State can’t deny extra payment to contractor citing terms of contract when it increases minimum wages: Karnataka High Court
The Karnataka High Court ruled that the State must pay a contractor the additional amount incurred due to increased minimum wages, despite the contract being based on earlier rates. The court emphasized that statutory obligations cannot be overridden by contractual terms and that the State must act as a model employer. This decision reinforces the constitutional obligation to pay minimum wages and rejects the State's argument that the contractor was bound by the original contract terms.
- ▪The Karnataka High Court ordered the State to pay ₹3.5 crore with 12% interest to a contractor due to increased wage costs.
- ▪The court stated that contracts cannot override statutory obligations regarding minimum wages.
- ▪Justice Magadum highlighted that any payment below minimum wages would violate constitutional rights against forced labor.
Opening excerpt (first ~120 words) tap to expand
The High Court of Karnataka held that the State cannot deny payment of the differential amount to a contractor who incurred higher wage costs due to revised minimum wages during a subsisting contract, merely because the contract was based on earlier rates, and directed the Karnataka Legislative Assembly (KLA) secretariat to pay ₹3.5 crore with 12% interest to a manpower-supplying firm.“A contract entered into by the State cannot override statutory obligation. Any clause in the contract which has the effect of defending a statutory mandate is unenforceable in law.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Hindu — Top.
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