Delhi Transport Corporation vs M/S Neel Kanth Placement Services (Regd.)

Prathiba M. Singh, J

I.A. 4573/2017 (Delay in filing Restoration Application)

This application has been filed seeking condonation of delay of 101 days in filing of I.A. 4572/2017 for restoration of the petition. For the reasons

stated in the application, the delay is condoned.

I.A. is allowed.

I.A. 4572/2017 (Restoration Application)

This is an application seeking restoration of OMP 501/2008 which was dismissed for non-prosecution on 2nd December, 2016. For the reasons

stated in the application, OMP 501/2008 is restored.

I.A. is allowed.

O.M.P. 501/2008

The present petition has been filed under Section 34 of Arbitration and Conciliation Act, 1996 challenging the award of the Learned Sole Arbitrator

dated 6th June, 2008, except to the extent of award passed qua Issue No. 2 therein. Thus, the DTC does not raise a challenge in respect of amounts

awarded by the Arbitrator under Issue No.2. However, the amounts payable on the whole is under challenge.

The brief background is that the Respondent is an out sourcing agency through whom drivers were employed by DTC vide contract dated 14th

May, 2003. The agreement was valid for a period of one year from 14th May, 2003. Services of drivers were being availed of by DTC and payment

was made on the basis of per kilometre rate. The payments for the months of February, March, April and May, 2006, were withheld out of the sums

payable to the drivers, through the Respondent, as the Respondent had not made the statutory payments under the Employment Provident Fund

(hereinafter ‘EPF’) and Employees’ State Insurance Corporation (hereinafter ‘ESIC’). The ESIC’s recovery officer had issued

notices to DTC and had also attached its bank accounts, as the DTC was treated as the principal employer of the drivers. In this view of the notice

issued by ESIC and the withholding of payments to the Respondent by DTC, disputes arose between the parties and the matter was referred to

arbitration.

The agreement was valid for a period of one year from 14th May, 2003 and was thereafter renewed on an annual basis. Services of drivers were

being availed of by DTC and payment was made on the basis of per kilometre rate. It is the case of the contractor that the payments for the months

of February, March, April and May, 2006 were illegally withheld by DTC out of the sums payable to the drivers. The learned Sole Arbitrator vide the

impugned award dated 6th June, 2008 after deducting the sum payable to the ESIC and EPF, awarded a total sum of Rs.3,16,023/- along with security

money deposit of Rs.50,000/-. Learned counsel for DTC does not dispute to the fact that total claimed amount was Rs.25,45,646/- and insofar as this

amount is concerned, there is no doubt as the same is evident from a document filed by DTC in OMP 499/2008. However, the payments to be made

by DTC were liable to be deducted. Thus, the Ld. Sole Arbitrator held that the total sum due to ESIC/EPF authorities was Rs.21,50,640/-. After

deducting the said amount, the remaining amount has been awarded to the contractor as per issue No.3 i.e. a sum of Rs.3,95,006/-. No objection is

raised or pressed in respect of this amount awarded.

The Arbitrator, further allowed DTC to retain a sum of Rs.78,983/-towards any penalty which may be levied by the EPF authorities for non

payment of the EPF dues. The calculations of the Arbitrator are correct as per the record as also the notices issued by the statutory authorities. No

fault can be found insofar as these findings are concerned. Insofar as the amount withheld towards possible penalty by the EPF authorities, it appears

that the penalty amount has been awarded twice by the arbitrator, once as part of the EPF dues and again as part of the balance payable by the

Respondent. This is a duplication which deserves to be corrected. Thus, the amount of Rs.78,983/- is liable to be reduced from the sum allowed to be

retained by the DTC. If any penalty is imposed by EPF authorities, DTC is entitled to recover the same from the Respondent.

Learned counsel for the Petitioner submits that as per Issue No.4, the learned Arbitrator has not clarified that the liability, if any, towards the drivers

before the Labour Commissioner is of the contractor and not to DTC. It is, therefore, clarified that this Court on 31st August, 2018 has already passed

similar orders clarifying that the liabilities, if any, before the Deputy Labour Commissioner in the proceedings filed by the drivers would only be that of

the contractor and DTC would not be liable for the dues of the drivers.

The last submission of learned counsel for DTC is in respect of the interest. In the connected similar matters, this Court has already reduced the

interest from 18% to 10% per annum from the date of award till the date of payment. The same shall be applicable even in the present case. The

payment shall be released within a period of 8 weeks by the Petitioner â€"DTC to the Respondent, failing which, interest on the total amount awarded

@ 12% per annum would be liable to be paid, on the total decretal amount till the date of actual payment.

With these modifications, the O.M.P. is disposed of.