Civil Suit No.17 of 1996 for recovery of Rs.67,97,426.29 ps. with running interest at the rate of 10% from the date of filing till its realisation with cost against the defendants. The said suit was allowed by the learned Joint Senior Civil Judge, Surat, Camp at Bardoli by judgement and degree dated 29.03.2001. Being aggrieved by and dissatisfied with the said judgement and order, present First Appeal is filed by the defendants by raising manifold grounds.
3. The facts leading to filing of present appeal can be summarised as under:-
3.1 The plaintiff is a registered firm having its office at Surat and doing business of contractor of power plant maintenance, Page 2 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined breakdown maintenance and job work. In the year 1984 tender was floated by the defendants for the purpose of Coal Mill maintenance and Coal Plant maintenance at their thermal power station at Ukai Dam, Surat, and the tender was awarded to the plaintiff firm. From 1984 to 1993, the plaintiff had worked on the side power plant of the defendants. As per the terms and conditions of the contract, the plantiff has accepted the liability of the work of Coal Mill and Coal Plant Maintenance. The work assigned to the plaintiff has been completed and carried out by engaging skilled workers and labourers. The plaintiff firm has also obtained licence under the Labour Laws, as per the terms and conditions of the tender since 28.2.1984. It is agreed upon by both the parties that daily wage payable to the labourers of each class like civil and technical under the Minimum Wages Act, 1948 shall be paid as per the Notifications issued by the Government of Gujarat from time to time and the plaintiff has also agreed upon to pay the increase in the daily wages payable under the prevailing Laws, Rules and Notifications. In the operative part of the agreement of the Page 3 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined contract, it is specifically stated that the minimum wage rates are subject to labour escalation as explained in schedule B and all the conditions of the contract enumerated in the booklet, tender and contract for the work shall apply for caring out the work. It is also agreed by both the parties that the Labour Laws in existence and as modified from time to time shall be binding to the contractor. At the time of execution of the contract the plaintiff has paid daily wages to the labourer at the existing rates and such daily wages were revised and increased from 1.4.1985 to 30.9.1986 for civil skilled workers to be Rs.16.05 ps. and for technically skilled rate was Rs.22/- and the revised increased daily wages rate from the period from 1.10.1993 to 31.9.1994 was Rs.34/- for civil unskilled workers and Rs.43 for technically skilled persons. The plaintiffs have already prepared and submitted running cost bill which was allowed and approved by the defendants, but on the basis of aforesaid difference of amount, the plaintiff is entitled to Rs.67,97,426.29 ps. which was partly accepted by the defendants by issuing cheque of Rs.79,052-50 ps on 7.3.1994 and Page 4 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined Rs.1,18,962.74 ps. Dated 29.9.1994 by way of cheque and rest of the outstanding difference of amount has not been paid by the defendant despite the fact that time and again notices were issued to them.
Therefore, the plaintiffs were constrained to file the suit to recover the aforesaid amount from the defendants. The plaintiffs have repeatedly intimated to the defendant to pay the amount of difference but they did not care.
3.2 In the suit, notice was received by the Honorable Court, which was duly served to the defendants, who appeared through their advocate and filed written statement. After considering all the pleadings on record, learned Civil Judge, Senior Division, has framed following issues.
(1) Whether the plaintiff proves that the plaintiff firm is a registered partnership firm?
(2) Whether the plaintiff proves that the plaintiff firm has filed the tenders for in defendant Corporation from 1984 to 1993?
(3) Whether the plaintiff proved that the plaintiff firm has completed the work till 1994 as per tender?Page 5 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023
NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined (4) Whether the plaintiff proved that as per condition of tender the plaintiff has accepted the liability to run and maintain Cola Plant?
(5) Whether the plaintiff proved that the plaintiff firm has appointed skilled labourers and employee to run and maintain Coal Mill and Cola Plant? (6) Whether the plaintiff proves that the plaintiff firm has obtained license as per provision of Labour Laws to run and maintain Coal Mill and Cola Plant?
(7) Whether plaintiff proves that the
plaintiff firm pays the salary to
workers who comes in the definition of technical workman but the defendants pays additional amount by stating that they are civil unskilled workers? (8) Whether the plaintiff proves that from date 01.04.1985 to 31.03.1998 the rate of civil labourers is Rs.16-05 ps and rate for technical skilled workers is Rs.22/-?
(9) Whether the plaintiff proves that from date 01.10.1992 to 31.03.1994 period, date of skilled workers was Rs.34/and as per technical rate Rs.43/-?
(10) Whether the plaintiff proves that the plaintiff firm is entitled to get the Page 6 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined difference of Rs.67,97,426-29 ps. from defendants?
(11) Whether the plaintiff proves that the defendants has accepted partly demand of the plaintiff and the defendants paid Rs.79,052-50 ps. on dated 07.03.1994 and Rs.1,18,962-74 ps. on dated 29.09.1994 to plaintiff?
(12) Whether the plaintiff proves that the plaintiff firm is entitled to get Rs.1,38,86,159-24 ps. from the defendants with interest at rate of 18% PA.
(13) Whether the plaintiff is entitled to get any amount from the defendants? If yes, what amount the plaintiff is entitled to get from the defendants and at what rate of interest?
(13-A) Whether the defendants prove that
the plaintiff has breached the
condition of Arbitration and the suit is barred by Provision of Arbitration Act?
(13-B) Whether the suit is barred by Limitation?
(13-C) whether this Court has jurisdiction to try the suit?
(14) What order and decree? Page 7 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined 3.3 The parties have led evidence and after submission of closing purshis, the arguments were canvased by learned advocates for both the parties. After considering and appreciating all the
documents available on record as well as applying the principles of law, learned Judge has thought it fit to allow the suit and directed the defendants to pay an amount of Rs.67,97,426-29 ps. with running interest at the rate of 10% per annum from the date of filing of the suit till realisation.
3.4 Being aggrieved by and dissatisfied with the said judgement and order, present First Appeal is filed by the appellants by raising manifold grounds.
4. Learned advocate, Mr.Viral Dave, who appears on behalf of the appellant has submitted that the impugned judgment and award passed by the learned Judge is contrary to law and facts and evidence on record. He has submitted that the learned Judge has failed to appreciate the oral and documentary evidence available on record in its true spirit and proper perspective and, by doing so, learned Judge has committed grave error and the same is required to be corrected by this Honourable Court. Learned advocate, Mr.Viral Dave has submitted that the learned Page 8 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined judge has erred in framing the issues in the matter and failed to place burden of proof on the proper party. Learned advocate, Mr.Viral Dave has submitted that the plaintiff is a registered partnership firm and was running the business of power maintenance, breakdown maintenance and job work. The defendant had issued a tender for the purpose of maintenance of coal mill and coal plant at their thermal power station at Ukai Dam. The plaintiff had submitted a tender for the period between 1984 to 1993 and eventually for all these years tender of the plaintiff was allowed and accepted by the defendants. As per the terms and conditions of the tender the plaintiff had to engage trained and experienced workers for the maintenance work. The plaintiff has completed the maintenance work for the period between 1984 to 31.3.1994 as per the terms and conditions of the contract. The plaintiff has to obtain licence under the Labour Laws as also has to scrupulously follow the terms and conditions mentioned and in the license.
