M/S IVT VLT CC(JV) Vs THE CHAIRMAN-CUM-M.D MCL
Bench: J. CHELAMESWAR,A.K. SIKRI
Case number: C.A. No.-009394-009394 / 2014
Diary number: 39029 / 2013
Advocates: AMARJIT SINGH BEDI Vs
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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9394 OF 2014 (ARISING OUT OF SLP (C) NO. 39122 OF 2013)
M/S. IVT (IB VALLEY TRANSPORT), VLT (VIJAY LAXMI PVT. LTD.), CC (COAL CARRIERS) (JV) .....APPELLANT(S)
VERSUS
CHAIRMAN-CUM-MANAGING DIRECTOR MAHANADI COALFIELDS LTD. & ORS. .....RESPONDENT(S)
O R D E R
A.K. SIKRI, J.
Leave granted.
2) In this appeal, the appellant is challenging the validity of orders
dated November 21, 2013 passed by the High Court of Orissa in
Writ Petition (Civil) No. 22022 of 2013 whereby the High Court
has dismissed the writ petition on the ground that the dispute
between the parties arises out of a commercial contract and,
therefore, remedy for adjudication thereof by way of writ petition
under Article 226 of the Constitution is not available. The High
Court has, thus, observed that such a dispute has to be settled Civil Appeal No. of 2014 Page 1 of 10 (arising out of SLP (C) No. 39122 of 2013)
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either in a suit or in other proceedings in accordance with the
contract.
3) The brief facts which are discernible from the record are that the
respondents floated a tender, i.e. NIT No. MCL/SBP/GM(TC)/
NIT-514 (hereinafter referred to as 'NIT-514') dated November 18-
19, 2008 for “transportation of surface miner coal fact to Kanika
Railway Siding and transportation of surface miner reject to face
to surface miner reject dump of Kulda OCP, Basundhara
Garjanbahal Area”. The period of contract for the said NIT was
for three years and the estimated value of the work was
₹63,68,45,000/- (rupees sixty three crores sixty eight lacs and
forty five thousand only). The appellant also submitted its bid
and, on evaluation thereof, emerged as the Lowest Tenderer (L-
1). This resulted in the issuance of the letter of acceptance dated
March 20, 2009 which was served upon the appellant and the first
work order was issued on May 18, 2009. As per the appellant, it
is only after 22 months from the date of letter of acceptance i.e.
on June 7, 2011, the site was handed over to the appellant. As
such the appellant started execution of the contract with effect
from June 07, 2011. The contract was performed upto June 06,
2014.
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4) A dispute arose between the parties which is about the rate at
which payment of revised wages is to be made by the appellant to
all contract workers engaged in the mining activities. It originated
under the circumstances mentioned hereinafter.
5) It so happened in the Work Order dated May 18, 2009, working
details were described pursuant to NIT-514. Clause 37.06 of NIT-
514 contained Wage Compensation Formula, which will be
referred to by us later at the appropriate stage. What is relevant
to point out at this stage is that on September 28, 2012, the
Central Government issued another notification for the revision of
the Minimum Wages in Mines and Establishment falling under the
Government of India. It prescribed the minimum wages for
workers working above the ground for the categories of unskilled
as ₹186/-, semi-skilled as ₹231/-, skilled/clerical as ₹279/- and
highly skilled as ₹324/-. According to the appellant, it has been
paying the workers wages at the aforesaid revised rates with
effect from January 01, 2013.
6) While the appellant was executing the said work, the first
communication in regard to the payment of revised wages was
made by the respondents through a letter dated June 21-22, 2013
directing therein that the appellant shall pay to all contract
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workers engaged in the mining activities, pursuant to NIT-514, the
revised wages as per the recommendation of the High Power
Committee of Coal India Limited contained in its Circular No.
CIL/C-5B/ JBCCI/HPC/566 dated February 18, 2013. In this
letter, the respondents had categorically stated that there is no
provision of Wage Escalation/Compensation Formula in the
contract awarded to the appellant. However, if the appellant had
any reservation/ grievance in paying the revised wages to the
workers, the appellant ought to submit a written representation.
7) In reply to the aforesaid letter, the appellant, vide letter dated
June 29, 2013, intimated the respondents that it is ready and
willing to accept the rate derived considering the Wage
Compensation Formula as per the clause inserted in the contract
of other NITs, the work of which is in progress in the same project
(Kulda OCP), even though there is no provision of Wages
Escalation/Compensation Formula in the contract awarded to the
appellant. The appellant started paying the revised wages to the
contract workers as per the directions of the respondents vide
letter dated June 21-22, 2013.
8) While the things stood at that stage, the respondents issued
orders dated August 06, 2013 and called upon the appellant to
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pay wages at the rate of ₹279/- (basic wage ₹180/- plus ₹99/- as
variable dearness allowance) as base rate of minimum wages.
In this communication, the aforesaid basic wage is arrived at by
taking aid of the Government Notification dated November 28,
2012 which became effective from October 01, 2012. According
to the appellant, the aforesaid mode of calculating the base rate
of minimum wage by taking into consideration rates prescribed in
Government Notification dated November 28, 2012 is per se
erroneous inasmuch as the said Notification became effective
only from October 01, 2012, whereas, as per Clause 37.06 of
NIT-514, the rate of minimum wages which has to be taken into
consideration is as per Central Government's Notification
“corresponding to the last date of submission of tender”. It is the
submission of the appellant that since the last date of submission
of tender was December 23, 2008, the Government Notification
which was applicable as on that date had to be taken into
consideration to arrive at base minimum wage and as per this,
₹111/- per day was the minimum wage for skilled category of
workers in terms of Central Government Notification dated
October 27, 2008. The appellant, accordingly, made the
representation dated August 29, 2013 objecting to the basic wage
as calculated by the respondents in its letter dated August 06,
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2013 and intimating its willingness to accept the rate derived
considering the Wage Compensation Formula as per the
aforesaid clause in NIT-514. Since no reply was received, the
appellant filed the aforesaid writ petition, fate whereof has already
been mentioned above.
