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2015 Supreme(Del) 2303
IN THE HIGH COURT OF DELHI AT NEW DELHI
BADAR DURREZ AHMED, SANJEEV SACHDEVA, JJ.
FORBES FACILITY PVT LTD - Appellant
Versus
G.B. PANT HOSPITAL - Respondent
FAO(OS) 159/2015
Decided on : 20.08.2015
For the Appellant : Ms Surekha Raman
For the Respondent: Mr. Naushad Ahmed Khan
Validity of subsequent orders unilaterally changing the terms of the contract and the responsibility for the increase in minimum wages.
Headnote:
Arbitration - Minimum Wages - Arbitration and Conciliation Act, 1996 - Section 9
Fact of the Case:
The appellant claimed an amount due to the increase in minimum wages, while the respondent argued that the increase was the appellant's responsibility. The court found that the work order and subsequent corrigendum did not align, and the subsequent orders unilaterally changing the terms were not valid. The court interfered with the order to the extent that the appellant was not required to furnish a bank guarantee for a specific sum, but the rest of the order remained the same.
Finding of the Court:
The court found that the order passed by the learned Single Judge called for interference, as the subsequent orders unilaterally changing the terms were not valid.
Issues: The main issue was whether the appellant was entitled to the increase in minimum wages and whether the subsequent orders unilaterally changing the terms were valid.
Ratio Decidendi: The court held that the subsequent orders unilaterally changing the terms were not valid, and the appellant was not required to furnish a bank guarantee for a specific sum.
Final Decision: The appeal was disposed of accordingly, with the parties at liberty to move an application under Section 17 of the Arbitration and Conciliation Act, 1996 for any further or other interim directions that they may seek.
BADAR DURREZ AHMED, J (ORAL)
1. We have heard the learned counsel for the parties. This appeal is directed against the order dated 18.02.2015 passed by a learned Single Judge of this Court in OMP 129/2015 which was a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the said Act’).
2. By virtue of the impugned judgment/order, the learned Single Judge has directed the respondent – (i) to release an amount of Rs 1.5 crores to the petitioner within three weeks, subject to the petitioner (appellant herein) furnishing a bank guarantee of the said amount in favour of the respondent within two weeks from the date of the order with a further direction that the appellant would keep the bank guarantee alive till the culmination of the arbitration proceedings; and (ii) the petitioner/appellant shall also furnish a bank guarantee for Rs 28,76,306/- in favour of the respondent which would be kept alive till the culmination of the arbitration proceedings.
3. The learned counsel for the appellant submitted that the appellant was entitled to the increase in the minimum wages as per the government notification from time to time and on that account, because the respondent had stopped paying the increased rate of minimum wages since April, 2013, an amount of Rs 3.77 crores became due from the respondent.
4. On the other hand, the case of the respondent is that the said increase under the minimum wage was to be to the account of the appellant for which the respondent was not liable. However, the respondent had, for a certain duration of the contract period, paid the said increase and, therefore, an excess payment had been made to the appellant to the extent of Rs 28,76,306/-.
5. After having heard the learned counsel for the parties, it appears that the direction given by the learned Single Judge with regard to the furnishing of a bank guarantee for securing the claim of the respondent to the extent of Rs 28,76,306/- is not justified. The reason for this is that initially, when the work order dated 04.05.2011 was issued, it was immediately followed by the agreement dated 04.05.2011, which contained Clause 2 (XV), which reads as under:-
“(XV) The Service Provider shall abide by and comply with all the relevant laws and statutory requirements covered under Labour Act, Minimum, Wages and Contract Labour (Regulation & Abolition Act 1970) EPF etc. with regard to the hygiene specialists & hygiene supervisors engaged by him for sanitation works. The minimum wages shall be increased as per government notification during the period of the contract. It will be the responsibility of the Service Provider to provide details of manpower deployed by him, in the hospital and to the Labour Deptt. along with the photocopy of the police verification of each staff deployed by him. Being trained worker as hygiene specialists & hygiene supervisors, the person shall be equated as semi skilled worker in terms of Minimum Wages Act, 1948.”
The work order, however, did not appear to be in sync with this clause inasmuch as it contained the following sentence:-
“During the validity of the Rate Contract, no upward revision of the rates shall be allowed.”
Subsequently, perhaps, to keep the work order aligned with the contract, which was signed between the parties, a corrigendum was issued on 08.09.2011, which reads as under:-
“GOVERNMENT OF NATIONAL CAPITAL. TERRITORY OF
DELHI G.B. PANT HOSPITAL J.L. NEHRU MARCH, NEW
DELHI-110 002
(PURCHASE DEPARTMENT)
F. 93-7/GBP/PS/2011-13/Sanitary /8895-8901
Dated: 08.09.2011
CORRIGENDUM
In continuation of the Hospital Order No.81-61/OTE/San/10-11/GBPH/PS/ H-57-74 dated 04.05.2011 the sentence ‘During the validity of rate contract no upward revision of the rates shall be allowed’ in the rate of contract must be read as ‘The minimum wages shall be increased by the hospital as per government notification during the period of Contract’.
All other contents .of the Rate Contract remain un