5. Special Civil Suit No.17 of 1996 for claiming Rs.1,38,86,159.20 paise with interest at 18% per annum towards the difference bill of wage rate between the civil unskilled labourers and technically skilled labourers was filed by the plaintiff on 8th March 1996. It is pleaded in the Page 9 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined plaint that for the purpose of maintenance of coal mill and coal plant, skilled labourers were required and the plaintiff has successfully completed all the work assigned to him about the maintenance of the plant by engaging skilled labourers. As per the terms and conditions of the contract, the plaintiff had to pay daily wages as per the Government Rules, Regulations and Notifications issued from time to time. For the period between 1.4.1985 to 31.3.1986, as per the Government Notification, daily wage of civil unskilled labourer was Rs.16.05, whereas for technically skilled labourer the rate was Rs.22 and the revised increased daily wages rate from the period from 1.10.1993 to 31.9.1994 was Rs.34/- for civil unskilled workers and Rs.43 for technically skilled persons. It is pleaded by the plaintiff that the plaintiff has to pay daily wages to the labourers as per the definition of "technical workmen" because technically skilled persons are required to complete the said work of maintenance. The job profile of the workers is very serious in nature and they have to work in a thermal power station.
6. The defendant appeared in the suit proceedings and denied the claim of the plaintiff, particularly, difference of wage pleaded by the plaintiff for skilled labourers. It is stated Page 10 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined that in the written statement, the plaintiff had accepted the liability to pay the labour wages as per the terms and conditions of the tender as well as rules and regulations and notification issued by the Government from time to time. It is the specific defense raised by the defendant that as per the terms and conditions of the contract, the defendant has to pay wages to the labourers as per the formula given in the tender. The defendants had already paid the amount mentioned in the tender contract to the plaintiff and as per the running bills prepared by the plaintiff and the said amounts given to the plaintiff and the plaintiff accepted the said amoumt without any protest or objection. The defendants have specifically denied any recovery or part payment, as stated by the plaintiff in the plaint.
7. Learned advocate, Mr.Viral Dave has submitted that at the time of deciding the suit, learned Judge has given findings & assigned reasons, more particularly on issue nos.5 and 7, wherein learned Judge has opined that the findings on these issues are in affirmative, however, the said view adopted by the learned Judge is erroneous on the following reasons.
8. Learned advocate, Mr.Viral Dave has submitted that as per the terms and conditions of the contract, the said work is expected to be Page 11 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined carried out by the trained and experienced workers but not the skilled workers of industrial engineering. Whereas after considering & appreciating the evidence available on record and as per the terms and conditions of the tender, learned Judge came to the conclusion that work is expected to be done by the trained and experienced workers. In view of the terms and conditions of license, Exh.32, page 27-28 of the paper book, the plaintiff had accepted the liability to pay the wages to the labourers as per the Rules and Regulations and Notifications issued by the Government from time to time and the plaintiff was also liable to follow the principles of Labour Laws and has to pay wages to the labourers in accordance with law. At the time of bidding the tender, the plaintiff was well aware and had a knowledge that what kind of daily wages are required to be paid to the labourers and after calculating existing position of the Notifications of the Government, the tender might have been filled up, therefore, the plaintiff has not got any right to claim recovery of any additional amount on the ground of difference of wage rate from civil unskilled to technically skilled labourers.
9. Learned advocate, Mr.Viral Dave has further submitted that the learned Tribunal has Page 12 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined committed an error by considering that the defendants are liable to pay the difference of wages of technical skilled workers to the plaintiff. Learned Judge has not considered and appreciated the evidence available on record, more particularly, the deposition of Deputy Labour Commissioner examined by the defendant and the said witness has very categorically deposed that as per the terms and conditions of the licence and as per the prevailing laws in force, the contractor is solely responsible to pay the wages to the labourers as per the Labour Laws and Minimum Wages Act, and there was specific condition imposed in the licence, which is produced at exhibit 32. Condition No.5 of the said licence itself crystallizes the position. Learned advocate, Mr.Viral Dave has further submitted that as per the terms and conditions of the contract, the labour escalation charges are required to be paid by the defendant as per the formula mentioned in the contact. The defendants are duty bound to pay the amount agreed upon between the parties as per the contact and, accordingly, the defendant has already paid the amount to the plaintiff as per running bill prepared and sent to the office of the defendants.
10. The Deputy Labour Commissioner has also deposed that they have carried out inspection of the Page 13 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined office of the plaintiff and found that they have paid the rates of wages to their employees as per the rates of the skilled workers. Learned advocate, Mr.Viral Dave has submitted that entire controversy in this appeal hinges upon two issues, firstly there was express provision in the contract that "the price/ rates are firm but subject to labour escalation as explained in Schedule-B." Learned advocate, Mr.Viral Dave has relied upon the contract and submitted that he would like to put emphasis on the contents of paragraph 35, which are as under:
"35. The prevailing unskilled labour wages rate is about Rs.27.40 per day. Contractor has to make paymen to escalation above 27.40 will be paid to him as per teh formula given below:-
A K/100 x BA X (RR-PR)/PR
Kindly read:-
A=Amount of labour escalation payable. K=%age of labour escalation = 80% RR= Revised minimum labour wages to the unskilled contract labour.
PR = Prevailing minimum labour wages of unskilled contract labour on the date of opening of tender i.e. Rs.27.40."
11. It is clearly mentioned in the contract, in no uncertain terms, that labour escalation prices would be applicable to unskilled workers.
Page 14 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined Admittedly, from the date of execution of the contract and at the time of referring the suit, it is specific stand of the plaintiff that they are utilising the services of skilled technical workers to execute the work assigned to them, however, as per the terms and conditions of the contact, particularly, as per "Schedule-B"
mentioned in the contract, plaintiffs are entitled to the difference of daily wages of the unskilled labourers and not the skilled labourers. At the time of considering and appreciating the evidence available on record, almost in all the findings, the learned Judge has opined in a very precise manner that the plaintiffs were utilizing the services of skilled labourers, even then the suit is allowed and impugned judgment is passed in favour of the plaintiff. Apparently on the face of the record, this is a clear-cut breach of the terms of the contract and said opinion of the learned Judge is contrary to law and evidence available on record, hence, required to be quashed and set a side.
