REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9127 OF 2019 (Arising from SLP(C) No.21970 of 2019)

Food Corporation of India …Appellant

Versus

Pratap Kundu …Respondent

WITH

CIVIL APPEAL NO.9128 OF 2019 (Arising from SLP(C) No.28248 of 2019)

                       @ Diary No.35242/2019

Pratap Kundu …Appellant

Versus

Food Corporation of India …Respondent

J U D G M E N T

M.R. SHAH, J.

Delay condoned.  Leave granted.

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2. Both these appeals which, as such, can be said to be cross

appeals  arise  out  of the impugned judgment  and order  dated

12.04.2019 passed by the High Court of Calcutta in F.M.A. No.

1168 of 2017, filed by the original appellants – Food Corporation

of India and others.

3. The facts leading to the present appeals in nutshell are as

under:

By judgment and order dated 23.06.1998, the Calcutta High

Court in  Writ  Petition  No.  1491 of  1997  filed  by the  contract

casual labourers supplied by an earlier contractor for the Bikna

Depot directed that the contract casual labourers would be

entitled to payment of wages equivalent to Class IV employees.

The appeal filed by the Food Corporation of India (for short ‘FCI’)

came to be dismissed by the Division Bench of the High Court on

16.07.1998.  The judgment  and order  passed  by the  Division

Bench of the High Court dated 16.07.1998 was challenged by the

FCI before this Court by way of Civil Appeal Nos. 6064­6065 of

1998.  That on 16.12.1999 after the earlier contract period came

to an end, the appellant – FCI floated tender for appointment of

Handling and Transport  Contractor for the Bikna Depot.  The

respondent – contractor submitted his tender in which he quoted

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471% above the schedule of rates fixed in the tender.  Appendix

VIII of the tender provided the schedule of rates for the contract

and printed rates were provided on all items.   The tenderer was

required to quote rates above the schedule rates provided in the

contract.  Item No. 24 was for supply of casual labour.  That the

aforesaid Civil Appeals arising out of special leave petitions were

pending before this Court so far as Item No. 24 which was for

supply of casual labour and therefore it was stated in the tender

that  “relevant rate of  wages  is to be paid and such rate shall

abide by the decision of pending  SLP as filed  by  FCI in the

Hon’ble  Supreme  Court”.  That  by judgment  and  order  dated

28.09.2000, this Court dismissed the aforesaid Civil Appeal Nos.

6064­6065 of 1998 upholding the judgment of the Division

Bench of the High Court dated 16.07.1998.   That vide

communication dated 17.01.2000, tender of the respondent was

accepted and he was appointed as Handling and Transport

Contractor for  a  period  of two years  at the  negotiated  rate  of

471% ASOR (above the schedule rates).   That the original

contract was meant for a period of two years, i.e., up to

16.01.2002.   That after the original contract was over, the

respondent­contractor submitted a bill dated 19.07.2002

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claiming  ASOR  of 471% on the amount paid to the contract

casual labourers.   In the meantime, one contempt petition was

filed before the High Court alleging non­compliance of the earlier

judgment and order passed by the learned Single Judge,

confirmed up to this Court. The High Court vide judgment and

order dated 04.04.2003 convicted the officers of the FCI for

contempt of court and sentenced them to undergo three months

imprisonment and fine for violation of the orders for non­

payment to the contract casual labour.  The order passed by the

High Court in the contempt petition was the subject matter

before this Court in Civil Appeal Nos. 9472­9473 of 2003.   This

Court stayed the further proceedings before the High Court.  That

the  demand of the  contractor  claiming ASOR of  471% on  the

amount paid to the contract casual labourers was rejected by the

FCI.  The contractor filed Writ Petition No. 7790 of 2004 seeking,

inter alia, additional amount for payment of the contract casual

labourers.  By judgment and order dated 14.01.2010, this Court

disposed of Civil Appeal Nos. 9472­9473 of 2003 and directed the

FCI to make payment of wages to the workmen in Scale­II,  as

revised from time to time, and also directed that the arrears and

wages should be directly paid to the workmen and legal

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representatives of the workers without involving any contractor

or other agency.  It  was also directed that once the payments

were made, the sentence awarded would stand set aside. That

thereafter contempt petition Nos. 56­57 of 2011 were filed by the

contract casual labourers alleging non­compliance of order dated

14.01.2010 passed in Civil Appeal Nos. 9472­9473 of 2003

passed by this Court.   The same came to be dismissed by this

Court by order dated 04.07.2011.  That in Writ Petition No. 7790

of 2004 filed by the contractor, the High Court vide order dated

08.12.2011 directed the  CMD of  FCI to  pass  a reasoned and

speaking order on the grievance raised by the contractor.   The

CMD of FCI passed a detailed speaking order dated 15.03.2012

holding, inter alia, that the contractor was not entitled to claim

raised by him regarding 471% of ASOR on the wages actually

paid to the casual labour because the claim was contrary to the

contract between the parties.   The contractor amended the

aforesaid petition.   In  the aforesaid amended writ  petition No.

