Delhi High Court
Delhi Transport Corporation vs M/S Neel Kanth Placement Services ... on 15 November, 2018
$~32
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 15th November, 2018
+ O.M.P. 500/2008
DELHI TRANSPORT CORPORATION ..... Petitioner
Through: Mr. Jyotindra Kumar, Advocate.
(M:9971588963)
versus
M/S NEEL KANTH PLACEMENT SERVICES
(REGD.) ..... Respondent
Through: None.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
I.A. 4581/2017 (Delay in filing Restoration Application)
1. This application has been filed seeking condonation of delay of 101
days in filing of I.A. 4580/2017 for restoration of the petition. For the
reasons stated in the application, the delay is condoned.
2. I.A. is allowed.
I.A. 4580/2017 (Restoration Application)
3. This is an application seeking restoration of OMP 500/2008 which
was dismissed for non-prosecution on 2nd December, 2016. For the reasons
stated in the application, OMP 500/2008 is restored.
4. I.A. is allowed.
O.M.P. 500/2008
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 6th June, 2008, except to the extent of award passed qua
Issue No. 2 therein. Thus, the DTC does not raise a challenge in respect of
amounts awarded by the Arbitrator under Issue No.2. However, the amounts
payable on the whole is under challenge.
6. The brief background is that the Respondent is an out sourcing agency
through whom drivers were employed by DTC vide contract dated 28th
April, 2004. The agreement was valid for a period of one year from 28th
April, 2004. Services of drivers were being availed of by DTC and payment
was made on the basis of per kilometre rate. The payments for the months of
February, March, April and May, 2006, were withheld out of the sums
payable to the drivers through the Respondent, 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 view of the notices issued by ESIC and
EPF, the DTC had made the payments to the said authorities. The amounts
paid to the authorities were withheld by the DTC, from the payments
payable to the Respondent. In view of the withholding of payments to the
Respondent by DTC, disputes arose between the parties and the matter was
referred to arbitration.
7. The agreement was valid for a period of one year from 28th April,
2004 and were thereafter renewed on an annual basis. Services of drivers
were being availed of by DTC and payment was made on the basis of per
kilometre rate. It is the case of the contractor that the payments for the
months of February, March, April and May, 2006 were illegally withheld by
DTC out of the sums payable to the drivers. The learned Sole Arbitrator vide
the impugned award dated 6th June, 2008 awarded sums to the Respondent,
after deducting the sum payable to the ESIC and EPF, awarded a total sum
of Rs.18,75,370 /-. Learned counsel for DTC does not dispute the fact that
the total claimed amount was Rs.47,82,826/- and insofar as this amount is
concerned, there is no doubt as the same is evident from a document filed by
DTC in OMP 499/2008. However, the payments made by DTC to the
EPF/ESIC authorities were liable to be deducted. Thus, the Ld. Sole
Arbitrator held that the total sum due to ESIC/EPF dues was Rs.29,07,096/-.
After deducting the said amount, the remaining amount has been awarded to
the contractor as per issue No.3 i.e. a sum of Rs.18,75,370/-. No objection is
raised or pressed in respect of this amount awarded.
8. The Arbitrator, further allowed DTC to retain a sum of Rs.2,89,361/-
towards any penalty which may be levied by the EPF authorities for non
payment of the EPF dues. 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. Insofar as the amount
withheld towards possible penalty by the EPF authorities, it appears that the
penalty amount has been awarded twice by the arbitrator, once as part of the
EPF dues and again as part of the balance payable by the Respondent. This
is a duplication which deserves to be corrected. Thus, the amount of
Rs.2,89,361/- is liable to be reduced from the sum allowed to be retained by
the DTC. If any penalty is imposed by EPF authorities, DTC is entitled to
recover the same from the Respondent.
9. Learned counsel for the Petitioner submits that as per Issue No.4, the
learned Arbitrator has not clarified that the liability, if any, towards the
drivers before the Labour Commissioner is of the contractor and not of
DTC. It is, seen that this Court on 31st August, 2018 has already passed
similar orders clarifying that the liabilities, if any, before the Deputy Labour
Commissioner in the proceedings filed by the drivers would only be that of
the contractor and DTC would not be liable for the dues of the drivers. It is
accordingly clarified that the liability of the dues of drivers before the
Labour commissioner shall be that of the Respondent-Contractor and not
that of the DTC.
10. The last submission of learned counsel for DTC is in respect of the
interest. In the connected similar matters, this Court has already reduced the
interest from 18% to 10% per annum from the date of award till the date of
payment. The same shall be applicable even in the present case. 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.
11. With these modifications, the O.M.P. is disposed of.
PRATHIBA M. SINGH
JUDGE
NOVEMBER 15, 2018
Rekha
