9911796707
|
Home
Issues:
1. Validity of the order of reference to arbitration by the Court below. 2. Interpretation of Clause (25) of the Conditions of Contract. 3. Compliance with Contract Labour (Regulation and Abolition) Act, 1970. 4. Consent of parties for arbitration. Analysis: 1. The case involves a dispute between a Government contractor and the Union of India regarding the recovery of a sum from the bill amount payable to the contractor on account of wages for laborers. The contractor sought arbitration under the agreement entered into with the Union of India, which was challenged by additional defendants, workmen employed by the contractor. The Court below referred the matter to arbitration, leading to the appeal by the additional defendants. 2. The Court noted that the reference to arbitration was not well advised as it did not consider crucial aspects before making the decision. The Court should have examined if the dispute fell within Clause (25) of the Conditions of Contract, which provides for arbitration. The dispute between the contractor and the workmen, represented by the additional defendants, was not a matter of interest for the Union of India, and the withholding of amount was due to statutory obligations. 3. The Court highlighted the Contract Labour (Regulation and Abolition) Act, 1970, specifically Section 21, which imposes responsibilities on contractors and principal employers regarding payment of wages to contract labor. The Act mandates the principal employer to ensure payment of wages in case of default by the contractor. As the Act provides for recovery of unpaid wages, it is considered as 'otherwise provided' and excluded from the purview of the arbitration clause in the agreement. 4. Furthermore, the Court emphasized the fundamental principle that arbitration requires the consent of parties and cannot be compulsory. In this case, the additional defendants were not part of the arbitration agreement, and their inclusion in the arbitration process without consent violates the essence of arbitration. Compulsory arbitration is not permissible, and parties must agree to submit to arbitration voluntarily, which was lacking in this scenario. In conclusion, the Court found the reference to arbitration by the Court below to be erroneous due to the failure to consider the nature of the dispute, statutory obligations, and the absence of consent from all relevant parties. The judgment highlighted the importance of upholding the principles of arbitration, consent, and adherence to statutory provisions in resolving disputes effectively.
|
