Gauhati High Court
M/S S H Enterprise vs The Indian Oil Corporation Ltd And 2 Ors on 6 September, 2024
Author: Sanjay Kumar Medhi
Bench: Sanjay Kumar Medhi
Page No.# 1/11
GAHC010142522023
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/3804/2023
M/S S H ENTERPRISE
A SOLE PROPRIETORSHIP OF MD. SAFIQUL HUSSAIN, SON OF LATE
HUSSAIN ALI WITH ITS REGISTERED OFFICE AT SILBHANGA, JAGIROAD,
P.O. AND P.S. JAGIROAD, DIST. MORIGAON, ASSAM, REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE MR. WAZIDUR RAHMAN, SON OF LATE
OHIDUR RAHMAN, R/O- RAJ APARTMENT, BLOCK-B, 2ND FLOOR, GMCH
ROAD, BHANGAGHAR, GUWAHATI, KAMRUP, ASSAM-781005.
VERSUS
THE INDIAN OIL CORPORATION LTD AND 2 ORS
REPRESENTED BY ITS EXECUTIVE DIRECTOR, BONGAIGAON REFINERY,
P.O. DHALIGAON, DIST. CHIRANG, ASSAM, PIN- 783385.
2:THE DEPUTY GENERAL MANAGER (CONTRACTS)
INDIAN OIL CORPORATION LTD.
BONGAIGAON REFINERY
P.O. DHALIGAON
DIST. CHIRANG
ASSAM
PIN- 783385.
3:THE SENIOR MANAGER (EMPLOYEE SERVICE)
INDIAN OIL CORPORATION LTD.
BONGAIGAON REFINERY
P.O. DHALIGAON
DIST. CHIRANG
ASSAM-783385
Advocate for the Petitioner : MS. B BHUYAN, MS R TADO,MS P PHUKAN,MR. T DEURI,MR
Page No.# 2/11
A ATREYA
Advocate for the Respondent : MR. K N CHOUDHURY (r-1,2,3), MR. D J DAS (r-1,2,3),MS N
MAHANTA (r-1,2,3),MISS. R R KAKATI (r-1,2,3)
Linked Case : WP(C)/6596/2023
M/S S H ENTERPRISE
A SOLE PROPRIETORSHIP OF MD. SAFIQUL HUSSAIN
SON OF LATE HUSSAIN ALI WITH ITS REGISTERED OFFICE AT SILBHANGA
JAGIROAD
P.O. AND P.S. JAGIROAD
DIST. MORIGAON
ASSAM
REPRESENTED BY ITS AUTHORISED REPRESENTATIVE MR. WAZIDUR
RAHMAN
SON OF LATE OHIDUR RAHMAN
R/O- RAJ APARTMENT
BLOCK-B
2ND FLOOR
GMCH ROAD
BHANGAGHAR
GUWAHATI
KAMRUP
ASSAM-781005.
VERSUS
INDIAN OIL CORPORATION LTD AND 3 ORS
REPRESENTED BY ITS EXECUTIVE DIRECTOR
BONGAIGAON REFINERY
P.O. DHALIGAON
DIST. CHIRANG
ASSAM
PIN- 783385.
2:THE GENERAL MANAGER I/C (HR)
INDIAN OIL CORPORATION LTD. BONGAIGAON REFINERY P.O DHALIGAON
DIST. CHIRANG ASSAM 783385
3:THE DEPUTY GENERAL MANAGER (CONTRACTS)
INDIAN OIL CORPORATION LTD.
BONGAIGAON REFINERY
Page No.# 3/11
P.O. DHALIGAON
DIST. CHIRANG
ASSAM
PIN- 783385.
4:THE SENIOR MANAGER (EMPLOYEE SERVICES)
INDIAN OIL CORPORATION LTD.
BONGAIGAON REFINERY
P.O. DHALIGAON
DIST. CHIRANG
ASSAM
PIN- 783385.
5:THE CHIEF MANAGER (EMS)
INDIAN OIL CORPORATION LTD.
BONGAIGAON REFINERY
P.O. DHALIGAON
DIST. CHIRANG
ASSAM
PIN- 783385.
