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TMI Blog2000 (7) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead of 18% per annum. The impugned judgment of the High Court is modified accordingly. - C.A. 4092 OF 2000 - - - Dated:- 19-7-2000 - RAJENDRA BABU, S. AND SABHARWAL,Y.K., JJ. JUDGMENT: Y.K.SABHARWAL J. Leave granted. An agreement dated 16th September, 1981 was executed between the first respondent (for short `the contractor') and the Kerala State Electricity Board (for short `the Board') for construction of a dam. This was pursuant to a tender notice issued by the Board inviting tenders; tenders submitted by the contractor; correspondence exchanged between the parties and the negotiations held. A supplementary agreement was also executed; extensions for completion of work were granted and there were deviations of works as well which aspects are, however, not necessary to be narrated for the purpose of the disposal of these matters. The Government of Kerala issued a notification dated 30th March, 1983, under the Minimum Wages Act, 1948 revising the minimum wages payable to the employees employed in the works stated in the notification w.e.f. 1st April, 1983. The contractor claims that he started paying revised minimum wages to the employees and applying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard had stopped making payment of the labour escalation to the contractor. The increased payment said to have been made by the contractor to the employees was to be treated as advances to be adjusted later depending upon the decision of the dispute. By an award on 14th October, 1993 the Industrial Tribunal held that the revised minimum wages notification was applicable to the works in question and that the workmen concerned in the dispute are entitled for wage rates and other benefits fixed in the minimum wage notification issued by the State Government on 30th March, 1983 in the case of employees coming under Clauses 7 and 8 of Part I of the Schedule of Minimum Wages Act till a separate minimum wage notification is issued in relation to Item 31 of the First Schedule. The Tribunal further held that the additional wages received by the workmen shall be treated as part of the wages. It is not in dispute that the award has become final. There is no dispute that the workmen are entitled to enhanced wages in terms of the notification dated 30th March, 1983. The Board does not dispute its liability to reimburse the contractor if in fact the payment of enhanced wages has been made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned judgment. The High Court has held the termination of the contract to be arbitrary, unjust and not in public interest and has directed the Board to pay to the contractor the labour escalation amounts. It has been further directed that the Board shall pay to the contractor interest @ 18% on the amounts shown in the statement Exhibit P20. Mr. Rawal, learned Additional Solicitor General has put forth two contentions. The first contention is about the maintainability of the writ petition ( O.P. 283 of 1995 ) wherein directions as aforesaid for payment were issued by the High Court. Learned counsel submits that the writ petition is not the proper and appropriate remedy. The second contention is that the contractor, in absence of proof of actual payments of enhanced wages to the workmen, is not entitled to get reimbursement of any amount from the Board. Learned counsel submits that in case the contractor proves payment to the workmen as per the notification dated 30th March, 1983, the Board will have no difficulty for reimbursement. Elaborating the first submission, learned counsel for the appellant submits that the dispute relating to interpretation of a clause in a contract and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad already taken place in completion of the work and bearing in mind the fact that work of the dam was one of national importance and admittedly the labour escalation formula had been accepted, directed the payment of the amount worked out as per the formula to the contractor and further issued directions fixing time frame for the completion of the work. The formula regarding labour escalation payment was incorporated in the correspondence exchanged between the parties prior to entering into formal contract on 16th September, 1981. The facts broadly taken into consideration by the High Court were that the contractor initially in his letter dated 18th March, 1981 submitted along with the tender had suggested the additional financial liability to be borne as a consequence of increase in wages or other benefits to labour to be reimbursed with reference to actuals. During the negotiations, the Board expressed its unwillingness to accept such proposals of reimbursement of increased wages paid, after quantification of the actual disbursement of such increased wages and was willing to provide for revision in the rate structure on the basis of an agreed formula to take into account the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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