12. Considering the subject matter, no liability can be fastened on the head of the defendant for the purpose of payment of difference of wages. Learned advocate, Mr.Viral Dave has further submitted that it is the case of the plaintiff that the suit is filed for the purpose of Page 15 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined recovery of the amount of Rs.67,97,426-29 ps. towards difference of wage rates between civil unkkilled labourers and technically skilled labourers and out of the said amount, partly amount was paid by the defendants by way of executing a cheque of Rs.79,052.50 on 7 th March 1994 and Rs.1,18,962.74 paisa on 29.9.1994 and the learned Judge has given finding to the effect that out of the outstanding dues, part payment was already made by the defendants but in fact said finding is not correct. He has placed reliance upon the deposition of the witness examined on behalf of the plaintiff- firm, viz. Keshavbhai Vanmaildas Patel, Exh.24. Said witness has candidly accepted in very categorical terms that the cheque of Rs.1,18,962.70 paise was issued towards running bill No.24 on 29.9.1994 and Rs.1,34,640/- for the period between 15.2.1994 to 15.3.1994, cheque of Rs.79,052.50 issued on 9.3.1994, towards running bill No.21 for Rs.1,07,250 for the period between 21.1.1994 to 28.2.1994. In the very categorical terms, said witness has fairly conceded during his cross examination that no amount was given by the defendants towards suit claim and, therefore, on the strength of the evidence available on record, learned Judge ought not to have given finding in favour of the plaintiff and learned Judge has Page 16 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined committed grave error. It is submitted by learned advocate, Mr.Viral Dave, that it is an admitted position of fact that since the year 1983 to 31.03.1994, tender contract was given to the plaintiff by the defendants and present suit is filed by the plaintiff in the year 1996, i.e. on 08.03.1996. It is the specific case of the plaintiff that as per the terms and conditions of the contract, labour escalation charge is required to be recovered as per "Schedule-B"
formula from the defendants. During those years they had paid to the labourers as per the Notifications, Rules and Regulations of the Minimum Wage issued by the State of Gujarat and during the pendency of the contract and in the interregnum period as and when daily wage rate of the labourer is escalated by the Government through notifications, circulars, rules and regulations, the same is required to be recovered from the defendants, as per the terms and conditions of the contract. Clause of Labour Escalation is inserted in the contract from the year 1989, therefore, there is express bar for the period between 1983 to 1988 and the request made by the plaintiff was flatly refused by the defendant by repudiating their claim for recovery of difference of daily wage for the period between 1983 to 1994, the suit is filed. Since the suit is filed collectively for all Page 17 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined these years by consolidating difference of wage during the entire period. Hence, the suit would be barred by the provisions of law of limitation. Learned Judge has not considered the said argument of the defendant in true spirit and proper perspective for the purpose of calculation of the period for filing of the suit. As per the case of the plaintiff, cause of action has occurred in the year 1983. For the sake of argument, without admitting, even if it is accepted that from the year 1989, the Clause of "labour escalation" is inserted in the contract then also within a period of 3 years from the date of cause of action, the period of limitation would start to be commenced and limitation would begin from that day only. Therefore, the suit is required to be filed as per the statutory provisions and admittedly the present suit is filed in 1996 i.e. after the period of 3 years. Hence, only on this ground the suit is required to be dismissed. Learned advocate, Mr.Viral Dave has further submitted that labour escalation clause is inserted in the contract in the year 1989, as per the formula given in "Schedule-B" of the contract for unskilled labourers and, accordingly, the defendants have already paid the bills to the plaintiffs and, at that point of time, the plaintiff has happily accepted said cheques Page 18 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined without raising any objections about the difference of payment. When the plaintiff has accepted the running bills without any protest in that event, subsequently, the plaintiff has not got any right to raise the grievance about non payment of the difference of daily wage rates, as per the terms and conditions of the contact. Evidence to that effect is available on record and it was brought to the notice of the Court but instead of considering and appreciating this material, learned Judge has passed an order that the dispute between the party is only pertaining to difference in wage rate and, as per the labour escalation clause, defendants have to fulfill the condition of the contract. Said view adopted by the learned Judge is erroneous and against the evidence on record.
13. Learned advocate, Mr.Viral Dave has further submitted that the defendants have raised the issue about the maintainability of the suit, on the basis of the fact that the dispute involved in the suit is pertaining to wages of labourers and, as per the contact between the parties the Labour Law and Minimum Wages Act are applicable, therefore, the Industrial Tribunal has jurisdiction to try and conduct the dispute between the employer and the employees. Said objection was not considered by the learned Judge by assigning the reason that the dispute Page 19 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined between the parties is pertaining to wage rate difference and such kind of dispute can be decided by the Civil Court. Such finding of the learned Judge is not palatable and believable. Learned advocate, Mr.Viral Dave has also submitted that at the time of assigning reasons, learned Judge has given opinion that the defendant Board would fall under the definition of the industrial engineering establishment, as the Board is engaged in the activity of production of electricity. Learned advocate, Mr.Viral Dave has submitted that as per the Factories Act, 1948 the defendant Board would fall under the definition of Section-2K i.e. "manufacturing process" and, therefore, the Board cannot be considered as an industrial engineering establishment. The defendant-Board is not engaged in any activity to make production and sharing of metals by processing and, therefore, the Board would not fall within the definition of the engineering industry.
14. Learned advocate, Mr.Viral Dave has submitted that, as per the terms and conditions of the tender, the plaintiff has obtained licence from the licencing authority and, as per the terms of licence, certain liability is fastened on the head of the plaintiff, if the plaintiff had paid higher rate of wages to its workers to fulfill the terms of the licence, as per the Rules and Page 20 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined Regulations issued by the Government from time to time, this liability of the plaintiff cannot be fastened on the head of the defendants. The defendants are duty bound to pay the amount agreed upon by the parties as per the terms of contract. Admittedly, in the contract there was no condition to pay the wages as per the wage rate applicable to the skilled workers of the engineering establishment. Per contra, as per the labour escalation formula, wage rate can be calculated and given by the defendants and the defendants were only liable for payment of wages applicable to unskilled labourers.
15. The tenders were issued on the firm quotation and the plaintiff firm cannot claim any additional amount except the labour escalation for the unskilled labourers from the defendants. Learned advocate, Mr.Viral Dave has further submitted that it is clearly mentioned in the operative part of the contract that if any dispute cropped up between the parties, in that event, Labour Commissioner is the adjudicatory authority and dispute can be referred to the Labour Commissioner for adjudication.
16. Learned advocate, Mr.Viral Dave has further submitted that, in fact, at the time of filling up the tender, the plaintiff's firm has quoted 120% "labour escalation charge" but subsequently on 6.1.1990, a letter is purportedly written by Page 21 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined the plaintiff firm on the letterhead specifically stating that they are reducing the percentage of "labour escalation" from 120% to 80%. Not only that the plaintiff had also reduced price quoted in the tender from Rs.12,80,000/- to Rs.11,75,000/- and, shown his willingness to work in the reduced price if the tender would be assigned to him, on the strength of the said letter, and lowest price offered by the plaintiff, his tender was allowed & contract was given to the plaintiff, and those set of documents crystallize the position that at no point of time, the plaintiff was aggrieved with the labour escalation clause and it is the formula for unskilled labourers on the contrary plaintiff was ready and willing to work with the defendant by reducing the actual price quoted in the tender.
17. Learned advocate, Mr.Viral Dave has relied upon the following case laws and the principles enunciated in these judgements and submitted that this is a fit case wherein the appeal is required to be allowed by quashing and setting aside the order passed by learned Court below.
(i) State of Gujarat v. Z.S.Kazi reported in 1977 All India Service Law Journal, page 152. Page 22 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined
(ii) Hindustan Steel Works Construction Limited v. Commissioner of Labour reported in 1996 (10) SCC 599.
