ANTONY DCRUZ Vs. B RAMADAS

JUDGEMENT

(1.) THE first respondent in this appeal is a Government contractor. He had entered into a contract with the Union of India for carrying out certain works relating to the construction of an operational wall at Civil Aerodrome, Trivandrum, THE appellants are said to represent the workmen employed by the first respondent in connection with the work carried out by him pursuant to the agreement entered into with the second respondent. THE first respondent moved O. S. (Arbira-tion) No. 187 of 1977 before the Sub-Court, Trivandrum seeking that the Union of India be called upon to file the agreement entered into by him with the second respondent in Court and refer the dispute mentioned in the Original Suit to arbitration of the named arbitrator contemplated in the agreement or an arbitrator appointed by the Court. THE complaint in the suit was that the defendant, the Union of India had arbitrarily, unilaterally and without any justification recovered a sum of Rs. 19,191 on 24 8-1977 from the bill amount payable to the plaintiff on account of wages payable to the labourers engaged by the plaintiff. It was contended that he had never defaulted payment of wages to the labourers engaged by him for the work, and therefore he disputed the claim of the defendant to recover such amount. It was this that was to be referred tc arbitration. THE defendant appeared and filed the agreement entered into between the parties which incidentally contained all annexures relevant thereto. It appears that the Court was moved lor impleading the appellants here as additional defendants by an application I. A. No. 6634 of 1977 and by an order dated 20-9-1977 they were impleaded as additional defendants 2 and 8. THEre- after, by a very short order, the Court below referred the matter to the Government Arbitrator, Trivandrum. It is that (order) which is challenged in this appeal by the appellants who are the additional defendants 2 and 3.

(2.) BEFORE we refer to the objection raised to the order of the Court below, it may be necessary to state a matter brought to our notice by parties at the hearing. Central Public Works Department Contractors' Labour Regulations govern the parties to the agreement and it is incorporated as part of the agreement between the parties. Clause (12) thereof authorises the Labour Welfare Officer or any other person authorised by the Central Government on their behalf to make enquiries with a view to ascertaining and enforcing due and proper observance of the, fair wage clauses and the provisions of the Central Public Works Department Contractors Labour Regulations. Such officer is to investigate into any complaint regarding the default made by the contractor or subcontractor in regard to such provision Clause (13) thereof obliges the Labour Officer or other person authorised to submit a report of result of his investigation or enquiry to the Executive Engineer concerned indicating the extent, if any, to which the default has been committed with a note that necessary deductions from the contractor's bill be made and the wages and other dues be paid to the labourers concerned. In case an appeal is made by the contractor under Clause (14) the actual payment to labourers will be made by the Executive Engineer after the Regional Labour Commissioner has given his decision on such appeal. It is provided in cl. (14) that any person aggrieved by the decision and recommendations of the Labour Welfare Officer or other person so authorised may appeal against such decision to the Regional Labour Commissioner concerned within 30 days from the date of decision, forwarding simultaneously a copy of his appeal to the Executive Engineer concerned but subject to such appeal, the decision of the officer shall be final and binding upon the contractor. It is agreed that in the case of the first respondent there was a claim made by the appellants for payment of wages and the Labour Welfare Officer had adjudicated on that claim. Of course, the first respondent has a case that that adjudication is not valid and proper and that is said to have been challenged in an appeal. There is some dispute as to whether there is such an appeal filed or not. Anyhow we are not concerned with that question here. We are only referring to this to indicate that the recovery from the bill of the sum of Rs. 19,191 appears to be pursuant to the adjudication by the Labour Welfare Officer and not consequent upon any dispute which arose under the contract between the plaintiff and first defendant. It is withheld only because of the order of the Labour Welfare Officer.

(3.) WE find that the reference by the Court below was not well advised. It had not bestowed its mind to the question whether in the circumstances there could be any reference under the Arbitration Act. There are two questions which had necessarily to be noticed when deciding to refer the matter. Whether the dispute is one which falls within Clause (25) of the Conditions of Contract is the first of these questions. Whether there should be reference at all in an arbitration suit in which strangers have been impleaded as parties is an equally important question.