------------
Advocate for : MR. T DEURI
Advocate for : SC
I O C appearing for INDIAN OIL CORPORATION LTD AND 3 ORS
BEFORE
Hon'ble MR. JUSTICE SANJAY KUMAR MEDHI
Advocate for the petitioner : Shri R. Sarma, Sr. Counsel
Ms. P. Phukan
Advocate for the respondents : Shri KN Choudhury, Sr. Counsel
Ms. RR Kakati
Shri A. Dasgupta, Sr. Counsel
Shri A. Das
Date of hearing : 03.09.2024
Date of Judgment : 06.09.2024
Judgment & Order
Both these writ petitions being connected, have been heard analogously and
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are disposed of by this common judgment and order. The issue pertains to a
contract for providing catering services in the Guest House of the respondent
no. 1 - Refinery at Guwahati. The grievance also involves termination of the
contract by an order dated 06.11.2023.
2. Before coming to the issue involved, it would be convenient if the basic
facts are recorded in brief.
3. Pursuant to a tender process which was made through the Government E-
Marketplace i.e., GeM Portal, the petitioner which is a sole proprietorship firm
was awarded a contract for providing catering and other services in the Guest
House and Office Complex of the respondent no. 1 - Refinery at Guwahati at a
total value of Rs.28,040,977.20/-. In terms of the said contract, certain issues
arose between the parties with regard to the handing over the kitchen of the
Guest House as well as other worksite. It is the specific case of the petitioner
that the job requires skilled workers and the petitioner was restrained from
engaging its own workers and was forced to engage workers who had worked
with the previous contractor. The petitioner had made several representation,
however no heed was paid to the same and as a result of which a stalemate
had resulted. The petitioner had therefore filed the first WP(C)/3804/2023
wherein notice was issued on 28.06.2023. However, during the pendency of the
said writ petition, the contract was terminated on 06.11.2023. Accordingly, the
second writ petition has been filed.
4. I have heard Shri R. Sarma, learned Senior Counsel assisted by Ms. P.
Phukan, learned counsel for the petitioner. Also heard Shri KN Choudhury,
learned Senior Counsel assisted by Ms. RR Kakati, learned counsel for the
respondent nos. 1 to 3 and Shri A. Dasgupta, learned Senior Counsel assisted
by Shri A. Das, learned counsel for the respondent nos. 4 - 25.
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5. Shri Sarma, the learned Senior Counsel for the petitioner has submitted
that the petitioner cannot be forced to engage workers of the previous
contractor. It is submitted that the agreement entered into by the petitioner
with the respondents stipulates that the petitioner would engage a certain
number of workers which clearly mean that the petitioner would be allowed to
engage his own persons. In this connection, he has drawn the attention of this
Court to Clause 2.2 of the agreement which deals with the contractor's scope.
As per Clause 2.2.1, the contractor shall, at his own cost engage adequate
number of workforce of various categories as per details given for carrying out
the services. The workforce had four categories, namely, highly skilled, skilled,
semi skilled and unskilled by which 27 persons were to be engaged. On
18.05.2023, the petitioner had issued a letter to hand over the kitchen and the
other worksite and a similar letter was also issued on 25.05.2023. However,
there was no response. Thereafter, on 08.06.2020, the petitioner had submitted
a list of employees with a further request to allow the petitioner to operate and
discharge his duties as per the contract. It is submitted that from the stand
taken by the respondents, it appears that an earlier agreement was there of the
Refinery with the Workers' Association. However, it has been submitted that
such agreement would not have any binding effect upon the petitioner, more so,
when the same was neither incorporated nor disclosed at the time of entering
into the agreement by the respondent Refinery with the petitioner.
6. The learned Senior Counsel for the petitioner has referred to the
Memorandum of Settlement brought on record by the respondents. It is
submitted that such Settlement cannot have any bearing or relevancy with the
nature of engagements to be done by the petitioner so far as the 27 nos. of
staff are concerned. It is submitted that the petitioner had made huge
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investment and because of the impugned action, the petitioner is made to suffer
immensely.