(iii) Senior Regional Manager, Food Corporation of India, Calcutta v. Tulsi Das Bauri reported in 2008 (17) SCC 657.
(iv) Pradeep Lamp Workers Union v. State of Bihar and Others reported in 1998 IILJ 492 PAT.
18. Per contra, learned advocate, Mr.Aspi Kapadia, who appears on behalf of the original plaintiff has submitted that the impugned judgment and award passed by the Court below is just, fair reasonable and it is based upon the sound principles of law, and there is no perversity in the same and it is required to be confirmed by this Court by rejecting the Appeal preferred by the original defendants.
19. Learned advocate, Mr.Aspi Kapadiya has submitted that he would like to briefly narrate the facts of the matter so that controversy involved in the suit can be easily identified. The Gujarat Electricity Board had issued a tender for operation and maintenance contracts for Coal Mills and Coal Feeder Centre of Ukai Thermal Power Project. The said tender was successfully bidded for the year 1983 to 1994 by the Makoli FEMW works, a partnership firm, which was contractor providing labourers for operation and Page 23 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined maintenance services. After awarding the contract, work had started and after completion of the work within time period, agreed amount was paid to the plaintiff by the defendant for executing the contract work. The plaintiff was required to employ trained and skilled workers and salary of such workers would be paid by the plaintiff, as per the provisions of the Minimum Wages Act 1976, to carry out the contract work. The condition precedent, as stipulated in the contract, is that as per the provisions of the Minimum Wages Act, the plaintiff has to pay wages to the workers and as per the rates notified from time to time, under the said Act with respect to unskilled, semi-skilled and skilled workers. It is submitted that as per the practice, minimum wages are to be paid to the workers were revised and increased twice in a year and, in such a situation, the plaintiff would be required to increase pay to its worker. Every time when the wage would increase, it would put additional financial burden on the head of the plaintiff and this is an unforeseen event.
20. The Gujarat Electricity Board and its policy so far as labour laws are concerned, it was printed in the booklet of labour laws. In the booklet, the mode, method and manner to calculate the rise of labour escalation price is given in a Page 24 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined scheduled formula. The said formula, as mentioned in Schedule-'B', provides for detailed calculation for labour escalation charges, which is as under.
"1. Labour escalation will be paid as per formula given below:-
A K/100 x BA X (RR-PR)/PR
Kindly read:-
A=Amount of labour escalation payable. K=%age of labour escalation = 80% RR= Revised minimum labour wages to the unskilled contract labour.
PR = Prevailing minimum labour wages of unskilled contract labour on the date of opening of tender i.e. Rs.27.40."
21. Learned advocate, Mr.Aspi Kapadia has submitted that said formula would be applicable to the defendants as per the terms and conditions of the work order/ contracts. The clause of 'labour escalation' is already inserted since 1989. Learned advocate, Mr.Aspi Kapadia has submitted that the appellants have straneously put emphasis on the words used in the said labour escalation formula, and submitted that said formula is strictly restricted in respect of the 'unskilled labourer' and it does not apply to the 'skilled labourer' and, therefore, the claim Page 25 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined of the plaintiff is not tenable. He has submitted that such contention or defence is not a part of the pleadings i.e. written statement of the defendant in the suit and the defendant had never raised any defence before the trial Court, even at the time of leading the evidence by the defendant and this contention is taken for the first time in the present First Appeal without there being any foundation in the pleadings. Hence, the appellant is not entitled to raise such defence at this stage and, therefore, the contention raised by the appellant is untenable. He has further submitted that without prejudice to the aforesaid contention, it is not correct on merits as well.
22. The "labour escalation" Clause is inserted in the contract in the year 1989 onwards and the opening sentence of the labour escalation clause provides that the labour escalation in general terms and it is not restricted to the unskilled labourers only. At the time of application of the term of contract, it has to be read in harmonious and rational manner and it is required to be applied to all the categories of labourers i.e. skilled, unskilled and semi- skilled labourers by gathering the intent of the said clause. It is culled out that the formula is provided, as the means for calculation of "labour escalation" to be paid to the contractor Page 26 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined in a rational manner and said formula is just a tool to calculate the amount and not a substantial provision to determine the entitlement of labour escalation. In the formula, the word "unskilled" used in variable parameters and "RR" and "PR" are used for the purpose of demonstration only and it does not in anyway restrict the entitlement of the contractor for his right of labour escalation, which is expressly provided in the contract. Thus, when labour escalation is to be paid, it is to be calculated with respect to the skilled, unskilled and semi-skilled employees also. The interpretation of the conditions of contract has to be made in a pragmatic and harmonious manner, which ultimately increases the business efficacy and makes a contract workable.
23. Learned advocate, Mr.Aspi Kapadia has further submitted that interpretation of contract stands on different footing than interpretation of statutes. The statutes are drafted, putting in much more effort and time, and are generally more meticulous than the contract. While interpreting the statutes, the Court has to cull out the intention of the statutes and provide a purposeful interpretation. He has further submitted that from the relevant documents and oral evidence on record, the plaintiff is entitled to reimburse claim as per the Page 27 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined conditions of Clause of 'labour escalation' in the contact in respect of skilled labourers.
24. Learned advocate, Mr.Aspi Kapadia has also submitted that there is no dispute that minimum wages of the skilled workers have increased under the provisions of the Minimum Wages Act after the contract was awarded to the plaintiff and the plaintiff has paid the enhanced rate of wages to the skilled labourers. He read the contents of the Notifications for enhancement of wages issued by the Government at regular intervals and, in almost all the documents at the time of increasing the wages the Government has increased the wages of unskilled, skilled workers and semi-skilled workers. It is also an admitted position of fact that the plaintiff was maintaining register of wages, which was regularly inspected and scrutinized by the office of the Labour Commissioner. They have verified the record and proceeding and certified the same. Those documents are part and parcel of the record and it is found out from the record that on the strength of the Notifications under the Minimum Wages Act, the plaintiff had increased and paid wages to skilled workers and it is unfair on the part of the defendants to take a technical defence subsequently by raising the issue of non-availability of a particular phrase i.e. 'skilled workers' in the contract.
Page 28 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined Therefore, the plantiff will have to suffer huge financial loss, considering the fact that wages as per labour escalation have been paid by the plaintiff from its pocket. He has further submitted that time and again the plaintiff had made a request to the defendants to make payment of labour escalation in respect of skilled labourers, however, the defendants declined to pay the same, despite the fact that the plaintiff is eligible for getting the wage rate as per the labour escalations in respect of 'skilled workers' as per the terms and conditions of the contract. He has further submitted that after considering and appreciating the evidence on the record, learned Judge has passed a very exhaustive order and the evidence is discussed at threadbare and after considering all the materials just, fair and reasonable order is passed and it is not required to be interfered with.
