AI Structured Summary
Not yet generated for this judgment
Judgment
P. Venkatarama Reddi, J.—Writ Appeal No.520 of 1995 is filed by the Food Corporation of India (hereinafter referred to as ''FCF) against the judgment in Writ Petition No. 13707 of 1994 (reported in 1995 (1) ALD 798). Writ Appeal No.7SO of 1998 has been filed by the writ petitioner in Writ Petition No. 13707 of 1994. We have today condoned the delay in filing Writ Appeal No-780 of 1998 and heard the Counsel for the appellant in this case along with the other Counsel.
The Priyadarshini Jattu Cooli Samkshema Sangham, which claims to have undertaken the contract work during the period 1988-90, has filed a petition - W.A.M.P. No.535 of [998 in Writ Appeal No.520 of 1995 to implead itself in the writ appeal. Another impleading petition W.A.M.P,No.632 of 1998 is filed by Food Corporation of India Workers Union which, it appears, has entered into a settlement with the FCI at the national level with regard to the engagement of labour on direct payment basis. The said impleading petitions have been allowed by us. It may be mentioned that the said union filed an application before the Supreme Court for impleading. The same Society was impleaded in Civil Appeal Nos.7321 and 7322 of 1996 between the same parties arising out of the same litigation.
Although the writ petition, as filed by the Priyadarshini Jattu Workers Labour Contract Cooperative Society, which is also the appellant in Writ Appeal No.780 of 1998, raises the core question- whether the contract awarded to the 4th respondent-Society for the period 1994-96 while rejecting the tender of the writ petitioner-Society, is legal and valid, the writ petition has assumed farther dimensions by virtue of certain directions given by the learned single Judge, suo mom, requiring the FCI to deposit a sum of about Rs.60.00 lakhs towards the waees payable to the workers in the past. Thus, two aspects arise for consideration in these writ appeals - (1) with regard to the validity of the contract awarded to the 4th respondent and (2) with regard to the direction requiring the FCI to deposit Rs. 60.00 lakhs with the District Collector East Godavari District.
The Food Storage depot of FCI called for tenders with a view to award the contract for handling and transport of foodgrains for the period 1988-90. The impleaded respondent-Jattu Coolie Samkshema Sangham was awarded the contract. It is interesting to note that the said Society offered a rate 99.99% below the standard schedule of rates (hereinafter referred to as ''SSR'') fixed by the FCI. It appears that the SSR is worked out at the rate of Rs.36/- per 100 bags. Based on tills rate the estimated value of the work to be carried out by the handling and transport contractor is Rs.30.00 lakhs. Thus, a work worth Rs 30.00 lakhs was undertaken to be carried out by the successful tenderer for a pittance of Rs.300/-. It appears that this extraordinary move on the part of the successful tenderer was on account of unhealthy competition between the said Society and the 4th respondent who quoted the amount equivalent to SSR. For the next period i.e., 1990-92, the same scenario repeated itself. Tills time, the only difference is that the roles of the tenderers have got reversed in the sense that the 4th respondent had offered 99.999% less than SSR. The contract was, therefore, awarded to the 4th respondent. For the next spell of 1992-94, it is not in dispute that the contract was awarded to the 4th respondent-Co-operative Society on nomination basis as per the SSR. The said action of the FCI was challenged by the writ petitioner i.e., Priyadarshini Co-operative Society by filing Writ Petition No.13673 of 1992. The said writ petition was allowed on 1-4-1994. The learned single Judge held that the contract ought not to have been awarded on nomination basis. However, it may be noted that by the time the writ petition was disposed of, the period of contract was practically over. As a sequel to the judgment in the aforementioned writ petition, tenders were called for by the,, FCI for awarding the contract for the period 1994-96. As usual, the two contending Societies viz., the writ petitioner-Society and the 4th respondent-Society submitted their tenders. Whereas the 4th respondent offered to do the work as per the SSR, the writ petitioner-Society made its gamble again by quoting the rate at 99.99999% less than the SSR. By this time, wisdom dawned on FCI authorities and the FCI did not consider it fair and proper to accept the lowest and unrealistic tender of the writ petitioner-Society. In fact, the learned Standing Counsel for the FCI brings to our notice that even in 1991, the Head office of the FCI issued a circular No. 1/91/ contract diat the labour contract societies shall be entaistcd with the handling work without invitation of tenders but on the basis of workable rates to be offered by them and to be finalised by mutual negotiations. Be that as it may, the contract was awarded to the 4th respondent-Society which offered to do the work according to the SSR. This action of FCI has again been challenged by the ''writ petitioner in W.P. 13707/84 (appellant in WA No.780 of 1998). The relief sought for in the writ petition is to declare the action of the FCI in allotting handling and transport of foodgrains contract at Dhawaleswaram godown to the 4di respondent as illegal and arbitrary and to issue a consequential direction to allot the said work to the petitioner-Society with immediate effect. This writ petition was dismissed by the impugned judgment dated 21-3-1995. The learned single Judge KM, Aganval, ACJ, held that the grant of contract to the petitioner-Society at the rate quoted by it would have resulted in exploitation of the labourers and encouragement of unfair labour practice. The learned single Judge, therefore, observed that the grant of contract to the 4th respondent at the SSR rate is not unreasonable or arbitrary.
