LexHOCHTIEF GAMMON versus STATE OF ORISSA & ORS.
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A B c -l D E F • G 667 HOCHTIEF GAMMON v. STATE OF ORISSA & ORS. September 4, 1975 [A. ALAG!RISWAMI, P. K. GOSWAMI AND N. L. UNTWAL!A, JJ.] Industrial Dtsputes Act~Sec. 10 - Discretion of Govt. to refuse to nlake a reference-Necessary and proper parties to a referenae-Powers of the Court to scrutinise executive drder~lf tl1e executive refusd.s to consider re[e .. vant 111auers or takes 11nto considen:•tion irrelevant or extraneous matters- Whether Court's scrutiny can be avoided by failing to give reasons. In 1957, the Hindustan Steel Limited (Company) and the appellant (contrac- tor) entered into a contract for execution of the· foundation and civil engineer- ing work of the hot and cold rolling mills at Rourkela, The Company was to pay to the Contractor all costs of construction and in addition pay fixed overhead charges for the head office and general office of the contractor plus .a fixed fee. All payments in respect Qf wages and salaries and connected pay- ments made to persons engaged upon the work as might 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. Emolu- ments of Site Supervisory staff as well as all other payments connected there- with were also to be paid by the Company. The payments made to statutory schemes, in connection with sickness, or accident, or Provident Fund, or Pension or other like schemes to the above categories, payments of overtime and addi- tional renumeration for" Sunday, holiday or night work etc., and payments for leave and travelling cost were all. to be made by the Company. In 1960, the Labour Union of workmen employed by the Contractor raised a dispute for adjudication about the bonus payable to the workmen f'or doing the aforesaid job. The stand of' the contractor was that they would pay the bonus if it were' given by the Company. The Government referred the question Whether the workers of the contractor were entitled to any bonus and if so what should be the quantum. The qU'estion whether the Company or the Con- tractor was liable to pay the bonus was not refefred. A notice was served on the Company and the Company contended that since the contractor did not com- plete the work according to the agreement, no bonus was due to the contractor and that the Company was not a necessary party to the reference. The con- tractor in the written statement contended that under the terms of the Contract the Company had to bear all costs with reference to labour, all payments in respect of wages, salaries and other connected payments made to persons engag- ed in the works and that the contractors were, paid a stated fee for professional services rendered by them and that. therefore, the demand against the contrac- tor was not sustainable in law. The contractor made an application to the Tri- bunal that for the proper adjudication of the issues referred to the Tribunal it WaSJ necessary to bring on record the Company as a party to the proceedings. The said application was rejected by the Tribunal. The contractor thereupon filed a Writ Petition in the High Court of Orissa against the said order of the Tribunal. The, High O:>urt dismissed the said writ Petition. The contractor filed an appeal by Special Leave to this Court. :. This Court in that appeal held : H ''That it would have been open to the· State Government to ask the Tribunal to consider as to who was the en1ployer of the workn1en and in that case the· terms of reference might have been suitably framed. In the present case such a course has not been adc>pted. Tbe dispute· bet·, ween the Company and the contractor would be a substantial dispute and cannot be regarded as incidental to the industrial dispute which was referr- ed. The Company was therefore, a necessary party.'' 668 SUPREME COURT REPORTS [1976] I s.c.R. A The Contractor, thereafter, filed an application before the State Governn1ent asking them to modify tlle earlier reference by adding whether the bonus \va:i; payable· by the Company or the contractor and. by adding the Company a::; a party to the reference. It "\\'as pointed out in that application that it was the Company which would be liable to pay the bonus if at all it was payable. The contractor also asked for a personal hearing. The Government dispoS\!d of that application by observing "Government do not find any materials on the basis of the pe
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