25. Mr.Aspi Kapadia, learned advocate for the respondent has submitted that the appellant has raised the contention in the case that the dispute between the parties pertains to wage rate as per the contract and, therefore, the Civil Court does not have the jurisdiction to decide the suit, as it is a dispute between employer and employee. Said contention is thoroughly misconceived and not tenable in the Page 29 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined eye of law. In fact, there was no legal dispute between the employer and employee with regard to the terms and conditions of the contact. The suit is filed essentially for a contractual dispute between the plaintiff and GEB to compensate as per the contractual agreement in respect of "labour escalation" clause. Therefore, the contention regarding lack of Jurisdiction raised by the appellant is thoroughly misconceived. He has submitted that the appellant has not stated as to which particular provision of the Act bars the jurisdiction of the Civil Court. It is a trite principle of law that Civil Suits of all natures are maintainable, unless expressly or employed barred by any particular judgment.
26. Learned advocate, Mr.Aspi Kapadia has further submitted that the contention regarding the suit being time barred is also not correct. The suit is for recovery of the money due under the contract and would be governed by residuary article 113 of the Limitation Act and said article provides for a period of 3 years from the date when actual right to sue accrues. The final running bill was issued on 4.12.1996 and payment thereof was made by the defendant in the year 1997. The contract work was extended till 1994 and work completion certificate was received by the defendant on 12.3.1997. Cheque Page 30 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined of an amount of Rs.79,052.50 ps. Was issued on 7.3.1994 and cheque of Rs.1,18,962.75 was issued on 29.9.1994 in respect the bill issued to the plaintiff for the labour escalation price. The plaintiff had issued legal notice to the defendant and they have given reply on 28.11.1994 and 13.3.1995 respectively and within a period of 3 years i.e. on 8.3.1996 the suit is filed and it is well within the period of limitation. Learned advocate, Mr.Aspi Kapadia has placed reliance on the following case laws and submitted that the principles enunciated in these judgments crystallize the position of law in a very clear terms and based on said principles just, fair and reasonable decision was rendered by learned Judge which is not required to be interfered by this Court and appeal filed by the appellant is required to be dismissed with exemplary cost.
(i) Pearey Lal Bhawan Association v. M/s. Satya Developers Pvt. Ltd. reported in 2010 (173) DLT 685.
(ii) Union of India v. D.N.Revri and Co. and Others, reported in (1976) 4 SCC 147.
(iii) Modi Co. v. Union of India reported in AIR 1969 SC 9.
(iv) Novartis Vaccines & Diagnostics Inc. v.
Aventis Pharma Limited reported in 2010 (2) Arb LR 85.
Page 31 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined
(v) The Premier Automobile Ltd. v. Kamlekar Shantaram Wadke of Bombay reported (1976) 1 SCC 496.
(vi) State of Andhra Pradesh v. Manjeet Laxmi Kantha Rao reported in (2000) 3 SCC 689.
(vii) Secretary, Irrigation Department, Government of Orissa and Others v. G.C.Roy and Others reported (1992) 1 SCC 508.
(viii) Orient Structural Engineers Pvt. Ltd.
v. State of Kerala reported in (2021) 6 SCC 150.
27. We have gone through the record and proceedings of the case, read the evidence available on record and heard the arguments canvassed by both the learned advocates. Before dwelling into the issue involved in the present controversy, we would like to go through certain factual aspect of the matter which are narrated in nutshell as under:-
27.1 The respondent-original plaintiff has filed Special Civil Suit No.17 of 1996 on 8.3.1996 and claimed Rs.1,38,86,159.20 paise with interest at the rate of 18% per annum towards the difference of wage rate between civil unskilled labourer and technically skilled labourer. Learned 3rd Joint Civil Judge (S.D.), Surat, Camp at Bardoli allowed the suit by passing the judgement and award on 29.3.2001 and directed the defendants to pay an amount of Rs.69,97,426.20 ps. with Page 32 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined interest at 10% per annum from the date of filing of the suit till its realisation. The respondent is a registered partnership firm and engaged in the business of power maintenance and breakdown of power maintenance. The appellant GSECL has a thermal power station at Ukai Dam, Tapi. It had floated a tender for the purpose of maintenance of coal mill and coal plant. For the period between 1984 to 1993, the tender was allocated to the defendant-original plaintiff for the purpose of completion work of power plant and coal mill maintenance, as per the terms and conditions mentioned in the contract.
After assignment of the contract, both the parties executed an agreement in the form of contract, which was agreed upon by both the parties. As per the terms and conditions of the tender, the defendant has to engage trained and experienced workers for the purpose of maintenance work. The defendant has successfully completed the maintenance work for the period between 1984 to 31.3.1994 and after completion of each calendar year defendant used to prepare running bill for the purpose of realisation of the amount mentioned in the contract. After scrutinizing and verifying the same, the appellant-original defendant had already paid the amount to the plaintiff and as per the terms and conditions of the tender, the plantiff has Page 33 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined also obtained necessary license from the licensing authority under the provisions of the Labour Laws in force at the relevant point of time and it is the bounden duty of the head of the plaintiff to follow the terms and conditions mentioned in the license scrupulously. The plaintiff has completed the work of maintenance by engaging skilled labourers and being a contractor, the plaintiff had to pay wages to the labourers as per the terms and conditions of the tender and as per the Rules and Regulations and Notifications issued by the Government from time to time in this regard. During the period from 1.4.1985 to 31.3.1986, as per the existing rates of the skilled workers notified in the Notification of the Government, the wage rate of civil and unskilled labourer is Rs.16.05 and technically skilled labourer is Rs.22. So far as rates prevailing for the period between 1.10.1993 to 30.9.1994 for civil unskilled workers is Rs.34 and technically skilled labourer is Rs.43. Considering the difference in wage rate for the aforesaid period, on the strength of the Notification issued by the Government, the plaintiff has calculated the wage rate difference between civil unskilled labourer and technically skilled labourer, total amount would come to Rs.67,97,426.29 ps. The plaintiff wrote a letter in this regard to the Page 34 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined defendants and the defendants had accepted the said amount of recovery and partly paid Rs.79,052.50 ps. On 7.3.1994 and Rs.1,18,962.74 ps. On 29.9.1994 through cheques but, thereafter, the defendants have refuted the claim of the plaintiffs. Therefore, the cause of action has arisen and the plaintiff was constrained to file the suit against the defendant for the difference of labour escalation charges and, accordingly, suit is filed.
28. It is the specific case of the defence that as per the terms and conditions of the contract they have already paid the amount to the plaintiff and there is no outstanding due which is required to be paid to the plaintiffs. At the time of executing contract, the plaintiff had willingly accepted the liability to pay labour wage rate as per the terms and condition of the contract, Rules and Regulation and Notifications issued by the Government from time to time. It is stated in the written statement that as per the formula given in the tender, the defendant had already paid to the plaintiff and the plaintiff has accepted the said amount without any protest or objection, and from the very beginning, it is the stand of the defendant that they have not paid single penny towards recovery of the amount, as stated in the plaint and the Page 35 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined defendants need not have to pay any difference of amount, as per the claim of the plaintiff. The issues were framed and thereafter, the trial was commenced. Both the parties have led the evidence and after recording of the evidence, closing purshis was submitted. Thereafter, the arguments were canvassed and after considering the material available on record, learned Judge has thought it fit to allow the suit, against which present appeal is filed.
