Oral Judgment: (R.K. Deshpande, J.)
1. Rule made returnable forthwith.
Heard finally by consent of learned Senior Advocate Shri M.G.Bhangde, assisted by Shri Mayank Agnihotri, Advocate for the petitioners and Shri Rohan Chandurkar, learned counsel for respondent nos.1 and 2.
2. Two bank guarantees dated 25.08.2008 and 14.05.2011, each for an amount of Rs.1,07,29,750/- furnished by the petitioners in respect of the work in question, were invoked by letter dated 26.02.2013 addressed to the Branch Manager, Bank of Maharashtra, solely on the ground that the petitioner Contractor has not paid to his employees salary and wages as per “Law of the Land” applicable to the workmen of the colliery/washery where the petitioner – Contractor is working under a contract, in terms of Clause 31.01 of the conditions of the Contract. It is not in dispute that the employees have been paid minimum wages applicable in terms of the provisions of the Minimum Wages Act, which was applicable even to the employees working in the establishment of the respondents.
3. It was the defence raised by the respondents before this Court that in terms of Clause 31.01 referred to above, “the Law of the Land” referred to therein includes the terms of wages agreed under the National Coal Wage Agreement dated 24.01.2009 between the respondent establishment and its coal workers. Undisputedly, the rate of payment of wages as per this Agreement was higher than the minimum wages prescribed. The stand of the respondents is that the petitioners had failed to pay wages as per the National Coal Wage Agreement to the employees employed by the petitioner Contractor for the work in question.
4. On 06.12.2013, this Writ Petition was allowed and it was held as under:
“In this situation, it is apparent that payment being made at minimum rate of wages was never objected to either by the present respondents or by any particular Trade Union working under them or then by any of the Contractors' employee. Hence, on alleged pretext, suddenly the action of forfeiture of Bank guarantee could not have been taken. Learned Counsel for respondents attempted to demonstrate before us that the provisions of NCWA are attracted in case of labour employed by the petitioner and has relied upon certain clause of NCWA. We are not inclined to go into that controversy in present facts. We leave the contention open for its proper presentation. It is also open to the respondents to introduce more clarity in this regard in contract itself before changing the long standing practice.”
5. This Court had left out the question of applicability of NCWA in respect of the workers employed by the petitioner Contractor for doing the job under the contract in question. The respondent Western Coalfields Limited approached the Apex Court challenging the said decision and on 03.07.2017, Civil Appeal No.8383 of 2017 was allowed by setting aside the decision of the High Court holding that the applicability or otherwise of the NCWA was not considered and the matter was remanded back to this Court for decision in accordance with law without expressing any opinion on merit.
6. Two Clauses under the Agreement i.e. Clause no.31.1 and 31.01 need to be seen, which are reproduced below:
“31.1 Contractors are to employ, to the extent possible, only local project affected people and pay wages not less than the minimum wages fixed by the Law of the Land.”
“31.01 The contractor shall pay to his employees salary and wages as per Law of the Land applicable to the workmen of the colliery/washery where he is working under this contract”.
7. Shri Bhangde, learned Senior Advocate, has urged that the insistence by the respondent WCL for payment of wages in terms of the National Coal Wage Agreement, which prescribes wages higher than the minimum wages is not the part of the contract and the expressions “Law of the Land” and the “Law of the Land applicable to the workmen of the colliery/washery where he is working under this contract” (the highlighted portion above), does not include the terms under the National Coal Wage Agreement but, it refers only to the statutory terms which, at the most, would cover rates of the minimum wages, prescribed under the Minimum Wages Act.
8. Our attention is also invited to the letter dated 26.07.2012 written by the Central Vigilance Commission to the respondents making reference to the letter of WCL issued dated 18.05.2012, wherein it is insisted that the minimum wages was not the requirement as per the contract between the petitioners and the respondents and hence, the action was directed to be taken, including recovery in respect of wages in terms of NCWA was insisted. It is urged by Shri Bhangde that inspite of repeated demands and even the application under the Right to Information Act in respect of the communication dated 18.05.2012 referred to by the Central Vigilance Commission, copy is not supplied and, according to the petitioners, the respondent WCL has tried to justify therein its stand that the intention of the terms of the contract was to make the payment as per the Minimum Wages Act. He, therefore, submits that an adverse inference is required to be drawn for nonproduction of this communication.
9. Shri Chandurkar, learned counsel for the respondent WCL submits that it is only because of insistence on the part of the Central Vigilance Commission that the action impugned of, invoking two bank guarantees was taken and the amount has been realised.
10. The National Coal Wage Agreement is the settlement, which is arrived at between the respondent establishment of WCL and its workers, in terms of provisions of Section 2 (p) of the Industrial Disputes Act, 1947. It is a contract between the respondent WCL and its workers through the Union. The petitioner, who is Contractor, employed for carrying out the work in question, is neither party to the National Coal Wage Agreement nor do we find any such clause incorporated under the contract in question between the petitioner Contractor and the respondent WCL. The expressions “Minimum Wages” fixed by the “Law of the Land” and the “Law of the Land applicable to the workmen of colliery or washery where he is working under this contract,” can, by no stretch of imagination, be construed as inclusive of any terms of the contract entered into between the respondent and its own workers. The terms of NCWA cannot be called as the statutory terms of the contract so as to bind the petitioner Contractor in respect of the payment as per the rates of wages agreed under the NCWA.
11. In view of this, in our view, the invocation of bank guarantees by the respondent WCL was not in accordance with the terms of the Contract and the same cannot be, therefore, sustained.
12. We are informed that the petitioners were required to furnish bank guarantee, which shall remain valid for the period from 16.10.2008 to 15.06.2012 and thereafter up to expiry of 90 days, which would be valid up to 15.09.2012. Though the petitioners might have submitted the bank guarantee extending its validity beyond a period of 15.09.2012, in our view, the respondent – WCL was not competent to invoke such bank guarantee after 1
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5.09.2012. The said bank guarantee was invoked on 26.02.2013. Hence, it was without any authority as the period prescribed under the contract for furnishing bank guarantee up to 15.09.2012 expired. 13. In view of the above, this writ petition is allowed. The communication dated 26.02.2013 invoking two bank guarantees total amounting to Rs.2,14,59,500/- is hereby quashed and set aside. The respondents are directed to refund the entire amount of bank guarantees to the petitioners within a period of four weeks from today. The amount of bank guarantees is lying with the respondent WCL from 2013 till this date. Hence, it shall carry interest at the rate of 4% per annum as is paid on Savings Bank Account, till its realisation. 14. Rule is made absolute in above terms. No order as to costs.