Thus, while upholding the award of contract to the 4th respondent for the period between 17-7-1994 and 16-7-1996, the learned single Judge moved by the disturbing facts that became apparent from the record, thought it fit to take up the issue of payment of fair wages to the labourers suo motu. Thus, in due course, the writ petition assumed the character of pubiic interest litigation and before issuing the directions which the learned single Judge did, it is not in dispute that opportunity was given to ail the Counsel. In other words, it is only after the learned single Judge indicated his mind about the proposed line of enquiry in a matter of public interest and on hearing the Counsel certain directions were given to safeguard the interests of labourers. The learned single Judge observed at paras 5 and 7 of the order in W.P.No. 13707/94 and directed as follows:
"In the facts and circumstances of the case and in exercise of the extra-ordinary powers of this Court under Article 226 of the Constitution, I feel it just and necessary to direct the 1st, 2nd, 3rd and the 5th respondent herein to deposit with the Collector, East Godavari District of Andhra Pradesh:
(1) A sum of Rs.30 lakhs minus Rs.300 = 29 lakhs, 99 thousand, 7 hundred along with interest at the rate of 12 percent per annum from 9-11-1990 to the date of deposit for the contract period 144-1988 to 8-11-1990 for being paid to the labourers directly, who actually performed the work, in the manner hereinafter indicated; and
(2) A further sum of Rs.30 lakhs minus Rs.30 = 29 lakhs, 99 thousand, 9 hundred, 70 only along with interest at the rate of 12 per cent per annum from 1-11-1992 to the date of deposit for the contract period 9-11-1990 to 30-10-1992 for being paid to the labourers directly who actually performed the work, in the manner herein after indicated;
within a period of 2 months from the date of this judgment. The direction for payment of interest, though may appear to be punitive in nature, is not in fact punitive. It is just and necessary, as well as reasonable in the circumstances of the case. A Government of India undertaking just ., like that of the 1st respondent Food Corporation of India ought not have even thought of earning or saving income in the fashion it has done in the present case. The money, thus saved was utilised by it during all these years and must not, therefore, hesitate to pay interest at the most nominal rate of 12 per cent per annum."
x x x x x
On receipt of the said amounts, the Collector, East Godavari District shall first ascertain from the records of the petitioner and those of the respondents as to the:
(1) Names and addresses of the labourers who performed the work during the periods 14-4-1988 to 8-11-1990 and 9-11-1990 to 30-10-1992; and
(2) the volume of work done by each of them;
and then after due identification of the person or persons claiming the amount, pay flic amount due to them as per volume of work done at the SR rate less the amount already paid to them, plus the interest that is worked out on the amount payable to them. All this be done as expeditiously as possible and after completion of the work a report shall be submitted before this Court by flic Collector, who shall be at liberty to seek any clarification or guidance or direction, in case any difficulty is felt in implementation of these directions"
Against this judgment, FCI filed Writ Appeal No. 520 of 1995 before this Court. Pending the appeal, this Court passed an interim order in WA MP No.956 of 1995 and WA MP No.94 of 1996. The learned Judges, while declining to suspend the order of the learned single Judge, modified the same to the effect that:
"irrespective of the presence of the Cooperative Societies and irrespective of whether a labourer is a member of one or the other Co-operative Society or is not a member of any of the Societies at all, the Food Corporation of India shall engage labourers for work and pay to them fair wages which they themselves admit to have determined.""