29. We are of the opinion that prima facie the dispute in the present matter is in very narrow compass. The parties have entered into an agreement by executing a contract and at the time of execution of the contact, both the parties have accepted the terms and conditions mentioned in the contract. It is the settled proposition of law that once a contract is executed between the parties then they have to strictly adhere with the provisions contained in contract and the parties cannot go beyond the purview of the conditions mentioned in the contract. Whatever terms and conditions mentioned in the contract are binding to both the parties and it is the duty of both the parties adn they are duty bound to follow the terms and conditions mentioned in the contract "stricto sensu". If certain terms and conditions are not agreeable to either party, in that Page 36 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined event, they could have raised objection at initial stage before execution of the document but once the document is executed then the terms and conditions of the contract is binding to them.
30. Admittedly, in this case, both the parties have executed an agreement with certain terms and conditions and those conditions are equally binding to both the parties and they have to strictly adhere with the terms conditions of contract, more particularly, condition with regard to "labour escalation". It is an admitted fact that the defendant had floated a tender which was filled up by the plaintiff and subsequently given to it by the defendant. During the period between 1984 to 1988, clause of 'labour escalation' was not there in the contract and, therefore, the plaintiffs are not entitled to claim any amount of difference of wage rate of labour escalation during that period. Clause of labour escalation is inserted first time in the year 1989. We would like to reproduce the contents of the clause inserted in the contract in the year 1989 with regard to the labour escalation.
"Price/rates are firm but subject to labour escalation as explained in Schedule-B."
31. It is the specific stand taken by the original Page 37 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined defendant appellant herein that at the time of execution of the contract, the defendant had prepared a policy in the form of the terms and conditions of Labour Laws, which was printed in a booklet, wherein clause No.14, specific provision in relation to 'labour escalation' is mentioned. Both the parties have to follow the terms of the contract scrupulously. It is the specific say of the defendants that a specific schedule (chapter) under the head of 'labour escalation' is provided in the booklet, and, therefore, the appellants-defendants are duty bound to pay labour escalation wage rate to the plaintiffs as per the conditions of contract. The defendants cannot prepare a bill of difference of wage rates beyond the terms and conditions mentioned in "Schedule-B". The parties had entered into agreement to adhere with the terms and conditions of the contract mentioned in the tender and the contract for works. It is specifically stated that 'RR' means revised minimum wage of unskilled contract labourer and 'PR' means 'prevailing minimum wages of unskilled contract labourers on the date of opening of the tender'. Said formula is embodied in the body of the contract and both the parties have endorsed the said document, therefore, the defendant cannot go beyond the provisions mentioned in the contract and the Page 38 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined booklet. It is the say of the plaintiff that for doing the work of the defendant plaintiff has engaged the skilled labourers and as per the Notification, rate notified for the skilled labourers was required to be paid, whereas as per the case of the defendants, the terms and conditions of the labour escalation clause of the contract would be applicable in case of 'unskilled labourers' only. Therefore, the defendants are not liable to pay the amount of difference of wage rate due to labour escalation for skilled labourers. In fact, after completion of the work, RA bill was prepared by the plaintiff, which was verified and granted by the defendants. At the relevant point of time, they have not raised any protest or objection about the said bill. Plaintiff's witness has admitted in a very categorical terms during the cross- examination that the cheque of Rs.79,052-50 ps. was issued on 7.3.1994 and another cheque of Rs.1,18,962.74 ps. was given on 29.9.1994 towards running bill. Said witness has also admitted that cheque was issued towards payment of running bills and there was no dispute with regard to difference of payment of wage rate. The admission on the part of the said witness goes on to show that the defendants have never paid any amount towards difference of wage rate for the skilled labourers. It is also fact on Page 39 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined record that at the time of bidding the tender, the plaintiff demanded charge of Labour Escalation at 120% but subsequently, he has reduced the percentage of "labour escalation" at 80% instead of 120%. In the same way, he has stated estimated rate in tender at Rs.12,87,102/- but the same was also reduced and revised, by deducting 5% from it, an amount of Rs.11,75,000/- was quoted, and on the strength of said hand written letter sent by the plaintiff, the defendant approved the tender and contract was awarded to him.
32. The applicability of the labour escalation wage price as per the formula mentioned in "Schedule- B" is restricted only in respect of "unskilled labourers and it is not applicable to the "skilled labourers" as per the pleadings. Evidence was also not laid to that effect before the trial Court by the defendants and, for the first time, before this Court defence is taken by the defendants. We have gone through the written statement and found that such defence was not raised by the defendant but it is settled preposition of law that the appeal is a continuous proceeding of the suit and the documents upon which reliance has been placed by the defendant is part and parcel of the record produced by the plaintiff and duly exhibited by the Honourable Court. The plaintiff is also Page 40 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined placing reliance on the formula mentioned in "Schedule-B" to substantiate his case for difference of wage rate. The documents on which reliance has been placed by both the parties and admitted in evidence, then on the basis of the phraseology employed in the body of the contract during the course of argument, if any advocate would like to develop any argument, in that event only on the count that defence was not taken in the written statement, such submission cannot be rejected.
33. It is true that during the course of argument, learned advocate for the respondent-original plaintiff has tried to put emphasis upon the word 'unskilled' used in the formula of Schedule-B of the contract is just for demonstration purpose and it does not in anyway restrict the entitlement of the contract, which is provided in general terms. It is submitted that the formula is given to calculate the wage fare of the labour escalation with respect to the skilled employees, semi-skilled employees and unskilled employees also and abbreviation 'RR' and 'PR' are variable parameters and have to be replaced by the words 'skilled, unskilled and semi skilled' pragmatically, as the case may be and intention of the parties are required to be gathered, considering overall nature and circumstances of the contract and its type.
Page 41 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined Therefore, interpretation of the terms and conditions of the contract has to be made in harmonious manner with a pragmatic approach.
34. During the course of arguments, learned advocate, Mr.Aspi Kapadia for the respondent- original plaintiff has fairly conceded that it is true that the parties have entered into an agreement and as per the terms of the contact, the clause of labour escalation would be required to be calculated as per the formula mentioned in "Schedule-B" and the abbreviation PR and RR are used for the word unskilled worker. Learned advocate, Mr.Kapadiya has submitted that at the time of leading the evidence, the plaintiff has produced almost all notifications pertaining to revised daily wage rates for the contract labourers for the period between 1984 to 1994 issued by the Board. He submitted that Honourable Court would make cursory glance on it even then it would be found out that the Government has considered the revised daily wage rates of skilled, unskilled and semi-skilled workers at a time in one circular.
35. We have seen the terms and conditions mentioned under the title of condition of contract incorporated in the contract which are as under:
"Conditions of Contract:-Page 42 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023
NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined All the conditions enumerated in the Book-let "Tender and Contract for works" and the specifications and drawings attached with the tender shall apply for carrying out this works, in addition to any other or further terms and conditions mutually agreed upon."
