JUDGMENT A.Y. KOGJE, J. 1. This Appeal is preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to in short as ‘the Act’) against the judgment and order dated 20.11.2013 in Civil Miscellaneous Application No.12/2009 by the learned 4th Additional District Judge, Gandhinagar wherein the District Court has confirmed the arbitral award dated 29.09.2007 passed by the sole arbitrator. 2. The facts in brief are that the appellant – Oil and Natural Gas Corporation (hereinafter referred to in short as ‘ONGC’) had entered into a contract after carrying out the due tender bidding process with the respondent for providing security personnel for safeguarding various installations/assets of the appellant. The contract which was initially for a period of six months was extended from time to time and at least for 75 times till expiry of the last contract on 14.02.2002. (a) A fresh contract for the same purpose was awarded to the respondent on 03.04.2002 for a period of two years. The second contract was a rate contract. The agreement entered into between the parties contained the arbitration clause and hence by a communication dated 10.04.2004, disputes were sought to be referred to the Arbitrator. The disputes raised were pertaining to the bonus required to be paid to the employees who were working for ONGC through the respondent Contractor. The dispute also referred to the payment of service tax. 3. This Court in an order passed in an Arbitration Petition No.54/2005 appointed an Arbitrator for adjudication of claims specified as : (i) Security Deposit (ii) Bonus Amounts (iii) Service Tax 4. The arbitration proceedings were proceeded on 15 points for determination and the Arbitrator gave findings on each of the points for determination and ultimately gave the following award :- “154. Accordingly the Award is passed in the following terms :- (i) The respondent ONGC do pay to the claimant within three months from today a sum of Rs.1,23,86,258.06 (Rupees one crore, twenty-three lacs, eighty-six thousand, two hundred fifty-eight and paise six) within running interest as follows : - On Rs.84,91,787-06 P on account of Service Tax: at the rate of 13% (thirteen) per annum from the due dates of payments of Service Tax. The interest to be calculated from month to month from 16/10/1998 on the Service Tax amount due for each month, till realisation and payment by ONGC to the claimant or directly to the Service Tax Authority in the relevant account of the claimant. - On Rs.38,94,471-00 P on account of bonus at the rate of 12% (twelve) per annum from 10/04/2004 till payment and realisation. (ii) The counter claim (Rs.6,32,034/-) of the Respondent is rejected. (iii) The claim of Rs.10,28,065-15 P. being the amount of Service Tax difference of 3% is rejected. (iv) The respondent shall also pay costs to the claimant Rs.77,000/- on account of arbitration fees and arbitration expenses within three months from today.” 5. Aggrieved by the arbitral award, ONGC challenged the legality and validity before the District Court at Gandhinagar. The District Court also dismissed the application. 6. Learned Advocate for the appellant ONGC submitted that the Arbitrator as well as the District Court have not interpreted the agreement between the parties in the correct perspective inasmuch as the Contract entered was for a specific purpose of providing security personnel and under the contract, extension of appointment was to be made on agreed Terms. Other liabilities which now the Contractor wants to burden the ONGC with were not part of the agreement and so were, required to be borne by the respondent Contractor as the clause regarding payment in the agreement were specified regarding fixed rate contract. No other payment can be awarded. It is submitted that at the time of entering of the agreement, the price quoted by the contractor was inclusive of the statutory charges which are applicable to any work contract. Therefore, the burden of paying bonus to the employees under the respondent Contractor was that of the respondent Contractor. It is submitted that ONGC being the principal employer had a right to recover the bonus paid to the contract workers from the Contract as per Section 21(4) of the Contract Labour Regulation and Abolition Act, 1970. 7. It is submitted that insofar as the service tax is concerned, the liability is always of the service provider to pay service tax. It is submitted that the arbitrator could not have come to the conclusion in absence of any evidence on record regarding actual payment of service tax by the respondent Contractor and that too for the purpose of this very Contract. 8. It is submitted that the arbitrator could not have come to the conclusion in absence of any evidence on record regarding actual payment of service tax by the respondent Contractor and that too for the purpose of this very Contract. 