Against this order dated 7-2-1996, the 4th respondent herein filed SLP (Civil) Nos. 5704-5705/96 in the Supreme Court of India. The same was dismissed by an''order dated 26-3-1996. However, on an appeal filed by FCI, the Supreme Court granted interim stay of operation of the order passed in W.A.M.P.No. 956/95 and W.A.M.P. No. 94 of 1996 while granting Leave to Appeal on 22-4-1996. The Civil Appeal Nos. 7321-7322 of 1996 filed by the Food Corporation of India against the order passed in two WA.M.Ps were disposed of by the Supreme Court on 11-12-1997. The Supreme Court while continuing the interim order and also clarifying that the stay order will have no impact on any subsequent agreement entered into by the FCI workers Union with the management of FCI in connection with the introduction of direct payment system, left it open to all the parties to agitate before the High Court all the relevant issues in the Writ Appeal. Thus, their Lordships of the Supreme Court did not go into the merits of the case.
Taking up the first question with regard to validity of contract awarded to the 4th respondent for the period 1994-96, as the period of contract had already expired, this issue need not, in the normal course, be decided by us. But, as the arguments were addressed and the first question and the 2nd question are in a way inter-linked, we consider it proper to deal with the issue on merits. We arc in agreement with the learned single Judge that the award of contract to the 4th respondent is quite justified in the interests of all conceived and in the circumstances of the case although he is not the lowest tenderer. As rightly observed by the learned single Judge, the supersession of the lowest tenderer could very well be done on valid and relevant grounds. The offer made by the writ petitioner to do the work at 99.99999 percent below the schedule of rates cannot in the very nature of things be termed as a bona fide offer. The so-called offer on the face of it is unconscionable and incongruous. It is not difficult to infer and assess the intention behind such offer which practically amounts to doing the contract gratuitously. The implication of offer would be either to incur the expenditure out of the pocket of the Cooperative Society of labourers or to extract the work from the members practically as bonded labourers. It is true that the 4th respondent Society also indulged in this practice during the preceding period but that hardly affords a justification for putting our seal of approval on the same modus operandi adopted by another tenderer during the succeeding period. It is not out of place to mention that the pleadings and the material papers filed in the W.P. disclose instances of dislocation of work at the godown in the past when such incredibly low offer was given effect to. It is obvious that the offer made by the writ petitioner cannot be viewed or judged on its face value and much lies beneath the surface of such offer. The purpose and implications of such offer can be easily discovered by looking behind the veil. It is obvious that for the purpose of out-witting and stalling the offer of the 4th respondent, the writ petitioner came forward with this unrealistic and dubious offer. The FCI after having encouraged such offers in the past had atleast realised that such an offer of dubious distinction should not be accepted. In these circumstances, the acceptance of offer of the 4th respondent is the only expethent and proper course. It may be recalled that the 4th respondent offered to undertake the work at the standard schedule of rates, which atleast enables the contractor to reach a break even point.
We, therefore, see no illegality in the order of the learned single Judge in dismissing the writ petition.
The learned Counsel for tlic \\vril petitioner, who is also the appellant in W.A. No.780 of 1998, has contended that from 1997 onwards, direct payment system ''no work'', no pay'' basis has been introduced in the FCI GodouTi at Dowleswararn and the criteria for engagement of ''Hamalies as laid down in the settlement/agreement entered into between the FCI and the Workers Union (implcaded as a party in Writ Appeal No. 520 of 1995) is such that it may cause detriment to the members of the writ peitioners-Socicty. It is not proper and appropriate to decide this~aspect, which is really collateral !o the controversy that lias presented itself in the writ petition and the writ appeal. If the members of the writ petitioner-Society are deprived of the opportunity to work in the FCI Godoun by reason of the aforementioned agreement or otherwise, it is open to the Society or the workmen concerned to agitate the issue either by raising an Industrial Dispute or by taking any other appropriate steps. We have no reason to think that the FCI will not treat all sections of labour fairly subject to inherent limitations. We need not, therefore, dilate on this aspect any further.