36. A copy of the tender contract, specifications and booklet along with Annexure-A is produced on record. Both the parties have agreed upon the terms & conditions of the contract. As we have gone through the formula of "Schedule-B". When the parties have entered into an agreement after reading the terms and conditions then it would be binding to all the parties, who are signatory of the contract. It is the specific case of the appellants-defendants that they cannot go beyond the terms & conditions of the contract. If intention of the GEB, at the time of executing terms and conditions of the contract, was to pay difference of wage rate to the skilled and semi- skilled workers, in that event, they would have specifically mentioned it in the contract. In the formula of calculation, Schedule-B, the word "unskilled worker" is mentioned, however, as per the case of the plaintiff, the same was equally applicable to the skilled and semi-skilled workers. In this case, said Clause is not available as it is not mentioned anywhere in the contract. The parties will have to strictly Page 43 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined adhered with the terms and conditions of the contract and the parties cannot go beyond the conditions mentioned in the contract. We are in agreement with the said submission put up by the learned advocate for the appellant. In absence of specific averment and/or non-availability of express provision in the contract, liability to pay difference of wage rate, labour escalations for skilled workers cannot be fastened on the head of the appellant-defendant. We are agreeing that at the time of appreciating the documentary evidence produced on record, we have to consider it harmoniously. We have to consider and interpret the terms of contract and also have to take a pragmatic approach. One cannot go beyond the purview of the provisions of the contract. Therefore, we are of the opinion that the terms and conditions of the contract can be read simply and in a plain manner, as it is mentioned in the contract and, prima facie after going through the conditions of the contract, we are of the opinion that as per the "labour escalation" clause, only unskilled labouerer would be entitled to get benefit of wage rate difference as per the Notification. We have tried our level best to verify whether anywhere in the terms of the contract, anywhere category of "skilled labourer" is included or not but we could not find the same. Learned advocates on Page 44 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined both the sides have also fairly stated at the bar that they have also verified but they could not find any particular phrase incorporated in the terms of contract in this regard. Therefore, expressly in absence of category of "skilled labourers" and "semi-skilled labourers" in the terms & conditions of contract said benefit cannot be extended in favour of the contractor.
37. We have also verified the record and proceedings and it is found that it is the specific stand of the plaintiff that they had engaged skilled technical persons to complete the work and almost everywhere in the operative part of the order, learned Civil Judge has mentioned that plaintiff had utilized the services of the skilled workers, however, it is specifically mentioned in the calculation formula of "Schedule-B" that so far as labour escalation Clause is concerned, it would be applicable only to the unskilled workers. Therefore, we are of the opinion that when the plaintiffs are not entitled to get any wage rate difference as per the notifications issued by the State of Gujarat from time to time, considering Clause-B of labour escalation. As per the terms and conditions of the contract, the plaintiff has to obtain licence from the office of the Labour Commissioner, which he had obtained and as per the terms and conditions of licence, the Page 45 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined plaintiff has to pay the wage to the labourers as per the Minimum Wages Act as well as the rule and regulations and Notifications issued from time to time. The Labour Inspector has to verify and scrutinize the record of the contractor. The Labour Inspector was examined as a witness by the defence and he has categorically stated that he has visited the office of the contractor and verified all the documents pertaining to the labourers of the said contract and, as per the Government Notifications, the contractor has already paid wages to the labourers and, as such, they have not raised any query before certifying the said registers. It is also brought to our notice that, as per the terms and conditions of the tender, labour laws and Factory Act and any amendment made in it from time to time shall be binding to the contractor. In condition No.12 it is stated that, "Labour laws & Factory acts in existence and any amendment from time to fime shall be binding to the contractor."
38. As the Labour Commissioner has not raised any query and the plaintiff has taken the services of the skilled labourers, as per condition No.12 mentioned in the tender, the defendants are not liable to pay difference of wage rate as claimed by the plaintiff in the suit. It was also brought to the notice of this Court that the Page 46 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined plaintiff has written letter to the defendant on 6.1.1990, which was produced on record at exhibit-89. It is mentioned in the said letter that at the time of filling up the tender, the plaintiff has demanded 120% Labour Escalation 120%. Thereafter, plaintiff had voluntarily reduced the percentage of L.E. to 80% instead of 120%. The plaintiff had voluntarily reduced the price as quoted in the bid by writing a letter, not only that he has also reduced the price from Rs.12,87,102/- to Rs.11,75,000/-. On the strength of said hand written letter sent by the plaintiff, on the letter head of the Company, the defendant had considered his offer and contract was awarded to him. Therefore, in the calculation of formula "Schedule-B", 80% is mentioned. In fact, the plaintiff was well aware about the position of law that every year two times notifications pertaining to revise rate of labour escalation would be issued by the Government. The time duration to complete the work is already mentioned in the tender and the labour charge prevailing at the relevant point of time to do a particular work is already within the knowledge of the plaintiff, over and above this, it is also known to the plaintiff that two times labour escalation charge would be enhanced under the clause of labour escalation and considering all these aspects, the plaintiff Page 47 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined might have given offer at the time of filling up the tender, after considering and calculating all relevant factors. In this case, the plaintiff has filled tender with a specific amount in mind, however, for the purpose of getting the tender in his favour, the plaintiff has written a letter to the authority specifically stating that is ready to reduce the amount of tender as well as percentage of labour escalation charge. Now, after completion of the work, the plaintiff has come with a case that due to the Notifications issued by the State Government for the revised rate of wages, the plaintiff has incurred losses. The said argument itself is not palatable and believable.
39. The appellant has also raised the issue of territorial jurisdiction and raised objection about the maintainability of the suit as the issue involved in the matter is pertaining to labour contract and, as per the terms and conditions of the contract, if any dispute arise then the parties have to approach the Labour Commissioner. The emphasis was supplied by the defendants upon the licence issued by the licensing authority under Section 12 of the Contract Labour Act, 1970 and as per Rule 25 of the Contract Labour Central Rules 1971 and a contractor is liable to follow all the conditions enumerated in the contract. In case Page 48 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined of dis-agreement and breach of condition of the contract with regard to the type of work carried out by them, if any dispute arises, the same shall be decided by the Labour Commissioner and his decision shall be final. Hence, only the Labour Commissioner is competent authority to decide the issue involved in the present case.
40. We have gone through the record and proceeding and found that, in fact, as per the terms and conditions of the contract, the plaintiff had executed the work and after completion of the work Completion Certificate was also issued by the defendant and, accordingly, running bill was prepared and submitted, which was also cleared by the defendants. Subsequently, the plaintiff issued legal notice, which was duly served to the defendants and they have repudiated the claim of additional wage rate of the defendants. Therefore, for the purpose of recovery of additional wage rate, Civil Suit is filed. The dispute between the parties does not pertain to any breach of terms and conditions of the contract, as the contract is already completed and Completion Certificate was also given. Dispute is pertaining to the difference of wage rate and it falls within the category of the money suit. Therefore, the Civil Court has jurisdiction to try, conduct and entertain the suit filed before it. As both the parties are Page 49 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined within the territorial jurisdiction of the concerned Civil Court as well as the work executed by the parties is also within the territorial jurisdiction of the concern Civil Court, it can safely be said that the Civil Court is competent to decide the dispute pertaining to refund of additional wage rate paid by the plaintiff.