8. As against this, learned Advocate Mr. Jeet P. Bhatt on behalf of the respondent Contractor submitted that the respondent Contractor was providing security service since April 1993 and had entered into the agreement with ONGC initially on 27.04.1993 and at that time, service tax was not applicable but the same was introduced with effect from 16.10.1998. The rates of service tax had varied from time to time and in the year 1993, the rates quoted by the respondent Contractor did not contained the service tax element. It is submitted that as per the agreement, the service tax will have to be borne by ONGC being the principal employer and will be paid by the Contractor. It is submitted that while passing the arbitral award, the learned Arbitrator has taken into consideration all the contentions raised by both the sides and has dealt with the same by assigning detailed reasons and therefore, no interference is required. He drew attention of this Court firstly to the agreement between the two parties at different times and submitted that the claim submitted by the respondent was in consonance with the clauses of such an agreement. It is submitted that the service tax is a statutory due of the Government which will always be the responsibility of the ONGC. In the second agreement, the same is clearly mentioned. He therefore submitted that no interference is necessary. He submitted that ONGC has resorted to an erroneous interpretation while admitting the responsibility for the service tax. For reasons unknown, the ONGC has considered the 5% of the service tax to be applied on the service charge component and not 5% of the gross amount. The service tax imposed by the Government is always on the gross amount and the same is already paid by the respondent to the Service Tax Department. It is submitted that even initially ONGC had paid the service tax @ 5% on the gross amount but thereafter by giving a falicious interpretation considered the payment of service tax only on the service charge component and thereby deducted the difference from the future bills of the respondent. It is submitted that even initially ONGC had paid the service tax @ 5% on the gross amount but thereafter by giving a falicious interpretation considered the payment of service tax only on the service charge component and thereby deducted the difference from the future bills of the respondent. This unilateral act of the ONGC had damaged the working of the respondent as on one hand, the service tax was already paid by the respondent while on the other hand, by deducting the difference amount though ONGC had stopped paying the respondent. It is also submitted that when the contract was initially entered into, service tax was not applicable and therefore, the price quoted by the respondent did not contain the service tax component. With the imposing of 5% of service tax, it cannot be expected that on the previous rates, the respondent is to shoulder the service tax liability as that much is not even the percentage profit earned by the respondent. 9. We have heard the learned Advocates for the rival parties and have considered the evidence on record. 10. ONGC appears to have awarded the Contract for deployment of security personnel for safeguarding various installations/assets of ONGC under a Contract dated 27.04.1993. This contract was for a period of six months with a provision for extension for a further period and accordingly, the Contract was extended for 75 times till 14.02.2002. After expiry of the Contract, it appears that the bidding process took place and in that also, the respondent became a successful bidder and a second Contract dated 03.04.2002 was awarded to the respondent which was valid up to 14.02.2004. Both the contracts were Rate Contracts. 11. Before expiry of this period under the second Contract, a litigation was filed by the employees under the respondent Contractor in the High Court for payment of bonus. ONGC was directed by the High Court for making payment of bonus being the principal employer. 12. After the end of the Contract, the Contractor raised various disputes as mentioned in the preceding paragraphs and the statement of claim was filed claiming an amount of Rs.51,00,000/= towards security deposit, Rs.95,19,852/= towards service tax and Rs.38,94,471/= towards bonus alongwith interest applicable. ONGC was directed by the High Court for making payment of bonus being the principal employer. 12. After the end of the Contract, the Contractor raised various disputes as mentioned in the preceding paragraphs and the statement of claim was filed claiming an amount of Rs.51,00,000/= towards security deposit, Rs.95,19,852/= towards service tax and Rs.38,94,471/= towards bonus alongwith interest applicable. ONGC responded to such claim by submitting its reply to the statement of claim and also filed a counter claim on the basis of various clauses of the agreement on the ground that the statutory liability was the burden of the Contractor which was accepted unconditionally by the Contractor and therefore, the ONGC submitted a counter claim of Rs.6,32,034/- under the head of bonus for the year 1996 – 1997 to 1998 – 1999. 