Delhi High Court
Delhi Transport Corporation vs M/S Chirag Security & Placement ... on 30 August, 2018
$~18
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 30th August, 2018
+ O.M.P. 526/2008
DELHI TRANSPORT CORPORATION ..... Petitioner
Through: Mr. Jyotindra Kumar & Mr. A.K.
Verma, Advocates (M-8587815809).
versus
M/S CHIRAG SECURITY & PLACEMENT
SERVICES ..... Respondent
Through: Mr. Malaya Chand, Advocate (M-
9810570525).
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
I.A. 4577/2017 (Delay in filing Restoration Application)
1. This application has been filed seeking condonation of delay of 101
days in filing of I.A. 4576/2017 for restoration of the petition. For the
reasons stated in the application, the delay is condoned.
2. I.A. is allowed.
I.A. 4576/2017 (Restoration Application)
3. This is an application seeking restoration of OMP 526/2008 which
was dismissed for non-prosecution on 2nd December, 2016. For the reasons
stated in the application, OMP 526/2008 is restored.
4. I.A. is allowed.
O.M.P. 526/2008
5. The present petition has been filed under Section 34 of Arbitration
and Conciliation Act, 1996 challenging the award of the Learned Sole
Arbitrator dated 12th June, 2008.
6. The brief background is that the Respondent is an out-sourcing
agency through whom drivers were employed by DTC vide contract dated
26th August, 2005. The agreement was valid for a period of one year from
26th August, 2005. Services of drivers were being availed of by DTC and
payment was made on the basis of per kilometre rate. The DTC used to
make payments to the Agency, which was in turn paid to the drivers. The
payments for the months of February, March, April and May, 2006, were
withheld out of the sums payable to the drivers, as the Respondent had not
made the statutory payments under the Employment Provident Fund
(hereinafter „EPF‟) and Employees' State Insurance Corporation
(hereinafter „ESIC‟). The ESIC's recovery officer had issued notices to DTC
and had also attached its bank accounts, as the DTC was treated as the
principal employer of the drivers. In this view of the notice issued by ESIC
and the withholding of payments to the Respondent by DTC, disputes arose
between the parties and the matter was referred to arbitration by this Court
in O.M.P. 181/2006.
7. The impugned award dated 12th June 2008, came to be passed. As per
the award, a sum of Rs.5.61,523/- has been awarded to the
Respondent/claimant along with the security deposit of Rs.50,000/- and
interest @ 18% per annum. The operative portion of the award is as under:
"12. On the basis of the discussion and findings in
the preceding paragraphs, I allow the claim of the
Applicant M/S Chirag Security and Placement Services
(Regd.) for an amount of Rs. 561523 (Rupees five lakhs
sixty one thousand five hundred and twenty three). This
will be paid to the Claimants along with a refund of
security deposit of Rs.50 thousand. These amounts will
be paid to the Claimants by the DTC within a period of
one month of the date of this order failing which the
Claimants will be entitled to payment of interest at 18
percent on the above amount from the date of the
award till the date of actual payment."
8. The Ld. Counsel for DTC submits that the Learned Sole Arbitrator
has failed to take into consideration the fact that various sums were paid by
the DTC towards the EPF and ESI, while awarding the said amount. The
basic contention is that since the statutory dues were not deposited and were
sought to be recovered from the DTC, it is entitled to deduct the same from
the payments to be released to the Respondent. It is further submitted that
the rate of interest awarded is also on the higher side. Ld. Counsel further
submits that the amount due to the Respondent is also not admitted by DTC
and hence there was no basis for awarding the same amount.
9. On the other hand, Ld. counsel for the Respondent submits that the
Arbitrator has gone by the record and the admitted position of DTC as on
record. He pointed out to the relevant paras of the award which, according to
him, clearly show that all the requisite facts have been taken into
consideration by the Sole Arbitrator.
10. A perusal of the award shows that on each of the issues, the Learned
Arbitrator has appreciated the evidence on the record. The main claim i.e. in
respect of amount due to the Respondent for the months of February 2006,
March, 2006, April, 2006 and May, 2006, the Learned Arbitrator has relied
upon the additional affidavit filed by DTC in O.M.P.181/2006 wherein DTC
admitted that the total amount due for payment to the Respondent is
Rs.6,05,753/-. In the said affidavit, the DTC has categorically stated as
under:
"That as per the statement prepared by the respondent
(A/c Deptt) the bills pending for payment to the
petitioner is Rs.605753/- against which the ESI
contribution payment due from the petitioner is
Rs.27,257/-. Thus, the balance amount payable after
deduction of ESIC dues is Rs.5,78,496/-. The provident
fund dues payable by the petitioner is Rs.88036/-. Copy
of the statement of account is annexed and marked as
Annexure A."
The Arbitrator has relied on this particular affidavit which has been
extracted in the award and thereafter in issue no.2 calculated the exact
amounts payable to ESIC and EPF. The Arbitrator has then held that the
total sum which was to be paid by the DTC to the ESIC and EPF was
Rs.44,230/-. The Learned Arbitrator has rejected the counter claim and also
held that insofar as the dues to the drivers are concerned, the same would be
the responsibility of the Respondent and finally awarded the amounts in
favour of the Respondent.
11. The calculation made by the Arbitrator was that from the admitted
sum which was due as per DTC's affidavit i.e. Rs.6,05,753/-, the Arbitrator
deducted a sum of Rs.44,230/- i.e. towards EPF and ESI dues. Thus, the
amount due is a sum of Rs.5,61,523/- along with the security deposit, which
has been awarded. The calculations of the Arbitrator are correct as per the
record as also the notices issued by the statutory authorities. No fault can be
found insofar as these findings are concerned.
12. Ld. Counsel for the Petitioner - DTC has expressed apprehension that
the DTC has been made a party before the Labour Commissioner, where the
drivers have instituted proceedings to claim their dues and hence this Court
ought to clarify that the responsibility of payments to the made to drivers is
not that of DTC but of the Respondent.
13. On issue no.5, the Arbitrator has clarified as under:
"11. It is an admitted position on both sides that
the dues of the ESIC have already been determined and
paid by the Principal Employer namely DTC. There is
no outstanding demand on account of EPF. In so far as
any claims by the drivers are concerned, these will
become the responsibility of the Claimants in terms of
the agreement between the parties for the period
payments, on account of the outsourced drivers, are
made by the DTC."
14. From the above, it is clear that the responsibility for making the
payment to the drivers is solely of the Respondent and not of DTC. It is
clarified accordingly.
15. The interest awarded by the Arbitrator is on the higher side i.e. 18%.
The same is modified to 10% per annum from the date of award till the date
of actual payment. The payment shall be released within a period of 8 weeks
by the Petitioner - DTC to the Respondent, failing which, interest on the
total amount awarded @ 12% per annum would be liable to be paid, on the
total decretal amount till the date of actual payment.
16. O.M.P. is disposed of with these directions.
PRATHIBA M. SINGH
JUDGE
AUGUST 30, 2018
Rahul
