TMI Blog1975 (9) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... other civil engineering work of the Hot and with the water supply to the Rolling Mills. The contract was a cost contract with a target sum plus fixed overheads and fee, that is, the company was to pay to the contractor all costs of construction and in addition pay fixed overhead or the head office general expenses of the contractor plus a fixed fee. The target sum for the work was ₹ 66,294,000. The overheads were D.M. 2,800,000/- plus ₹ 2,120,000/- and the fee of ₹ 6,200,000/-. The work was to be carried out as detailed in the drawings, bills of quantities, specifications and other written orders issued or to be issued by the company. All payments in respect of wages and salaries and connected payments made two persons engaged upon the work as may be approved by the company, comprising wages of all operatives as well as all other payments connected with wages were to be paid by the company. Any increase beyond the initial rates specified in Enclosure III to the contract was to be subject to the approval of the company and such approval was to be taken in respect of categories and not individuals. Emoluments of site supervisory staff as well as all other payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, overtime, additional remuneration for Sunday, holiday or right work etc. It has even mentioned the rate of wages and is thus fairly comprehensive. There is, of course, no mention about bonus. Now if the contractor has to pay a higher rate of wages than that found in Enclosure III because of the conditions in the labour market naturally the contractor cannot be expected to pay it from out of his funds or the payments he was to receive in pursuance of the contract. This being a contract in which the company is to pay for labour as well as for materials any increase in the cost of those items cannot be borne by the contractor, who was to be paid only a fixed sum towards its remuneration. As the question of bonus is not mentioned in the contract the question arises as to who is to pay the bonus in case bonus is found payable to the workmen. We express no opinion on that point. But it appears to us that the company is adopting an ostrich like policy in trying to avoid being made a party to the reference before the Industrial Tribunal. if it should ultimately be held that bonus is payable and the company is liable to pay it, it should do its best even from this stage to fight the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the question of the party liable to pay the bonus. Naturally the Government also did not. The Government therefore referred the following issue for adjudication: Whether the workers of M/s. Hochtief Gammon. Civil Engineers and Contractors, Rourkela are entitled to any bonus and if so, what should be the quantum? On this a notice seems to have been served on the company and curiously enough the company said that the appellant did not complete the work as set out in the Memorandum of Agreement and hence no bonus was due to the contractors and that therefore they were not a necessary party. This bonus, as the terms of the contract set out earlier would show. has nothing to do with the bonus payable to the workmen. The appellant in their written statement pointed out that under the terms of the contract the company had to bear all expenditure with reference to labour, all payments in respect of wages, salaries and other connected payments made to persons engaged in the works, that it was also responsible to make payments to statutory schemes in respect of all workmen and that they themselves were only paid a stated fee for professional services rendered to them and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case that the workmen were employed by the appellant. It would have been open to the State Government to ask the Tribunal to consider who was the employer of these workmen and in that case, the terms of reference might have been suitably framed. Where the appropriate Government desires that the question as to who the employer is should be determined, it generally makes a reference in wide enough terms and includes as parties to the reference different persons who are alleged to be the employers. Such a course has not been adopted in the present proceedings, and so, it would not possible to hold that the question as to who is the employer as between the appellant and M/s. Hindustan Steel Ltd. is a question incidental to the industrial dispute which has been referred under s. 10(1)(d). This dispute is a substantial dispute between the appellant and M/s Hindustan Steel Ltd. and cannot be regarded as incidental in any sense, and so, we think that even this ground is not sufficient to justify the contention that M/s. Hindustan Steel Ltd. is a necessary party which can be added and summoned under the implied powers of the Tribunal under s. 18(3)(b). lt would be noticed that before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded as a party. They had in their petition included the paragraph which we have extracted above from this Court's judgment. It is apparent from their reply that the Government had not applied their mind to the facts placed before them. There was at least an arguable case on the point as to who was liable to pay the bonus and in that case the company would have been a necessary and appropriate party. Even if the Government thought that the company was not a necessary party the question as to who was liable to pay the bonus was a very relevant question and that made the company a necessary or at least a proper party. The attitude of the appellant had throughout been that their contract was a cost contract, that the company had to pay labour and while they have employed the workmen the employer was really the company. That contention may or may not be upheld by the Tribunal. Ultimately if the Tribunal should hold that the appellant is the party responsible for payment of bonus the question as between the company on the one hand and appellant on the other may have to be decided by arbitration as provided in the contract between them or