7. As regards the impugned order of termination dated 06.11.2023, it is
submitted that the said order has been passed without affording reasonable
opportunity to the petitioner. It is also submitted that though certain reasons
have been cited, none of those reasons are even applicable to the facts and
circumstances of the case. It is submitted that the issue is not in relation to
failure to make payment of labour wages or resuming the job. It is also not a
case of unsatisfactory performance or delay in payment of wages. It is
submitted that the stalemate was caused by the unreasonable action of the
respondent authorities for which the petitioner cannot be faulted with.
8. On the aspect of the maintainability of the writ petition, the learned Senior
Counsel for the petitioner has placed reliance upon the cases of MP Power
Management Company Limited, Jabalpur Vs. SKY Power Southeast
Solar India Private Limited and Ors. reported in (2023) 2 SCC 703 and
ABL Industrial Ltd. and Anr. Vs. Export Credit Guarantee Corporation
of India Ltd. and Ors. reported in (2004) 3 SCC 553. In the subsequent
decision of MP Power (supra), the Hon'ble Supreme Court has relied upon a
host of previous decisions including the case of ABL Industries (supra). It is
submitted that the respondent authorities being an instrumentality of the State
is bound by Article 14 of the Constitution of India to act fairly, justly and
reasonably. He accordingly submits that the impugned order of termination of
the contract be set aside.
9. Per contra, Shri K. N. Choudhury, learned Senior Counsel for the
respondent-Refinery has submitted that on 01.05.2023, the petitioner had
started operating the canteen which was done for a month and on 08.06.2023,
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a new list of workers was given by the petitioner. Regarding the submission that
the contractor can engage his own men, he has submitted that if there is a
change in the existing workers, the same will lead to an industrial unrest which
would not be in the interest of justice. By referring to the affidavit-in-reply filed
on 17.07.2024, the learned Senior Counsel has submitted that there is a binding
settlement between the Refinery authorities and the contract laborers, as per
which the such laborers are given certain safeguards. He has also emphasized
that there is no clause in the contract agreement with the petitioner which
would enable the contractor to have his own men. He has submitted that the
settlement between the Workers' Coordination Committee and the Refinery
which contains several clauses which are mainly to ensure safeguarding the
interest of the contract laborers. He submits that in absence of an enabling
clause which gives the right to the contractor to engage his own men, the
decision to have the earlier set of workers to continue cannot be termed as
arbitrary or unreasonable and therefore he submits that there is no merit in the
writ petition which is liable to be dismissed. As regards the nature of the job, it
is submitted that the same is of essential nature involving catering and other
services and in the order dated 04.01.2024 passed in IA(C)/3824/2023, the
Refinery authorities were given the liberty to make alternative arrangements.
10. Endorsing the submission made on behalf of the Refinery, Shri A.
Dasgupta, learned Senior Counsel for the respondent nos. 4 to 25, who has
been newly impleaded in WP(C)/3804/2023 vide order dated 10.11.2023 passed
in IA(C)/2649/2023, has submitted that the stand taken by the Refinery is just
and proper. By representing the earlier set of workers, the learned Senior
Counsel has submitted that even on earlier occasions, irrespective of change of
the contractor, the workmen were not changed. He has also referred to the
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provisions of the Industrial Disputes Act, more particularly, Sections 2(p) and 18
which relate to Settlement. It is submitted that the Settlement arrived at by the
workers Union and the Refinery will have binding effect and therefore the
respondent nos. 4 to 25 have a right to continue irrespective of the change of
the contractor.
11. The rival submissions have been duly considered and the materials placed
before this Court have been carefully examined.
12. The lis involves the scope of the work as a caterer in the Guest House of
the Refinery at Guwahati. The work order was issued on 29.03.2023 which has
been carefully perused. This Court has also examined the other materials which
relate to the relationship between the Refinery and the petitioner.
