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2024 Supreme(Gau) 1178
IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
SANJAY KUMAR MEDHI, J.
M/s. S.H. Enterprise, A Sole Proprietorship Of Md. Safiqul Hussain, Son Of Late Hussain Ali – Petitioner
Versus
The Indian Oil Corporation Ltd., Represented By Its Executive Director and Ors. – Respondents
WP(C) No.3804 Of 2023, WP(C) No.6596 Of 2023
Decided On : 06-09-2024
For the Petitioner: Ms. B. Bhuyan, Ms R. Tado, Ms P. Phukan, Mr. T. Deuri, Mr A. Atreya, Shri R. Sarma.
For the Respondents: Mr. K.N. Choudhury, Mr. D.J. Das, Ms N. Mahanta, Miss. R.R. Kakati, Shri A. Dasgupta, Sr. Counsel, Shri A. Das.
IMPORTANT POINT
A contractor's right to engage workers is upheld unless explicitly restricted by the contract or applicable settlements.
Headnote:
Contract - Catering Services - Industrial Disputes Act - Sections 2(p), 18 - The court interpreted the contractor's rights to engage workers, emphasizing that existing settlements do not bind new contractors unless explicitly stated, influencing the decision to set aside the termination order.
Fact of the Case:
The petitioner, awarded a catering contract, faced issues with worker engagement and contract termination by the respondent. The petitioner claimed the right to hire its own workers, while the respondent insisted on retaining previous workers due to an existing settlement.
Finding of the Court:
The court found that the contract did not restrict the petitioner from hiring its own workers and that the existing settlement did not impose such a condition on the new contractor, leading to the conclusion that the termination was unjustified.
Issues: Whether the petitioner was entitled to engage its own workers under the contract and if the termination of the contract was justified.
Ratio Decidendi: The court held that in the absence of a clause in the contract or settlement mandating the retention of previous workers, the petitioner had the right to engage its own workforce.
Result: The termination order dated 06.11.2023 is set aside, allowing the petitioner to complete its contractual obligations.
JUDGMENT :
(Sanjay Kumar Medhi, J.) :
Both these writ petitions being connected, have been heard analogously and 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.
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 investment and because of the impugned action, the petitione