otherwise. It appears to us, therefore, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to consider the expediency of making a reference and if after considering all the relevant facts the appropriate Government comes to the conclusion that it would he inexpedient to make the reference, it would be competent to it to refuse to make such a reference.. If the appropriate Government refuses to make a reference for irrelevant considerations, or on extraneous grounds, or acts malafide, that, of course, would be another matter: in such a case a party would be entitled to move the High Court for a writ of mandamus. The above are not the only powers of the Courts in relation to the orders of the Government or an officer of the Government who has been conferred any power under any statute, which apparently confer on them absolute discretionary powers, in this country as well as in England. In England in earlier days the Courts usually refused to interfere where the Government or the concerned officer passed what was called a non-speaking order, that is, an order which on the face of it did not specify the reasons for the order. Where a speaking order was passed the Courts proceeded to consider whether the reasons given for the order or decision were relevant reasons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court. It was further held that though there might be reasons which would justify the Minister in refusing to refer a complaint, his discretion was not unlimited and, if it appeared that the effect of his refusal to appoint a committee of investigation was to frustrate the policy of the Act, the court was entitled to interfere. The extracts given below of certain portions of the speeches of the learned Lords can be appreciated in that background. Lord Reid: The respondent contends that his only duty is to consider a complaint fairly and that he is given an unfettered discretion with regard to every complaint either to refer it or not to refer it to the committee as he may think fit. The appellant contents that it is his duty to refer every genuine and substantial complaint, or alternatively that his discretion is not unfettered and that in this case he failed to exercise his discretion according to law because his refusal was caused or influenced by his having misdirected himself in law or by his having taken into account extraneous or irrelevant considerations. In my view, the appellants' first contention goes too far. There are a number of reasons which would justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the appellants. Lord Pearce: I do not regard a Minister's failure- or refusal to give any reasons as a sufficient exclusion of the court's survellance. It was for the Minister to use his discretion to promote Parliament's intention. If the court had doubt as to whether the appellants' complaint was frivolous or repetitive, or not genuine, or not substantial, or unsuitable for investigation or more apt for arbitration, it would not interfere. But nothing which has been said in this case leads one to doubt that it is a complaint of some substance which shoukl A properly be investigated by the independent committee with a view to pronouncing on the weight of the complaint and the public interest involved. The fact that the complaint raises wide issues and affects other regions was not a good ground for denying it an investigation by the committee. lt is a matter which makes it very suitable for the committee of investigation, with its duty to report on the public interest, and its capacity to hear representatives of all the regions. Lord Upjohn: The Minister in exercising his powers and duties, conferred upon him by statute? can only be controll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent basis; he is a public officer charged by Parliament with the discharge of a public discretion affecting Her Majesty's subjects; if he does not give any reason for his decision it may be, if circumstances warrant it, that a court may be at liberty to come to the conclusion that he had no good reason for reaching that conclusion and order a prerogative writ to issue accordingly. That was a case where the Minister had given elaborate reasons and it was, therefore, possible for their Lordships of the House of Lords to consider the reasons given by the Minister in elaborate detail and show how he had misdirected himself. They also pointed out that by merely keeping silent the Minister cannot avoid the Court considering the whole question. The principles deducible from the decisions of this Court and the above decision of the House of Lords which, though not binding on us, appeals to us on principle may be set out as follows: The Executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should They take into account wholly irrelevant or extraneous consideration. They should not misd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant it could hardly be brought within that formula. As the company had certainly not begun production at that stage it would be difficult to calculate the bonus with reference to the business of the company either. The mistake that the Labour Commissioner committed was in not realising that the dispute concerned not Cr merely two parties but three because from the beginning the appellant had made it clear that they would pay the bonus if the necessary amount was paid to them by the company. We have set out the facts of this case at considerable length and considered the whole question. We think that the Government's order in this case really amounts to an outright refusal to consider relevant matters and the Government also misdirected itself in point of law in wholly omitting to take into account the relevant considerations which as held by the House of Lords is unlawful behavior. It has failed to realise that in effect the contractor employed labour for the company wh() was the real paymaster. lt held failed to take into account the fact that the workmen wanted the bonus from either the company or the appellant. Naturally the workmen were not interested who paid ..... 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