JUDGMENT

Y.K. Sabharwal, J.-Leave granted.

2. An agreement dated 16th September, 1981 was executed between the first respondent (for short the contractor ) and the Kerala State Electricity Board (for short the Board ) for construction of a dam. This was pursuant to a tender notice issued by the Board inviting tenders; tenders submitted by the contractor; correspondence exchanged between the parties and the negotiations held. A supplementary agreement was also executed; extensions for completion of work were granted and there were deviations of works as well which aspects are, however, not necessary to be narrated for the purpose of the disposal of these matters.

3. The Government of Kerala issued a notification dated 30th March, 1983, under the Minimum Wages Act, 1948 revising the minimum wages payable to the employees employed in the works stated in the notification w.e.f. 1st April, 1983. The contractor claims that he started paying revised minimum wages to the employees and applying the labour escalation formula, the Board made payments to the contractor for the work done from 1st April, 1983 till December, 1984. The Board, however, stopped making payment of labour escalation fr