FAO No.2909 of 2014 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.2909 of 2014 (O&M) Date of Decision: 14.05.2014 Union of India ....Appellant Versus M/S.Ramesh Kumar Garg and another ....Respondents CORAM:- HON'BLE Mr.JUSTICE RAJIV NARAIN RAINA Present: Dr.
Ashwinie Kumar Bansal, Advocate, for the appellant.
To be referred to the Reporters or not?.
Whether the judgment should be reported in the Digest?.
RAJIV NARAIN RAINA, J.(Oral) The works contract was floated by tender dated September 20, 1991 by the appellant which was awarded to the respondent.
Disputes arose between the parties which were referred to arbitration.
The award came in favour of the respondent.
The challenge to the award failed.
The Union of India is in appeal.
The dispute in the present appeal is restricted to claim No.6 under Appendix 'B' of the Contract Agreement which relates to payment of fair wage.
Clause 58 of the agreement deals and defines what is 'fair wage; and reads as follows:- “58.
Fair Wage- (a) The contractor shall pay not less than the “fair wage”.
a defined below or the minimum wage fixed under the Minimum Wages Act, whichever is higher to labourers engaged by him on the work.
means wage whether for time or piece-work notified at the time of inviting tenders for the work and where such wages have not been so notified the wages prescribed by the Chief Engineer for the stations at which the Work is done.
Mittal Manju 2014.05.19 14:04 I attest to the accuracy and integrity of this document Chandigarh FAO No.2909 of 2014 (O&M) -2- (b) The Contractor shall notwithstanding the provision of any Contract to the contrary, cause to be paid a 'fair wage' or minimum wage fixed under the Minimum Wages Act whichever is higher to labourers indirectly engaged on the Work including any labour engaged by his sub-contractors in connection with the said Work, as if the labourers had been directly employed by him.
(c) In respect of all labour directly or indirectly employed on the Works for the performance of the Contractor's part of this Agreement, the Contractor shall comply with or cause to be complied with the M.E.S.Contractor's Labours Regulations (appended hereto as Annexure 'A' to these Conditions) in regard to all matters provided therein and with all other Labour Laws as may be applicable.
(d) The Garrison Engineer concerned shall have the right to deduct, from the moneys due to the Contractor, any sum required or estimated to be required for making good the loss suffered by a worker or workers by reason of non- fulfilment of the Conditions of the Contract for the benefit of the workeRs.non-payment of wages or of deductions made from his or their wages, which are not justified by the terms of the Contract or non-observance of the Regulations.
(e Vis-a-vis the Government, the Contractor shall be primarily liable for all payments to be made under, and for the observance of the Regulations aforesaid without prejudice to his right to claim indemnity from his sub- contractORS.(f) The Regulations aforesaid shall be deemed to be a part of this Contract and any breach thereof shall be a breach of this Contract.”
The dispute with respect to the present claim arose from a notification issued by the Government of Haryana under the Minimum Wages Act increasing the minimum wage on August 29, 1991 payable to workeRs.It happened that the notification was issued prior to the submission of tender where rates of labour were quoted on wages payable prior to notification and in ignorance of it.
The contractor claimed the difference of wages in his favour.
The Arbitrator in para.113 of the Award reasoned that the benefit of increased minimum wages should go to the contractor and against the Union of India.
Para.113 reads as follows:- “113.
It is important to note that above Gazette notification Mittal of Haryana Manju 2014.05.19 14:04 I attest to the accuracy and integrity of this document Chandigarh FAO No.2909 of 2014 (O&M) -3- Govt was signed on 29 Aug 91.
Such notifications are thereafter collated and goes for dispatch after serial numbers are put.
Copies of such gazette notification are also endorsed to central Govt.
organisation like Director, Labour Bureau, Govt.
of India, Labour enforcement officer (Central) Rohtak, regional labour Commissioner (Central) Chandigarh, being in mailing list.
GE (P) No 1 in his above quoted letter on 11 Jun 92 has only inferred in his letter that since date of gazette notification is earlier to date of receipt of tender therefore higher rate of Rs.35.75 will be applicable.
Against this inference of GE (P) No 1, a confirmation letter from labour enforcement officer of Kanel dated 23.11.92 is considered to be a much more authentic document who certify the labour rate of 33.95 on date of receipt of tender besides being a recipient of aforesaid State Govt Gazette notification through Central Govt Channel.
It leaves therefore no doubt that claimant priced his tender based on minimum fare wage (Lo) as Rs.33.95 and he is entitled for additional refund.
However, no other excalation other than above becomes due to claimant, as contended in his claim."
Mr.Bansal argues that the notification must be deemed to have been known to the contractor before he submitted the tender documents and, therefore, would be deemed to have knowledge of the same to contractor's peril with the old rates running in favour of the appellant Union of India.
The interpretation to be placed on fair wage in Clause 58 to my mind cannot be pinned down to the date of inviting tenders as argued by Mr.Bansal since the contractor is obliged by law to pay the higher wage to the labour employed by it in execution of the works contract.
If he paid the higher wages more than the ones which was tendered would cause wrongful loss to him for which he deserves to be compensated.
The argument based on the ancient principle that ignorance of law is no excuse is not appropriate in the modern context where a plethora of notifications are issued even for the experts to keep instant track of.
There is hardly an absolute presumption attaching to knowledge of notifications and changes in the law made by subordinate legislation from time to time and found in official Gazettes.
Mittal Manju It 2014.05.19 14:04 I attest to the accuracy and integrity of this document Chandigarh FAO No.2909 of 2014 (O&M) -4- has become more and more difficult for citizens to keep track of the changing law and the notifications issued under various enactments to attach a presumption of deemed knowledge of them.
I, therefore, do not think Mr.Bansal is wholly correct in his submission on this aspect.
I find another reason to rule against the appellant as the Union of India is bound by the notification and to give effect to increase in minimum wages notified twenty two days odd before the Tender was accepted.
The appellant was legally obliged to pay the higher wages to the labour employed by the contractor and cannot unduly enrich itself or be seen as a violator of the law.
Either party was bound to pay the difference so that workers did not suffer.
It is not the case of the appellant that there was failure on the part of the respondent firm to pass on the benefit of increased wages to the workforce thereby unjustly enriching themselves.
When seen from this angle the argument of the learned counsel cuts both ways.
Therefore, I am not inclined to interfere in the award or in the order from which this appeal arises and would disallow the appeal.
No other claim was pressed in appeal.
(RAJIV NARAIN RAINA) JUDGE1405.2014 manju Mittal Manju 2014.05.19 14:04 I attest to the accuracy and integrity of this document Chandigarh