Coming to the directions given by the learned single Judge with regard to the depositing of amounts (which we have extracted above), basically, we endorse and approve the course of action adopted by the learned single Judge. ''the learned Standing Counsel for FCI has repeatedly high-lighted the fact that there were no pleadings and no material placed before the Court with regard to the disbursement of wages and other relevant factors and the learned single Judge should not have, therefore, granted any directions suo motu. It is submitted that by accepting the lowest tender, the FCI acted bona fide at that juncture and it should not be penalised by paying a huge amount to the labourers engaged by the contractor. We do not think that the absence of pleadings or other details should have deterred the learned single Judge from granting the directions which he did when on the admitted facts, the injustice done to the labourers constituting the Co-operative Society is demonstrable. The knowledge and awareness of FCI that the modus opsmndi adopted by the contractor-Society, which had the blessings of the FCI, would have inevitable effect of depriving the labour of their due wages is a matter of reasonable inference that has to be drawn. Pleadings and enquiry'' are not essential to prove this undeniable fact. Viewed from another angle, by requiring the FCI to meet the liability for payment of fair wages during the relevant time, the FCI is required to disgorge the unjust benefit it had derived by accepting an offer which, as already observed by us, is illusory and lacking in bona fides. The exploitation of labour and unfair labour practices cannot but be the result of such, offer which culminated in the award of contracts to the Societies concerned. The FCI, which is a statutory Corporation owned and controlled by the Central Government, cannot be expected to be a party to the unfair designs of these Labour Co-operative Societies, which are supposed to cater .to the welfare of the members. The FCI cannot shut its eyes to the realities and revel on the attractive offers made by those Societies, disregarding the Constitutional directive under Article 43 to ensure a living wage to workers. The facts and circumstances of the case show that there is no difficulty in reaching a conclusion that at the relevant point of time, the labour employed at the FCI Godowns would not have got their due and legitimate share of wages and that in the very nature of tilings, it was impossible for the contractors/Co-operative Societies to pay such wages to the labourers engaged by them. When it is noticed by the Court that the fundamental right enshrined in Article 21 of the Constitution has been violated in relation to the labour employed at the material point of time and the directive principle in Article 43 has been breached by the instrumentality of a State, though in a covert and indirect manner, it becomes the duty of the Constitutional Court to afford adequate relief to the labourers. This is exactly what has been done by the learned single Judge. We are not inclined to take a different view. However, on taking a realistic and pragmatic view of the matter on a consideration of the pros and cons, we deem it fit to modulate and modify the relief granted by the learned single Judge. The object behind the directions given by the learned Judge is to ensure that the labourers concerned should be paid the differential wages. It is not just and proper to presume that the labourers would have worked without any payment. It is reasonable to think that there would have been some payment, but such payment would have definitely fallen short of the minimum wages admissible to the unskilled labour as per the notifications in force in the area. Moreover, we feel that there is no warrant in directing deposit of The amount equivalent to the estimated value of the work as per the SSR, as there could be some margin between the SSR and the actual workable rate. We arc also of tie view that the facts and circumstances of the case do not warrant grant of interest.
hi the circumstances, we pass the following order, in modification of the order of the learned single Judge:
Within a period of 60 days from today, the appellant 3 and 5 in WA No.520 of 1995 should deposit in the first instance a sum of Rs.30,00,000/- (Rs.Thirty lakhs) widi the District Collector, East Godavari. The said amount may be invested by the District Collector in an interest-yielding deposit. The District Collector shall enquire into the details or cause enquiry to be made in regard to the details of labourers who worked during the period from 14-4-1988 to 8-11-1990 and from 9-11-1990 to 30-10-1992 and the wages paid to them approximately during the relevant days and the difference payable if the minimum wage rate is applied. The amount so arrived at shall be disbursed to the labourers or their legal representatives, if any. For this purpose, flic District Collector, East Godavari may call for the records from the FC1 and~"thc writ petitioner-Society as well as the impleadcd Society and invite the claims from the labourers, who worked at the relevant point of time by giving due publicity. In order to carry out the task assigned to flic District Collector which is no doubt an arduous task, the Collector ma}'' nominate an Officer who will conduct a preliminary enquiry'' and submit a report to him. The said Officer or District Collector may take the assistance of any official serving or retired or an Advocate and the remuneration of such Officer or Advocate can be paid from out of the amount deposited by the FCi. If any further amount is required to meet the claims for differential wages the Collector may address the appellants 3 and 5 (i.e. Senior Regional Manager, Hyderabad and District Manager, Kakinada) whereupon the said appellants should deposit a further sum to the maximum extent of Rs. 15 lakhs within a period of one month from the date of receipt of letter. The process of enquiry and disbursement shall be completed within a period of six months from date of receipt of this order. Any surplus amount shall be refunded to FCI.
The Writ Appeals are disposed of accordingly. No costs.