7790 of 2004, the contractor prayed for the following reliefs:

“b) A writ in the nature of Mandamus commanding the respondents and their men and agents to make payment A.S.O.R as  per the  bill submitted  by the  petitioner in terms of  Clause  24 of the tender  at the rate  of  471% A.S.O.R. above the Schedule Rate immediately being

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Annexure “P­4” and “P­11” to this writ petition and further commanding the respondents to delete the liability as fixed up upon the petitioner towards payment of E.P.F., Administrative Charges and Income Tax liability by the District Manager, Food Corporation of India, Bankura vide his letter dated 24.04.2004 and the statement annexed thereto being Annexure “P­10” to the writ petition.”

3.1. That the learned Single Judge of the High Court, by

judgment and order dated 12.04.2016, allowed the aforesaid Writ

Petition No. 7790 of 2004 and quashed and set aside the

speaking order dated 15.03.2012 passed by the CMD, FCI and

directed the  CMD  to  verify the  bill and  make  payment  of the

unpaid dues with liberty to deduct the payment already made.

3.2 Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the learned Single Judge, the FCI

preferred  appeal before the  Division  Bench  of the  High  Court

being MAT No. 1151 of 2016/F.M.A. 1168 of 2017.  That by the

impugned judgment and order, the High Court has disposed of

the appeal with the following directions:

“(a) the appellant will furnish details to the Chairman of how the Supreme Court judgment and order dated 14th

January,  2010 was  applied to fix the  differential  daily rate of casual labourers between  Rs.308.85/­  per  day and Rs.353.19/­ per day between January and March, 2000 and October to  December,  2001 respectively  and

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the differential rate for the subsequent period up to July, 2004.

(b) the Chairman shall also determine the exact amount of wages that was payable, applying the above Supreme Court judgment the amount that was actually paid by the appellant directly to the labourers and the wages outstanding, if any.   According to the said Supreme Court judgment, such outstanding wages is to be paid directly to the workers/their heirs.

In fact, the said judgment of the Supreme Court dated 14th  January, 2010 has left open other issues to be determined.

One such issue is the  amount representing the  profit receivable by the respondent.

The Chairman will determine the profit to be earned by the respondent out of this contract, in accordance with law.

He shall make the determination with intelligible reasons within four months of communication of this order, upon hearing the parties.

If any amount is determined by the Chairman to be payable to the respondent the same shall be released by the appellant to him within 8 weeks of making the determination.”

3.3 Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the High Court, both the FCI as

well as the contractor have preferred the present appeals.

4. Shri  N.K. Kaul, learned Senior Advocate has appeared on

behalf of the FCI and Mrs. Meenakshi Arora, learned Senior

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Advocate has appeared on behalf of the Contractor in respective

appeals.

4.1 Shri N.K. Kaul, learned Senior Advocate appearing on behalf

of the FCI has vehemently submitted that as such the High Court

in the impugned judgment and order has clearly given a finding

that after the judgment of this Court dated 14.01.2010, the rate

of wages payable to the labourers under the said contract would

be according to the rate specified in that judgment and not on

471% ASOR basis, still the High Court has dismissed the appeal

and has directed the CMD to calculate the amount of wages.

4.2 It is further  submitted by Shri  N.K.  Kaul, learned Senior

Advocate appearing on behalf of the FCI that it is required to be

noted that the contract specifically provided that the rate quoted

by the contractor and agreed to between the parties of 471% was

above the schedule of rates provided in Appendix VIII of the

contract.   It is submitted that Appendix VIII clearly shows that

such a schedule of rate was only provided regarding Item Nos. 1

to 23 and 25 of the Appendix.   It is submitted against Item No.

24, which was with respect to supply of casual labourers, it was

specifically provided that “Relevant rate of wages is to be paid and

such rate shall abide by the decision of pending SLP as filed by

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the FCI in the Hon’ble Supreme Court”.  It is submitted that there

was no schedule of rate for Item No. 24 which was for supply of

casual labour and therefore the claim of 471% above schedule of

rates  (ASOR) has no application to the quotation pertaining to

supply of casual labour.