9) When the special leave petition came up for hearing on January
10, 2014, following order was passed:
“Issue notice returnable in two weeks as we want to remit the case to a particular forum after hearing the other side. Dasti, in addition, is permitted.”
10) The respondents have filed the counter affidavit wherein it is, inter
alia, pleaded that the appellant had not followed the general
terms and conditions of Clause 12, which provides for a dispute
resolution mechanism. This clause states that if any dispute
takes place between the contractor and the department, effort
shall be made to settle the disputes at company level. Further,
this clause states that the contractor should make request in
writing to the Engineer Incharge for settlement of such disputes/
claim within 30 days of arising of cause of the dispute/claim,
failing which no dispute/claim of the contractor shall be
entertained by the respondents. The respondents have also
sought to justify the rates of minimum wage for skilled workers, as
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derived in their communication from August 06, 2013, in respect
of which decision has been taken by the Coal India Limited, which
is the parent company of Mahanadi Coal Fields Limited
(respondents herein). However, we are not concerned with the
merits of the dispute and we are only to decide the appropriate
forum where the dispute is to be decided and hence, we are not
taking note of those submissions made on the basis of which the
respondents justify the contents of their communication dated
August 06, 2013.
11) From the aforesaid narration of facts, it becomes clear that
Clause 12 of the General Terms and Conditions provides for a
mechanism of dispute resolution before resorting to the legal
remedies. This clause specifically states that it is incumbent upon
the contractor to avoid litigation and disputes during the course of
execution. If any dispute takes place between the contractor and
the department, effort shall be made first to settle the disputes at
the company level. Further, this clause states that the contractors
should make request in writing to the Engineer Incharge for
settlement of such dispute/claim within 30 days of arising of
cause of dispute/claim. Further, as per Section 8 of NIT-514, the
contractor can avail second resolve mechanism technique, i.e.
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Independent External Monitor (IEM) to resolve the dispute. It was
to be resorted to in the first instance before approaching the
Court. There is no quarrel between the parties in respect thereof.
However, issues are joined on the utilization of the said
mechanism. As per the appellant, after receiving the offending
Office Order dated August 06, 2013, it had sent communication
dated August 29, 2013 requesting therein to revise the aforesaid
Office Order to the extent that the rate of minimum wages should
be taken as ₹101/- per day in respect of ₹279/- per day, but no
response thereto was received within the period of 30 days. The
appellant argues that in this manner it had exhausted the said
channel and only thereafter approached the High Court. The
respondents maintained that writing of letter dated August 29,
2013 was not in terms of Clause 12.
12) We find some justification in the stand taken by the respondents.
No doubt, in its representation dated August 29, 2013 the
appellant stated that the value of Po of Wage Compensation
Formula (Clause No. 37.06) has not been incorporated in the
above Office Order correctly and the rate of minimum wages as
on the last date of submission of tender was December 23, 2008.
On this basis, request is made to revise the calculations and
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communicate the same to the appellant. However, it is not stated
that dispute has arisen on that account and it should be resolved
in terms of Clause 12. Clause 12 of NIT-514 reads as under:
“It is incumbent upon the contractor to avoid litigation and disputes during the course of execution. However, if a dispute takes place between the contractor and the department, efforts shall be made first to settle the disputes at the company level.
The contractor should make request in writing to the Engineer I/C for settlement of such disputes/ claims within 30 days arising of the cause of dispute/claim failing which no dispute/claim of the contractor shall be entertained by the company.
If differences still persists, the settlement of the disputes with Govt. agencies shall be dealt with as per guidelines issued by Ministry of Finance, Govt. of India in this regard. In case of parties other than Govt. agencies, the redressal of the dispute may be sought in the Court of Law within the jurisdiction of District Court/High Court where the work will be executed.”
13) It is manifest that representation dated August 29, 2013 in no way
attempts to invoke the mechanism provided in Clause 12 for the
settlement of dispute. The respondents in the counter affidavit
have categorically stated that vide letter dated June 28, 2013, the
Staff Officer (Mining) BG had given the details of methodolgy for
calculation of wage compensation and, therefore, clarification was
given.
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14) It is clear from the above that a dispute has arisen about the
methodology for calculation of wage compensation. In such
circumstance, as per Clause 12, the appellant was supposed to
write to the Engineer Incharge for resolving the dispute.
Pertinently, communication dated August 29, 2013 is addressed
to the Staff Officer (Mining). Therefore, by no stretch of
imagination, it can be said that the appellant availed the
departmental remedy provided under Clause 12, before filing the
writ petition.
15) Having regard to the aforesaid facts, we dispose of this appeal by
directing the appellant to exhaust the remedy under Clause 12 by
requesting the Engineer Incharge to resolve the dispute before
taking recourse to any suitable legal remedy.
No costs.
.............................................J. (J. CHELAMESWAR)
.............................................J. (A.K. SIKRI)
New Delhi; October 10, 2014.
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