Arvind Khanna vs International Airport Authority ...
1994 Latest Caselaw 543 Del

JUDGMENT

Usha Mehra, J.

(1) The platntiff, in response to the notice inviting tender issued by the defendant International Airport Authority, (hereinafter referred to as the 'Authority') submitted the tenders for the work of operation electronic Pabx telephone exchange (80 + 100 EPABX) at Delhi Airport. The exchange was to be manned round the clock basis everyday. The tender of the plaintiff was accepted on 10th October,1984 and the work was to commence on 11th 0ctober,1984. For the proper performance of the said contract dated 10th 0ctober,1984, the plaintiff was to engage employees as Telephone Operators. It was the term of the said contract dated 10th October, 1984 that the contractor shall at all time abide by the Minimum Wages Act, Salary Act and the Bonus Act currently inforce as stipulated by the Central and the State Governments respectively. It was further the term of the contract that the contractor shall disburse salary to the employees in the presence of authorised representative of the Asstt.Director (ELNCS). It is the case of the plaintiff that prevailing wages at the time of entering the contract was Rs.566.00 per month for the required category of employees which was enhanced to Rs.662.00 per month w.e.f. 15th October, 1985 and thereafter at Rs.781.00 per month w.e.f. 1st May,1987. These wages enhanced from time to time were paid by the plaintiff to the employees as per the chart filed as Annexure 'A' with the plaint. Thus a sum of Rs.1,38,051.00 balance due to be recovered from the defendant. The defendant authority has failed to pay, hence the suit.

(2) The Defendant Authority has filed the written statement. It took the plea that the Authority was not liable to pay the enhanced wages because there was no such term of the contract. The agreement dated 10th October, 1984,

(3) On the pleadings of the parties, following issues were framed : 1. Whether the defendant is not liable to the amount of increased wages paid by the plaintiff to Labour under the terms of the contract dated 10th 0ctober,1984 ? If so, how much ? 2. Whether the plaintiff is entitled to interest, if so, do what rate and for what period ?

(4) The parties agreed to lead their evidence by way of affidavit and accordingly it was ordered so. Affidavit of plaintiff Arvind Khanna was filed and on behalf of defendant Authority affidavit of Shri O.S.Tyagi, Senior Electronic Manager was filed. These witnesses were not subjected to any cross examination.

(5) I have heard Mr.Vijay Kishan, advocate for the plaintiff and Mr.Aruneshwar Gupta, advocate for the defendant Authority. I have also given my thoughtful consideration to the oral and the documentary evidence placed on record and the submissions made at the bar. Issue No. 1

(6) So far as making of payment to the employees by the plaintiff, as per the notification enhancing the wages is concerned, there is no denial of this fact on record. Defendant Authority is disputing this claim primarily on the ground that it is not covered by the terms of the agreement. According to defendant Authority, since the initial wages were to be paid by the plaintiff as they were his employees hence the enhanced wages were also to be paid by him. The same was not to be reimbursed by the Authority. This argument of the counsel for the defendant, to my mind, has no force. Clauses 17 and 18 of the agreement dated 10th October,1984 are relevant for the purposes of determination of this issue. These are reproduced as under:- "17.The contractor shall at all times abide by the Minimum Wages Act, Salary Act and Bonus Act currently in force as stipulated by Central and respective State Governments." "18. The contractor shall disburse the salaries to the employees in the presence of various representatives of the Assistant Director (ELNCS)".

(7) Reading of these clauses make it clear that a duty was cast on the plaintiff to pay to the employees the fair wages as notified by the Central or the State Government from time to time. Any amount paid less than the fair wages notified by the authorities, the plaintiff was liable to be prosecuted. If the increased wages, as notified by the Central Government' or the State Government, have actually been paid by the plaintiff then under law he is entitled to claim the same from the defendant Authority. In this regard, reference can be had to the decision of our own High Court in the case of M/s Rawla Construction Co. Vs. Union of India, Suit No.983- A/79 decided on 50th October , This Court while disposing of the objection in that case, observed that when the Government itself has increased the wages they are bound to pay to the contractor the increase in wages. This observation supports the contention of the plaintiff herein that he is entitled to recover the same because of the statutory increase in the labour wages. To the same extent is the observation of this Court in the case of M/s Oriental Structural Engineers Pvt.ltd. Vs. N.D.M.C., Suit No.1104-A/81 decided on 29th August,1984.

(8) Since the enhanced wages have been paid by the plaintiff, on account of the statutory increase by the Government, I see no justification in the defendant authority to raise the objection that the same cannot be reimbursed, as there is no term in the contract to reimburse the same. It has to be seen whether there is any implied contract to reimburse the increased cost on account of rise of wages. Payment of wages as per the rate fixed under the Minimum Wages Act being statutory obligation the Contractor was duty bound to pay the same irrespective of the fact whether the terms of the contract are silent about payment of minimum wages. So far as the increased payment on account of rise in the rates of minimum wages is concerned, the parties were not in any sort of agreement- express or implied to reimburse the same. However, the plaintiff paid as per these rates not in pursuance to any term of the contract but because of the mandate of the law. Clause 17 of the contract did require the plaintiff shall at all times abide by the Minimum Wages Act (underlining is mine). He would not pay less than the minimum wages fixed by the Government. This was the requirement of the contract. The plaintiff at all times was to pay the minimum wages so notified by the respective governments. He was not to pay less than the minimum wages notified. When the plaintiff gave the tender he had the minimum wages in mine which were then prevalent. These wages were increased from time to time as it is an admitted case of the parties. Since the plaintiff was required to pay wages as per the notifications issued by the Government from time to time, therefore, we have to read a meeting of mind in so far as the claim of escalated payment on ac- count of increase of wages is concerned. It has to be assumed that when the plaintiff was required to pay the wages as per the notification to be issued by the Government, the author, ty did visualise that the plaintiff would not do so by cutting down its profit. By asking the plaintiff to give tender by taking into account the wages notified at the time of inviting tenders, the authority did give an impression that wages/salary to be paid would be the one then notified. In such a situation, if the minimum wages were revised afterwards, the tendered sum cannot be taken to be an agreed amount for completing the contract. In view of Clause 17 which prescribe that plaintiff at all times would pay the wages as notified by the Government, in fact directed the plaintiff to pay wages at rates higher than those prescribed or notified at the time of inviting the tenders. In this view of the matter I am of the view that defendant authority had by necessary implication agreed to pay this increased payment

(9) In view of the facts and the legal position discussed above this issue is decided in favor of the plaintiff and against the defendant. Defendant authority is liable to reimburse the plaintiff the amount mentioned in Annexure 'A' i.e. Rs.l,38,051.00 . Issue No.2

(10) In view of the position discussed against issue No. 1 the fact which merges is that defendant Authority held up the amount on account of bonafide belief that since the agreement did not provide reimbursement, therefore, the amount was not paid. Hence, defendant is not liable to pay interest. Decree is accordingly passed for Rs.l,38,051.00 with costs in favor of the plaintiff and against the defendant authority. It is, however, made clear that if the decretal amount is paid within 15 days, the plaintiff will not be entitled to any interest, but in case the defendant fails to make the payment of the decretal amount within 15 days from the date of this judgment then the plaintiff will be entitled to interest at the rate of 12% per annum from the date of the suit till realisation.