4.3 It is further  submitted by Shri  N.K.  Kaul, learned Senior

Advocate appearing on behalf of the FCI that the High Court has

failed to consider the fact that after the order  passed  by the

Supreme Court dated 14.01.2010, a contempt petition was filed

which came to be dismissed by this Court on 4.7.2011 as the

order passed by this Court was complied with.   It is submitted

that therefore the High Court has materially erred in passing the

impugned judgment  and order,  more  particularly  directing the

CMD to re­calculate the wages.

4.4 It is further  submitted by Shri  N.K.  Kaul, learned Senior

Advocate appearing on behalf of the FCI that the High Court has

materially erred in directing the Chairman to determine the profit

to be earned by the contractor out of his contract.  It is submitted

that while passing such a direction, the High Court has not

properly appreciated  and considered the  order  passed  by this

Court dated 14.01.2010.  It is submitted that in the order dated

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14.01.2010 passed by this Court, this Court never kept an issue

left open, more particularly with respect to profit received by the

contractor.   It is  submitted  that therefore the High Court  has

clearly erred in directing the CMD to determine the profit to be

earned by the contractor.

4.5 It is further  submitted by Shri  N.K.  Kaul, learned Senior

Advocate appearing on behalf of the FCI that, in fact, the

contractor paid the wages @ Rs.106.38/­ per day and if his

enhanced claim of 471% ASOR on the wages paid to the casual

labour is accepted, in that case, there would be unjust

enrichment to the contractor.  It is submitted that the additional

claim of the contractor for Item No. 24 is Rs. 5,34,41,520/­.  It is

almost three times the amount due to him under the contract.  It

is submitted that in any case this Court having decided the rate

of  wages to be paid to the casual labour and in view  of the

direction to pay the same directly to the labour  without any

intermediary, there was no question of payment of any further

amount as per the additional claim made by the contractor of

471% ASOR on the wages paid to the casual labour.

5. Ms. Meenakshi Arora, learned Senior Advocate appearing on

behalf of the contractor has vehemently submitted that as such

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the  Division  Bench  of the  High  Court  has  materially erred in

referring the matter back to the Chairman of the FCI to decide

certain issues and even consider to determine the profit

receivable by the contractor.   It  is submitted that referring the

matter back to the Chairman of the FCI would be nothing but a

futile exercise of power by the Chairman, who has already

rejected the claim of the contractor by its order dated 15.03.2012.

5.1 It is further submitted  by  Ms.  Meenakshi  Arora, learned

Senior Advocate appearing on behalf of the contractor that even

otherwise the Division Bench of  the High Court has materially

erred in interfering with the decision of the learned Single Judge

in which the learned Single Judge rightly held that Clause 24 of

the  agreement  of  wages  of the  casual labourers is covered  by

471% of ASOR, which the FCI was obliged to pay to the

contractor as per the terms of the agreement.

5.2 It is further submitted  by  Ms.  Meenakshi  Arora, learned

Senior Advocate appearing on behalf  of the contractor that,  as

such, both the parties were bound by the terms and conditions of

the agreement and therefore when the contractor submitted the

tender with 471% ASOR and the same was accepted, the

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contractor shall be entitled to 471% ASOR on every item

including the supply of the casual labourers.

5.3 It is further submitted  by  Ms.  Meenakshi  Arora, learned

Senior Advocate appearing on behalf  of the contractor that,  as

such, the  contractor  had to  pay  provident fund etc.  over  and

above the wages to be paid and therefore the same was required

to be compensated by the FCI.  It is submitted therefore that the

FCI authorities are obliged to pay ASOR at the tune of 471% for

supply of casual labourers, as categorically laid down in the

agreement.

5.4 It is further submitted  by  Ms.  Meenakshi  Arora, learned

Senior Advocate appearing on behalf of the contractor that even

according to FCI the contractor shall be entitled to 471% ASOR

with respect to Item Nos. 1 to 23 and 25.   It is submitted that

therefore there is  no question of  not  paying  471% ASOR with

respect to supply of casual labourers.   It is submitted therefore

that the  demand of the  contractor  making the  claim of  471%

ASOR with respect of supply of casual labourers is absolutely just

and proper and as per the agreement between the parties, which

the learned  Single Judge rightly appreciated.   It is submitted

therefore that the Division Bench of the High Court has materially

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erred in interfering with the judgment and order passed by the

learned Single Judge which was absolutely in consonance with

the terms and conditions of the agreement.

6. We have heard the learned counsel for the respective parties

at length.