13. Clause 2.2 of the agreement deals with the Contractor's Scope, as per
which the contractor was to engage adequate number of workers. The aforesaid
scope of work cannot be construed to put a fetter on the contractor to engage
the previous workers of the previous contractor. The transaction involved is of
commercial nature wherein the bids are offered after making certain calculation
which would include the nature and scope of engaging workers in a strategic
manner. While exploitation of any nature of the worker will not be permitted in
any case and the contractor would be bound by the provisions of law to ensure
that they are given their due, the same cannot be stretched to the extent of
curtailing his rights so far as the engagements of a particular set of workers are
concerned.
14. This Court has carefully looked and re-looked at the Settlement which is in
existence between the Workers Committee and the Refinery. While the various
clauses ensure that the rights and interest of the contract labourers are secured
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by payment of the prescribed rates, medical allowance and other benefits, the
same does not have any clause which would ensure their continuity when there
is a change of the contractor. In absence of any such clause, this Court finds it
absolutely difficult to impose upon a third party of a condition which would have
a direct impact on the manner of discharge of his functions in terms of the
contract. This Court is also of the opinion that even assuming that such a clause
existed in the Settlement, the contract with the petitioner is of subsequent date
and unless the said contract contains a clause of restriction and specifying a
particular manner for engaging workers in terms of the Settlement, such a
condition cannot be imposed upon the petitioner.
15. As regards reliance upon Section 18 of the Industrial Disputes Act is
concerned, in the opinion of this Court, the Settlement, as envisaged by Section
18 will have no manner of application, more so, when the Settlement in
question does not contain any such clause of continuity. This Court has noticed
that the Settlement is of the year 2011 followed by two other Settlements
whereas the contract in question is of a subsequent period, namely, of the year
2023. As regards the arguments sought to be advanced on behalf of the
Refinery that the agreement, in implied terms had the aforesaid clause, this
Court is unable to accept the said submission. This Court has also noticed that
the kick off meeting which has been referred to by the learned Senior Counsel
for the Refinery was even before handing over and therefore the eventuality had
started only after such handing over when the petitioner had made repeated
representation for allotting the worksite and also to approve the list of workers
submitted by him. So far as the argument made by Shri Dasgupta, learned
Senior Counsel is concerned, the mere fact that the earlier contractor had
chosen to retain the existing worker cannot not be held to be binding upon the
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petitioner, who is the new contractor and has been allotted the work in
accordance with law.
16. As regards the question of maintainability is concerned, no serious issues
were raised on behalf of the respondents. In any case, the Hon'ble Supreme
Court in the case of MP Power (supra) has made the position clear. By
referring to the catena of earlier judgments including the case of ABL
International (supra), the following has laid down-
"67. ABL (supra) marks a milestone, as it were, in the matter of the
superior court interfering in contractual matters where the State is a
player even after the contract is entered into. A petition was filed
under Article 226 wherein the respondent which was incorporated
under the Companies Act repudiated an insurance claim made by the
appellant-writ petitioner. This Court undertook an elaborate discussion
of the earlier case law. We find that this Court dealt with several
obstacles which were sought to be posed by the respondent. They
included disputed questions of facts being involved, availability of
alternate remedy, and the case involving entertaining a money claim.
This court went on to hold as follows:
"27. From the above discussion of ours, the following legal principles
emerge as to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or an
instrumentality of a State arising out of a contractual obligation is
maintainable.
(b) Merely because some disputed questions of fact arise for
consideration, same cannot be a ground to refuse to entertain a writ
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petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary claim is
also maintainable."
17. In view of the aforesaid facts and circumstances, this Court is of the
opinion that a case for interference is made out. Accordingly, the termination
order dated 06.11.2023 is interfered with. Consequently, the respondent-
Refinery is directed to allow the petitioner to complete the contractual liabilities
in terms of the work order dated 29.03.2023. It is also made clear that the
respondent-Refinery cannot restrain the petitioner from engaging its own men
for discharge of the duties.
18. Since the contract was for two years and because of the issue involved,
the petitioner could not discharge the same, the petitioner would have the
liberty to file application for allowing to discharge the functions for the full term
and in case such application is made, the same would be considered by the
respondent-Refinery in accordance with law and by passing of a speaking order.
19. Both these writ petitions accordingly stand allowed.
JUDGE
Comparing Assistant