13. A perusal of the arbitral award where reference was made on three broad points raised – issue of security deposit and bank guarantees did not survive, leaving two issues regarding payment of bonus and liability of service tax. Insofar as service tax is concerned, from the record it appears that the Commissioner of Excise and Customs being the service tax adjudicating authority has passed an order dated 03.11.2006 for recovery of service tax with interest and penalties. The total contract period was thus, divided into : from 16.10.1998 to 14.02.2002 and from 15.02.2002 to 13.05.2003 and from 14.05.2003 to 14.02.2004 which was under the second contract. This was the period during which the service tax was payable. The arbitrator has taken into consideration the challans of service tax paid by the respondent for the months of November and December 2002 and has recorded that service tax was paid @ 5% of the gross amount. The arbitrator has referred to decisions of the various High Courts in connection with the service tax on security agencies and has concluded that service tax to be paid in case of security services is always on the gross amount and it cannot be on the service charge component only. The interpretation therefore, given by the ONGC for considering the service tax to be paid to the contractor respondent to extent of 5% of the service charge is erroneous. 14. The interpretation therefore, given by the ONGC for considering the service tax to be paid to the contractor respondent to extent of 5% of the service charge is erroneous. 14. The learned Arbitrator by an award dated 29.09.2017 has allowed the claim in favour of the respondent in connection with the service tax claim and bonus claim and thereby, directed ONGC to pay an amount of Rs.1,23,86,258.06 with interest @ 13% on service tax and 12% on bonus and cost of Rs.77,000/=. The principal grounds for challenge raised before us are that Clause 42(a) of the Contract of 2002 specifically provides the rates quoted by the Contractor to remain firm throughout the current year of the contract and any statutory or otherwise increase in various communications applicable to the establishment of the contractor and the labourers engaged by him under the Contract was to be borne by the Contractor. It was provided that ONGC was not to be held liable for increase in the statutory payments. In this connection, it may be noticed that at the time of first contract in the year 1993, which was for the period of six months only and extended 75 times by short periodic extensions, the security services were not covered under the service tax and hence, no service tax was payable. The security services were covered under the service tax with effect from 16.10.1999 and the rate of tax was 5% of the gross amount received by the service provider for the service so rendered. The contract was extended from time to time on the same terms and conditions and obviously did not make any provision regarding service tax whereas in the second contract, specific provisions were made. The Arbitrator rightly referred to the relevant clauses being 4(i)(ii) and (xiii), 11, 12, 27 and 42a of the second Contract and after comparing both the clauses of the contracts applicable has concluded the true intention of the parties of entering into a contract being given to effect to by a meaningful and harmonious interpretation without causing any unjust enrichment or unjust detriment to any party. Thereafter, referring to the judgment of the Apex Court in the case of Alopi Prasad and Sons v. Union of India reported in AIR 1960 SC 588 , the Tribunal applied its principle to understand the clause of the Agreement by referring to the time and circumstances under which it was made. In the instant case, where it is found that at the time of entering into the contract for the first time, in 1993, provision of service tax was not applicable to this service and was subsequently introduced into this service. Being under the statutory heads, the respondent Contractor was obliged to comply with the same even if the contract did not provide for it. The situations cannot be envisaged where the contractor is compelled to comply with the subsequent introduction of service tax but no corresponding liability on the part of ONGC. The Court also observed that when 5% service tax is applied to the service, that otherwise was not even the profit margin of the contractor and therefore, continuing the contract under the conditions without referring to the subsequent addition of the service tax element would be expecting the contractor to perform his contract in breach of statutory provision. The Arbitrator has therefore, correctly construed that the service tax element for the period of the contract during which such service tax was applicable to the service of security services payable by the respondent is to be reimbursed by ONGC. Such conclusion is fortified by unambiguous clause in this regard in the second contract which was entered into the first time after the application of service tax to these services. 