At the outset, it is required to be noted that the controversy

centres around the interpretation of Clause 24 of the agreement

and  the  dispute is  whether the  contractor is  entitled  to  471%

ASOR in respect of all items including item No. 24 for supply of

casual labourers?  It is required  to  be noted  that the  original

contract period was from 18.01.2000 to 17.01.2002 and it was

extended till 13.07.2004.   It is also required to be noted that at

the time when the contract between the FCI and the contractor

was entered into, there was already a dispute pending with

respect to the rate of wages to be paid to the casual labourers.

Therefore, so far as Item No.24 for supply of casual labourers is

concerned, it was provided that “relevant rate of wages is to be

paid and such rate shall abide by the decision of pending SLP as

filed by the FCI in the Hon’ble Supreme Court”.  It is also required

to  be noted that in  Appendix VIII  with respect to other items,

namely item nos. 1 to 23 and 25, specific rates were mentioned,

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however, with respect to Item No. 24 – supply of casual labourers,

it was blank and with respect to Item No. 24, it was specifically

provided that the  wages to be paid to the casual labourers shall

abide by the decision of the pending SLP.  The contractor paid the

wages to the casual labourers at the rate of Rs.106.38 per day.

The first SLP came to be dismissed by this Court on March 29,

2004.   However, still the dispute continued.   Contempt

proceedings were initiated which ultimately reached this Court by

way of Civil Appeal Nos. 9472­9473 of 2003.   Civil Appeal Nos.

9472­9473 of 2003 came to be finally disposed of by this Court

on 14.01.2010 and it was directed that the FCI shall fix the pay of

the casual labourers as also of the deceased workers, who were

petitioners in the first or second case filed in the High Court, in

Scale­II, as revised from time to time (as on 1.1.1997, the scale

was Rs.4320­7330).   This Court also directed that all the

payments shall be made to the workers and legal representatives

of the deceased workers directly without involving any contractor

and other agency.   Therefore, the dispute with respect to wages

came to be finally settled/disposed of by this Court by its order

dated 14.01.2010 passed in Civil Appeal Nos. 9472­9473 of 2003.

Therefore, the casual labourers were entitled to the wages as per

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the  final  order passed by this Court dated 14.01.2010  in Civil

Appeal Nos. 9472­9473 of 2003, and as per the terms and

conditions of the contract, more particularly with respect to Item

No. 24 the wages were required to be paid as per the

determination in the pending SLP, i.e.,  Civil Appeal Nos. 9472­

9473 of 2003.

6.1 At this stage, it is also required to be noted that even

subsequently the workers filed contempt petition before this

Court which came to be dismissed as this  Court was of the

opinion that order dated 14.01.2010 passed in Civil Appeal Nos.

9472­9473 of 2003 has been complied with. That thereafter the

contractor made the claim claiming 471% ASOR with respect to

supply of casual labourers at 471% ASOR as per the claim the

contractor claimed  between  Rs.607.43 to  Rs.1225.19  per day.

The  FCI determined and  paid the  wages as per the direction

issued by this Court in the order dated 14.01.2010 ranging

between Rs. 308.85 to 391.35 per day.   The statement with

respect to claim made by the contractor and the amount paid to

the casual labourers as determined and paid by the FCI  is  as

under:

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Period Bill raised by Pratap Kundu, HTC & paid by FCI (per day/Casual Labourer

Now being Claimed by Contractor Pratap Kundu @ 471% on wages raised

Amount paid to Casual Labourers for the contract period of Pratap Kundu (18.01.2000 to 13.07.2004) after order dated 14.01.2010 of Hon’ble Supreme Court in SLP No. 9472­9473 of 2003 filed by FCI v. Bijoy Kumar Singh & Ors.

Jan­Mar, 00 Rs.106.38 Rs. 607.43 Rs.308.85 Apr­May,00 Rs.106.38 Rs. 607.43 Rs.306.31 June, 2000 Rs.106.38 Rs.607.43 Rs.317.42 July­Sept, 00 Rs.106.38 Rs.607.43 Rs.321.46 Oct­Dec.,00 Rs.106.38 Rs.607.43 Rs.325.31 Jan­Mar, 01 Rs.106.38 Rs.607.43 Rs.333.88 Apr­Jun, 01 Rs.106.38 Rs.607.43 Rs.331.92 Jun­Sept, 01 Rs.106.38 Rs.607.43 Rs.334.08 Oct­Dec, 01 Rs.106.38 Rs.607.43 Rs.343.00 Jan­Mar, 02 Rs.106.38 Rs.607.43 Rs.353.19 Apr­Jun, 02 Rs.106.38 Rs.607.43 Rs.352.54 July­Sept.,02 Rs.106.38 Rs. 607.43 Rs.353.85 Oct­Dec.,02 Rs.106.38 Rs.607.43 Rs.360.73 Jan­Mar, 03 Rs.106.38 Rs.607.43 Rs.372.23 Apr­Jun, 03 Rs.206.73 Rs.1180.42 Rs.369.96 Jul­Sept, 03 Rs.209.96 Rs.1198.87 Rs.374.96 Oct­Dec, 03 Rs.213.23 Rs.1217.54 Rs.379.96 Jan­Mar, 04 Rs.214.58 Rs.1225.25 Rs.389.23 Apr­Jun, 04 Rs.214.57 Rs.1225.19 Rs.390.19 July, 04 Rs.214.57 Rs.1225.19 Rs.391.35   

