JUDGMENT

Aftab Alam, J.

1. Leave granted.

2. This appeal, at the instance of Union of India, arises from an arbitration award dated September 9, 2000 made in favour of the respondent. The appellant challenged the award before the Calcutta High Court by filing an application under section 34 of the Arbitration and Conciliation Act, 1996. A learned Single Judge of the High Court upheld the challenge substantially and by judgment and order dated November 20, 2001 passed in G.A.No.87/01, arising out of AP No.325/98, sustained the award only on one issue and set it aside on two of the three issues under reference. Against the judgment of the Single Judge the respondent preferred an internal court appeal and the Division Bench of the High Court by its judgment and order dated July 4, 2006 passed in G.A.No.87/01: APOT No.792/01 with APO No.362/01 allowed the appeal, set aside the judgment of the Single Judge and fully restored the arbitrator’s award in favour of the respondent on all the three issues in dispute. Against the judgment of the Division Bench of the High Court the appellant has come in appeal to this Court.

3. The facts of the case are brief and simple and may be stated thus. For the work of “handling of goods, parcels and booked luggage” at a group of six stations falling in its Nagpur Division, the South Eastern Railway, Calcutta, invited tenders that were opened on May 16, 1990. The tender submitted by the respondent was the lowest. Hence, after some negotiations and extension of the validity of offer the respondent’s tender was accepted on August 2, 1991 and it was given the work for a period of three years commencing from August 3, 1991. The grant of the contract was formalized in an agreement executed by the parties on December 3, 1991. The agreement was deemed to have come into force with effect from August 3, 1991 and it was to remain in force for a period of three years, till August 2, 1994 unless determined by either of the parties in terms of clause 1(1) (authorizing the appellant to determine the contract by giving three months notice) and its proviso (giving the same right to the contractor, after expiry of the period of one year of the contract). Clause 2 of the agreement dealt with the nature of the work the contractor was required to do. Clause 4 of the agreement along with a detailed schedule mentioned fixed rates for every piece of work covered by the contract. Clause 7 stated that the contractor would not be entitled to any increase in the accepted rates of remuneration or compensation due to fluctuations in the traffic (increase or decrease) due to any reason. Under clause 13 the contractor indemnified the Railway Administration against all claims that might be made under the Workmen’s Compensation Act, 1923 in consequence of any accident or injury sustained by any labourer/servant or person in his employment and engaged in the performance of the contract. Clause 14 bound the contractor to pay to the labourers engaged by him not less than the fair wage. It further provided that ‘fair wage’ would be the wage including the allowances, notified at the time of inviting tenders for the work. Clause 15 made the contractor responsible for compliance with the provisions of the Payment of Wages Act, 1936, and the rules made thereunder in respect of the staff employed by him. Clause 16 similarly made the contractor responsible for compliance with the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the rules made thereunder and required him to obtain the statutory license from the licensing authority. Clause 18 made the contractor responsible for compliance with the provision of the Hours of Employment Regulations in respect of the staff employed by him in the manner decided upon by the appropriate authorities. Clause 19 stipulated that no labourer would be unfairly treated or removed from work except for valid reasons and further provided that the porters engaged in the handling of goo