15. The submission on behalf of ONGC with regard to the discrepancy of service tax by applying on the gross amount or upon the service charge was based on clause 4(23) of the second contract. On facts, as is noted above, ONGC after one year of the second contract unilaterally interpreted that the service tax was applicable only on the service charge and not on the gross amount. Based on such opinion, ONGC proceeded to withhold the payments to the extent of the service tax paid already to the respondent from his subsequent bills. On facts, as is noted above, ONGC after one year of the second contract unilaterally interpreted that the service tax was applicable only on the service charge and not on the gross amount. Based on such opinion, ONGC proceeded to withhold the payments to the extent of the service tax paid already to the respondent from his subsequent bills. Thus, it appears to have been a cascading effect, as on the one hand ONGC stopped paying the contractor the full amount of the bill and on the other hand, the contractor was expected to pay the service tax on the gross amount alongwith other statutory payments life wages, provident fund, bonus etc. to the workers. In any case as is recorded by the arbitrator based on several decisions of the tax authorities and in fact by the adjudicating authority of the service tax, in the case respondent Contractor has held that the service tax is to be paid on the gross amount, and hence, the interpretation of the ONGC cannot be sustained. 16. An argument on behalf of ONGC that in connection with the bonus, the primary liability of payment of bonus is of the contractor. ONGC being the principal employer may pay the bonus but has the right to recover under Section 21(4) of the Contract Labour and Abolition Act. The Arbitrator has observed that the amount of bonus for the period from 1999 to 2002 were paid by ONGC directly to the workman. This period was in the first contract. The bonus thus paid for the period under the first Contract was recovered from the Contractor for the payment to be received under the second Contract. The bonus for the period of three years, i.e. from 1996 to 1999 which was paid by ONGC but not deducted was the subject of counter claim on part of the ONGC. The provisions relating to payment of bonus were more clear and categorical in the second contract and hence, no dispute arises in this connection. The arbitrator is therefore referred to the litigation between the employees under the Contractor and ONGC and the orders passed by this Court from time to time. The provisions relating to payment of bonus were more clear and categorical in the second contract and hence, no dispute arises in this connection. The arbitrator is therefore referred to the litigation between the employees under the Contractor and ONGC and the orders passed by this Court from time to time. The contract had started from the year 1993 and for the period from 1993 to 1998, apparently no bonus was paid by the contractor nor was it paid by ONGC which led the Arbitrator to conclude that both the Contractor and ONGC were believed that the bonus was not payable and was therefore not provided in the lump sum amount paid. A reference is made to the internal communication which are on record where ONGC has communicated to the Contractor to comply with payment of bonus which was the statutory requirement and the communication in response by the Contractor to pay the bonus only if ONGC reimburses. With this rival stand taken, ONGC proceeded to pay the bonus directly to the workers, and hence, it can be inferred that the lump sum amount negotiated at the time of the Contract did not contain the component of bonus. The finding thus recorded in this regard by the arbitrator needs no interference. 17. It appears that under the order dated 11.06.2014 in the Civil Application for stay, this Court has directed the deposit of amount awarded by the Arbitrator to take care of the submissions made on behalf of the ONGC and which in the opinion of the Court deserves due consideration that the service tax has not been actually paid by the respondent Contractor to the Government of India and therefore, the amount may not be disbursed or paid to the respondent Contractor. This contention of ONGC per se cannot be accepted. The Contractor could not pay service tax because the ONGC stopped paying it to the Contractor. However, whatever service tax component the contractor may now receive as per the award of the arbitrator, must be directly deposited with the service tax department in the name of the contractor and the contractor may be left to such refund if there is any excess. 18. Accordingly, it is directed that the service tax payable by ONGC to Contractor alongwith interest may be deposited by the Registry before the Service Tax/VAT Department of the State in the name of the Contractor. 18. Accordingly, it is directed that the service tax payable by ONGC to Contractor alongwith interest may be deposited by the Registry before the Service Tax/VAT Department of the State in the name of the Contractor. If there is any excess after adjusting the contractor’s dues of service tax, it will be up to the Contractor to claim refund by filing appropriate application for such purpose. In view of the above, this Court is of the opinion that no interference is required in the judgment and order of the District Court and the Arbitral Award of the Arbitrator. The Appeal stands dismissed. Record and proceedings be sent to the concerned Court. In view of the order passed in the First Appeal, Civil Application No.7326/2017 stands disposed of.