41. One another issue raised by the defendant is that as per the Law of Limitation for the purpose of recovery of the amount, suit is required to be filed within a period of three years. Admittedly, the plaintiff has filed the suit for recovery of the additional excess wage rate paid under the Clause of 'labour escalation' for the period between 1984 to 1994. The tenders were issued in every calendar year and the work was also completed in that particular calendar year. After completion of work of each calendar year, running bill was prepared and, accordingly, account was settled and, in the new year, new contract is started on the basis of fresh tender notice issued by the defendants and eventually all these years, contracts had gone to the plaintiff. Therefore, with the sole intention to bring the cause of action for the suit within the time period, as per the provisions of the Law of Limitation, suit for recovery of the excess wage rate was Page 50 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined prepared and filed for the period between 1984 to 1994. The suit is cleverly drafted with a sole intention to bring it within the period of limitation and, as per the judgment of the Honourable Apex Court as well as of this High Court, if any person has cleverly drafted the petition just to bring the suit within the period of limitation, by collecting facts in that case, said suit is not required to be entertained.
42. Admittedly the labour escalation clause was inserted in the contract in the year 1989. Therefore, for the period between 1984 to 1988, in absence of any labour escalation Clause, the plaintiffs have no legs to stand for a moment. This fact was already brought to the notice of the plaintiff at earlier point of time and, during the course of trial, it was candidly accepted by the plaintiff in the evidence also. The plaintiff has completed the work in the year 1994 and the suit is filed in the year 1996, so at the most, it can be said that the suit pertaining to demand of wages for labour escalation can be covered in such suit so far as applicability of law of limitation is concerned. The plaintiff has filed the suit for the purpose of recovery of the excess amount paid to the skilled labourers for the period from 1984 to 1994, on the basis of difference of wage rate Page 51 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined mentioned in the Government notifications, and as per the 'labour escalation' clause in the contract, however, the suit of the plaintiff is time barred and it is required to be dismissed, so far as difference of wage rate from year 1984 to 1994 are concerned.
43. As the Clause of labour escalation is inserted in the contract in the year 1989, the plaintiff is not entitled to seek any relief for the period between 1984 to 1988. So far as period from 1989 to 1994 is concerned, one suit is filed by consolidating all the running bills of these years. As per the statutory provision within a period of 3 years suit is required to be filed. In that event, as per the say of the plaintiff, cause of action has started from the date of refusal of notice of the plaintiff and within a period of 3 years from that date, they are entitled to file the suit. However, for the dispute of wage rate difference of 1989, suit is required to be filed within a period of 3 years thereafter. In the same way, chronologically for the next years tender contract, they have to file separate suit for recovery of additional wage rate within a period of 3 years. Admittedly, suit is filed on 8.3.1996. Therefore, the bills of wage difference can be considered for the three years prior to the date of institution of the suit. Therefore, we are of Page 52 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined the opinion that at the time of deciding the said issue, learned Civil Judge ought to have considered the provisions of Law of Limitation in light of the evidence available on record. Prima facie, it seems that learned Judge has not appreciated the evidence in proper manner and committed grave error by considering all the bills which would not fall under the period of limitation, as contract was completed in the year 1994 and notice was issued for the claim of the plaintiff is repudiated by the defendants. The said view adopted by learned Judge is not correct and, therefore, we deviate from the said view and we are of the considered opinion that only the bills pertaining to the period between March 1993 to 1994 would fall in the criteria of law of limitation.
44. Learned advocate for the appellant has strenuously made submissions before this Court that the Gujarat Electricity Board is not producing and/or shaping farious and/or non- farious metal and, therefore, they would not fall within the term of "Industrial Engineering Establishment" and to buttress his claim, he has put reliance upon the decision of the Patna High Court in the case of Pradeep Lamp Workers Union v. State of Bihar and Others reported in (1998) IILLJ 492 Pat. The Gujarat Electricity Board has not indulged in the process of manufacturing Page 53 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined products as per the definition of Section 2 (K) and, therefore, it would not be considered as an "industrial engineering establishment".
45. It is cardinal principle that if the facts are different, one additional fact would make a world of difference in applying the ratio as a precedent. At this juncture, we would like to refer to the decision of the Hon'ble Apex Court in case of State of Madhya Pradesh Vs. Narmada Bachao Andolan & Anr., reported in (2011) 7 SCC 639, of which Paragraph No.64 reads thus,
64. The Court should not place reliance upon a judgment without discussing how the factual situation fits in with a fact-situation of the decision on which reliance is placed, as it has to be ascertained by analysing all the material facts and the issues involved in the case and argued on both sides. A judgment may not be followed in a given case if it has some distinguishing features. A little difference in facts or additional facts may make a lot of difference to the precedential value of a decision. A judgment of the Court is not to be read as a statute, as it is to be remembered that judicial utterances have been made in setting of the facts of a particular case. One additional or different fact may make a world of difference between the conclusions in two cases. Disposal of cases by blindly placing reliance upon a decision is not proper. (Vide:
MCD v. Gurnam Kaur, Govt. of Karnataka v.Page 54 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023
NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined Gowramma and State of Haryana v. Dharam Singh)".
46. We have verified the Record and Proceedings and found that the Gujarat Electricity Board is generating electricity at its thermal power station and erected big plant to create and generate electricity. Only the company, which is used to produce and generate any product would fall under the definition of "Industry" and, therefore, the submission canvassed by learned advocate, Mr.Viral Dave, that Gujarat Electricity Board will not fall within the meaning of Section 2 (K) is devoid of merits and it is rejected.
47. Considering the above stated factual aspects, we are of the opinion that labour escalation clause is applicable only to unskilled labourers, as per the terms and conditions mentioned in the contract and, more particularly, the calculation method provided in "Schedule-B". As per the case of the plaintiff, he has taken services of the skilled labourers for the purpose of fulfilling the contractual work. However, in our view, the plaintiff is not entitled to get additional wage rate for the skilled labourers on the basis of Notifications issued by the Government of Gujarat, after execution of contract.
48. Rest of the issues were decided and discussed in the body of preset judgment. Therefore, we are Page 55 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023 NEUTRAL CITATION C/FA/630/2002 CAV JUDGMENT DATED: 09/08/2023 undefined of the opinion that the impugned judgment and order dated 29.3.2001 passed by learned 3rd Joint Civil Judge, (SD), Surat, Camp at Bardoli, in Special Civil Suit No.17 of 1996 is found to be perverse and appears to be not sustainable in law in view of the background of peculiar facts as discussed herein before and the same is hereby quashed and set aside by allowing present appeal. Record and proceedings be sent back to the concerned trial Court forthwith. No order as to costs.
Sd/-
(ASHUTOSH SHASTRI, J.) Sd/-
(DIVYESH A. JOSHI, J.) Malek/Gautam Page 56 of 56 Downloaded on : Sun Sep 17 00:46:27 IST 2023