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The aforesaid claim has been rejected by the Chairman of the FCI

and according to us the same was rightly rejected by the

Chairman as the wages to the casual labourers were required to

be determined and paid as per the order passed by this Court

dated 14.01.2010 in Civil Appeal Nos. 9472­9473/2003.

Therefore,  as such, the  Division Bench of the  High Court  has

rightly observed and held that after this Court’s  judgment and

order dated 14.01.2010, the rate of wages payable to the

labourers under the subject contract would be according to the

rate specified in that judgment and not on 471% ASOR basis.  We

are in complete agreement with the said finding recorded by the

Division Bench.   Therefore, it is observed and held that the

contractor shall  not be entitled to the wages to be paid to the

casual labourers on 471% ASOR basis and the wages to be paid

to the labourers would be at the rate specified in the order dated

14.01.2010 in Civil Appeal Nos. 9472­9473/2003.   However, the

Division Bench of the High Court was of the opinion that there is

no clarity how judgment and order dated 14.01.2010 has been

applied by the FCI to calculate the wages of the casual labourers,

therefore, the Division Bench of the High Court has referred the

matter  back to the  Chairman of the  FCI to  consider  how  the

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differential rate of casual labourers between Rs. 308.85/­ per day

and Rs.353.19/­ per day between January and March, 2000 and

October to December, 2001 respectively and the differential rate

for the subsequent period up to July, 2004 has been determined

and the Chairman is directed to determine the exact amount of

wages that was payable, applying the judgment and order passed

by this Court dated 14.01.2010 in Civil Appeal Nos. 9472­

9473/2003.  

6.2 So far as the direction issued by the Division Bench of the

High Court directing the Chairman to determine the profit earned

by the contractor out of his contract is concerned, the same is not

sustainable at all.  The Division Bench of the High Court  has

observed that the judgment and order of this Court dated

14.01.2010 has left open other issues to be determined.   We do

not find anything in the order dated 14.01.2010.  On bare reading

of the order dated 14.01.2010 there does not appear to be left

open  other issues to  be  determined,  as  observed  by the  High

Court in the impugned judgment and order.   Under the

circumstances, that part of the direction issued by the Division

Bench directing the Chairman to determine the profit earned by

the contractor deserves to be quashed and set aside.

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7. In view of the above and for the reasons stated above, the

appeal filed by the FCI being Civil Appeal arising from SLP (C) No.

21970 of 2019 is hereby partly allowed.   It is observed and held

that the casual labourers shall be entitled to the wages according

to the rates specified in the order dated 14.01.2010 passed by

this Court in Civil Appeal Nos. 9472­9473/2003 and the

contractor shall not be entitled to 471% ASOR basis with respect

to supply of casual labourers as claimed by him.  Therefore, it is

specifically observed and held that the FCI shall be liable to pay

the wages payable to the casual labourers  under the subject

contract  according to the rates specified in the judgment  and

order dated 14.01.2010 passed by this Court in Civil Appeal Nos.

9472­9473/2003 and not on 471% ASOR basis.  It goes without

saying that the contractor shall be entitled to reimburse the

wages paid by him, i.e., Rs.106.38 per labourer, if the same is not

reimbursed/paid to the contractor.   Therefore, remand to the

Chairman of the FCI shall be restricted to the determination of

the  wages  as  per the judgment and  order  dated  14.01.20120

passed by this Court in Civil Appeal Nos. 9472­9473/2003, more

particularly  as  contained in  paragraph a  & b  of the  operative

portion of the impugned order.   However, that part of the

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direction issued by the Division Bench in the operative portion of

the order by which the Chairman  is  directed to determine the

profit earned by the contractor, the same is hereby quashed and

set aside.   The appeal preferred by the FCI is partly allowed in

terms of the above.   Consequently, the appeal preferred by the

contractor being Civil Appeal arising out of Diary No. 35242/2019

stands dismissed.  There shall be no order as to costs.

…………………………………J. [ASHOK BHUSHAN]

NEW DELHI; …………………………………J. NOVEMBER 29, 2019. [M.R. SHAH]

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