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1979 Supreme(Ker) 45

Kerala High Court
P.SUBRAMANIAN POTI,KUMARI P.JANAKI AMMA
Antony DCruz - Appellant
Versus
B.Ramadas - Respondent
Decided On : 02/21/1979

Advocates:
P. Gopalakrishnan Nair, for Appellants; Govt. Pleader, for Respondents.

Arbitration depends on the consent of parties and cannot be compulsory, especially with parties who are not part of the arbitration agreement.

Headnote:

Arbitration - Government Contractor - Central Public Works Department Contractors' Labour Regulations, Contract Labour (Regulation and Abolition) Act, 1970 - Clauses (12), (13), (25) of the Conditions Contract, Section 21 of the Act

Fact of the Case:

The first respondent, a Government contractor, entered into a contract with the Union of India for construction works. The appellants represented the workmen employed by the first respondent. The first respondent sought arbitration to resolve a dispute regarding the recovery of a sum from the bill amount payable to the plaintiff on account of wages payable to the laborers engaged by the plaintiff.

Finding of the Court:

The Court found that the reference to arbitration was not well advised as it did not consider whether the dispute fell within the arbitration clause of the contract and whether arbitration with additional defendants was possible. The Court concluded that there was no justification to refer the matter to arbitration and dismissed the arbitration Original Suit.

Issues: The issues involved the validity of the reference to arbitration, the nature of disputes falling within the arbitration clause, and the possibility of arbitration with additional defendants who were strangers to the arbitration agreement.

Ratio Decidendi: The Court held that the reference to arbitration was not justified as the dispute did not fall within the arbitration clause of the contract. Additionally, the Court emphasized that arbitration depends on the consent of parties and cannot be compulsory, especially with parties who are not part of the arbitration agreement.

Final Decision: The appeal was allowed, the order was vacated, and the arbitration Original Suit was dismissed.

Judgement

SUBRAMANIAN POTI, J. :- The first respondent in this appeal is a Government contractor. He had entered into a contract with the Union of India for carrying out certain works relating to the construction of an operational wall at Civil Aerodrome, Trivandrum. The appellants are said to represent the workmen employed by the first respondent in connection with the work carried out by him pursuant to the agreement entered into with the second respondent. The first respondent moved O.S. (Arbitration) No. 187 of 1977 before the Sub-Court, Trivandrum seeking that the Union of India be called upon to file the agreement entered into by him with the second respondent in Court and refer the dispute mentioned in the Original Suit to arbitration of the named arbitrator contemplated in the agreement or an arbitrator appointed by the Court. The complaint in the suit was that the defendant, the Union of India had arbitrarily, unilaterally and without any justification recovered a sum of Rs. 19,191 on 24-8-1977 from the bill amount payable to the plaintiff an account of wages payable to the labourers engaged by the plaintiff. It was contended that he had never defaulted payment of wages to the labourers engaged by him for the work, and therefore he disputed the claim of the defendant to recover such amount. It was this that was to be referred to arbitration. The defendant appeared and filed the agreement entered into between the parties which incidentally contained all annexures relevant thereto. It appears that the Court was moved for impleading the appellants here as additional defendants by an application I.A. No. 6634 of 1977 and by an order dated 20-9-1977 they were impleaded as additional defendants 2 and 3. Thereafter, by a very short order, the Court below referred the matter to the Government Arbitrator, Trivandrum. It is that (order) which is challenged in this appeal by the appellants who are the additional defendants 2 and 3.

2. Before we refer to the objection raised to the order of the Court below, it may be necessary to state a matter brought to our notice by parties at the hearing. Central Public Works Department Contractors' Labour Regulations govern the parties to the agreement and it is incorporated as part of the agreement between the parties. Clause (12) thereof authorises the Labour Welfare Officer or any other person authorised by the Central Government on their behalf to make enquiries with a view to ascertaining and enforcing due and proper observance of the fair wage clauses and the provisions of the Central Public Works Department Contractors Labour Regulations. Such officer is to investigate into any complaint regarding the default made by the contractor or sub contractor in regard to such provision. Clause (13) thereof obliges the Labour Officer or other person authorised to submit a report of result of his investigation or enquiry to the Executive Engineer concerned indicating the extent, if any, to which the default has been committed with a note that necessary deductions from the contractor's bill be made and the wages and other dues be paid to the labourers concerned. In case an appeal is made by the contractor under cl.(14) the actual payment to labourers will be made by the Executive Engineer after the Regional Labour Commissioner has given his decision on such appeal. It is provided in cl.(14) that any person aggrieved by the decision and recommendations of the Labour Welfare Officer or other person so authorised may appeal against such decision to the Regional Labour Commissioner concerned within 30 days from the date of decision, forwarding simultaneously a copy of his appeal to the Executive Engineer concerned but subject to such appeal, the decision of the officer shall be final and binding upon the contractor. It is agreed that in the case of the first respondent there was a claim made by the appellants for payment of wages and the Labour Welfare Officer had adjudicated on that claim. Of course,













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