The main legal point established in the judgment is the interpretation of the rebate offered by the contractor on the gross bid value and its application to the entire quantum bid, including the enhanced amount on account of minimum wages and other statutory impositions.

JUDGMENT :

SANJIB BANERJEE, J.

Prayer: Appeal filed under Clause 15 of the Letters Patent against the order dated 10.03.2020 passed in W.P. No. 17160 of 2019 on the file of this Court.

1. The Southern Railway is in appeal against a portion of an order passed on a contractor’s writ petition against it. The directions are contained in paragraph 42 of the judgment and order impugned herein dated March 10, 2020. The appellant is not aggrieved by Clauses (a) and (b) of the directions. It is the third clause of the directions which is assailed.

2. Pursuant to a notice inviting tender, bids were made by several, including the writ petitioner firm, for undertaking the work of cleaning Chennai Park Railway Station for a period of three years. There were at least two other bidders. The writ petition was instituted upon the present appellants’ failure to accede to the contractor’s demand to meet the higher wage bill following the increase in minimum wages by a Government notification of January 19, 2017. The principal contention carried to the writ Court was that the first appellant herein, as the principal employer, was liable to bear the minimum wages of the employees deployed by the contractor and such position was also envisaged in the tender documents. Copious references are made to the schedules pertaining to the tender documents and the bid made on the basis of the four scheduled items. By the judgment and order impugned, the following directions were issued:

“42. Accordingly, the Writ Petition is disposed of on the following terms:

(a) The petitioner is directed to furnish proof of payment of the enhanced minimum wages to the employees as per the notification dated 19.01.2017, apart from the wages already paid as per the amount quoted in Schedule-A, with material details and particulars, within a period of four weeks from the date of receipt of a copy of this order.

(b) On receipt of such details and particulars, the Railways shall, on being satisfied with the said payment made by the petitioner to its employees, reimburse the said amount to the petitioner within a period of four weeks thereafter.

(c) It is made clear that the Railway is entitled to take the rebate offered by the petitioner namely 27% only under Schedule-B and Schedule-C rates and not under Schedule-A or D.”

3. The appellants herein join issue as regards the third of the directions. According to the appellants, the writ petitioner had given a rebate of 27% on the total bid value which included both the minimum wages component and the GST on minimum wages. The appellants assert that if such was the bid of the writ petitioner, upon the minimum wages being enhanced and upon the principal employer being required to bear the enhanced GST component, the percentage of rebate cannot be altered as the rebate amount will operate on the enhanced minimum wages bill and the GST payable thereon.

4. On behalf of the writ petitioner, it is contended that once it is accepted that the principal employer has to foot the minimum wages bill, no deduction can be sought therefrom. It is the further submission on behalf of the respondents that a statutory charge cannot also invite any reduction and as such, the GST component payable on the minimum wages would not be subject to any reduction by way of rebate.

5. Provisions of the Minimum Wages Act are sought to be cited in such regard. However, it does not appear that such provisions have any relevance in the present context. It is the bid of the writ petitioner which has to be noticed. The bid was made in respect of four scheduled items. Schedule A pertained to the Cost of Labourers; Schedule B pertained to the Cost of Consumables; Schedule C pertained to the Rental for Vehicles for Garbage Removal and Schedule D pertained to Service Tax @ 15%. Indeed, the financial offer of the writ petitioner may be seen in its entirety so that there may not be any room for equivocation.

6. In respect of Schedule A, the bid rate was at par with what was indicated